Shane Mage wrote: > Marx makes it quite clear that the wages of "socially necessary but unproductive" labor are paid out of [the circulating portion of] constant capital. While to the individual capitalist they appear to be a deduction from surplus value, to the capitalist system as a whole they are part of the overall cost structure. ... Thus, because these wages consist of part of the gross product, the higher their share of the total wage bill the lower the share of the gross product available to the ownership class for consumption and investment, and accordingly the *lower* the rate of exploitation.<
Does it really matter? there are three ways of treating the wages of unproductive labor-power (U) among Marxist political economists: (1) as Shane says, U is part of circulating part of constant capital; (2) U is part of variable capital (V); and U is part of surplus-value (S). Let the rate of profit r = S/(C + V) = (S/V)/[(C/V) + 1], ignoring the role of fixed capital and differences in turnover time. Let the rate of surplus-value, s = S/V. for (1), C becomes U + C1, where C1 is the physical input component of constant capital. So the rate of profit becomes S/(U + C1 + V) = (S/V)/[(U/V) + (C1/V) + 1]. A rise in U/V raises C/V and the denominator of r and thus hurts it, holding (C1/V) and the numerator constant. A rise of (U/V) also hurts the numerator, s = (Y - C1 - U - V)/V = (Y/V) - (C1/V) - (U/V) - 1, where Y is total (gross) value. This assertion works only if (C1/V) and (Y/V) are constant. In this view, the fall in the rates of profit and surplus-value can be counteracted by a rise in Y/V (what might be called the "value productivity of productive labor") or a fall in C1/V. for (2), V is replaced by V1 + U, where V1 is the wages of productive labor. The profit rate becomes S/(C + V1 + U) = (S/V1)/[(C/V1) + 1 + (U/V1)]. A rise in U/V1 has exactly the same depressing effect on the rate of profit as in #1, again holding the numerator and (C/V1) constant. Again holding (C/V1) and (Y/V1) constant, the rise in (U/V1) also hurts the numerator, the rate of surplus value = (Y - C - U - V1)/V1 = (Y/V1) - (C/V1) - (U/V1) - 1. Just as for #1, the fall in the rates of profit and surplus-value can be counteracted by a rise in (Y/V1) or a fall in (C/V1). It seems that even though the concepts are different, #1 and #2 are mathematically equivalent. Both treat U as part of costs. I guess you could get different results if you replaced (Y/V1) with (Y/[V1 + U]), (C/V1) with (C/[V1 + U]), and (U/V1) with (U/[V1 +U]). But these new ratios don't make as much sense to me. The whole idea of "productive labor" says that we should care about the relative role of C and productive labor and the value productivity of productive labor. (3) This is the version that Fred Moseley uses. In this case, S = S1 + U, where S1 is the surplus-value produced by productive labor. The rate of profit has to be restated as r = (S1 + U)/(C + V) = [(S1/V) + (U/V)]/[(C/V) + 1]. In this case, a rise in (U/V) does not affect the denominator -- or the numerator. So it has no effect at all on the rates of profit or surplus-value. However, Moseley admits that what's important is the "conventional" rate of profit, which treats U as a cost, not a benefit, to the capitalist class. That gets us back to either #1 or #2. Where, then, does U matter? It might matter as part of the accumulation process (as Adam Smith hinted it might). If capitalist accumulation out of gross S goes to raise U rather than raising the wage-bill for productive workers (V1) or expenditure on material circulating capital (C1). If V1 doesn't rise very much, that limits the mass of profits (= s times V1). If C1 doesn't rise very much, that limits the rise of C1/V1 and thus the growth of the value-productivity of productive capital. Either of these can hurt the long-term process of accumulation, rather than simply being a matter of fiddling with formulas. This last paragraph doesn't quite make sense to me, so any input would help. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
