I. I. Rubin's

Essays on Marx's Theory of Value

Chapter Nineteen

To formulate the problem of productive labor accurately, we must first of all perform a preliminary task: we must determine the exact meaning of Marx's theory of productive labor. Unfortunately, no section of the broad critical literature on Marx is as full of disagreement and conceptual confusion as this question, among Marxists as well as between them and their opponents. One of the reasons for this confusion is an unclear idea of Marx's own views of productive labor.

To interpret Marx's views, it is necessary to start with the fourth chapter of Volume I of Theories of Surplus Value, which has the title, "Theories of Productive and Unproductive Labor." Marx gives a brief formulation of the ideas developed in this chapter in Volume I of Capital, in Chapter 16: "Capitalist production is not merely the production of commodities, it is essentially the production of surplus-value. The laborer produces, not for himself, but for capital. It no longer suffices, therefore, that he should simply produce. He must produce surplus-value. That laborer alone is productive, who produces surplus-value for the capitalist, and thus works for the self-expansion of capital. If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive laborer, when, in addition to belaboring the heads of his scholars, he works like a horse to enrich the school proprietor. That\ the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation. Hence the notion of a productive laborer implies not merely a relation between work and useful effect, between laborer and product of labor, but also a specific, social relation of production, a relation that has sprung up historically and stamps the laborer as the direct means of creating surplus-value" (C., I, p. 509). After saying this, Marx promises to consider this question in detail in "volume four" of Capital, namely in Theories of Surplus Value. Actually, at the end of the first volume of Theories of Surplus Value, we find a digression which, in essence, represents a detailed development of ideas which were already formulated in the first volume of Capital.

First of all, Marx notes that "Only bourgeois narrow-mindedness, which regards the capitalist forms of production as absolute forms-hence as eternal, natural forms of production-can confuse the question of what is productive labor from the standpoint of capital with the question of what labor is productive in general, or what is productive labor in general."[1] Marx throws out as useless the question of what kind of labor is productive in general, in all historical epochs, independently of the given social relations. Every system of production relations, every economic order, has its concept of productive labor. Marx confined his analysis to the question of which labor is productive from the standpoint of capital, or in the capitalist system of economy. He answers this question as follows: "Productive labor is therefore-in the system of capitalist production-labor which produces surplus-value for its employer, or which transforms the objective conditions of labor into capital and their owner into a capitalist; that is to say, labor which produces its own product as capital" (Ibid., p. 384). "Only labor which is directly transformed into capital is productive; that is, only labor which makes variable capital a variable magnitude" (Ibid., p. 381). In other words, productive labor is "labor which is directly exchanged with capital" (Ibid., p. 153), i.e., labor which the capitalist buys as his variable capital for the purpose of using that labor to create exchange values and to create surplus value. Unproductive labor is that labor "which is not exchanged with capital, but directly with revenue, that is, with wages or profit (including of course the various categories of those who share as co-partners in the capitalist's profit, such as interest and rent)" (Ibid., p. 153).

Two conclusions necessarily follow from Marx's definitions: 1) every labor which a capitalist buys with his variable capital in order to draw from it a surplus value, is productive labor, independently of whether or not this labor is objectified in material objects, and whether or not this labor is objectively necessary or useful for the process of social production (for example, the labor of a clown employed by a circus manager). 2) Every labor which the capitalist does not buy with his variable capital is not productive from the point of view of the capitalist economy, even though this labor might be objectively useful and might be objectified in material consumer goods which satisfy human subsistence needs. At first glance, these two conclusions are paradoxical and contradictory to the conventional understanding of productive labor. However, they follow logically from Marx's definition. And Marx applies it boldly. "An actor, for example, or even a clown, according to this definition, is a productive laborer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labor than he receives from him in the form of wages; while a jobbing tailor who comes to the capitalist's house and patches his trousers for him, producing a mere use-value for him, is an unproductive laborer. The former's labor is exchanged with capital, the latter's with revenue. The former's labor produces a surplus-value; in the latter's, revenue is consumed" (Ibid., p. 153). At first glance this example is strikingly paradoxical. The useless labor of the clown is considered productive labor, and the highly useful labor of the tailor is treated as unproductive. What is the meaning of these definitions given by Marx?

In the majority of textbooks on political economy, productive labor is treated from the standpoint of its objective necessity for social production in general, or for the production of material goods. In these treatments, the decisive factor is the content of the labor, namely its result, which is usually a material object to which the labor is directed and which is created by the labor. Marx's problem has nothing in common with this problem except the title. For Marx productive labor means: labor which is engaged in the given social system of production. Marx is interested in the question of what social production is, how the working activity of people who are engaged in the system of social production differs from the working activity of people who are not engaged in social production (for example, labor which is directed to the satisfaction of personal needs or to the service of a household). By what criterion is the working activity of people included in social production, what makes it "productive" labor?

Marx gave the following answer to this question. Every system of production is distinguished by the totality of production relations which are determined by the social form of organization of labor. In the capitalist society, labor is organized in the form of wage labor, i.e., the economy is organized in the form of capitalist enterprises, where wage laborers work under the command of a capitalist. They create commodities and yield a surplus value for the capitalist. Only the labor which is organized in the form of capitalist enterprises, which has the form of wage labor, hired by capital for the purpose of drawing out of it a surplus value, is included in the system of capitalist production. Such labor is "productive" labor. Every type of labor which is included in the given system of social production can be considered productive, i.e., every type of labor organized in the determined social form characteristic of the given system of production. In other words, labor is considered productive or unproductive not from the standpoint of its content, namely in terms of the character of the concrete working activity, but from the standpoint of the social form of its organization, of its consistency with the production relations which characterize the given economic order of the society. Marx frequently noted this characteristic. This sharply distinguishes his theory from conventional theories of productive labor which assign a decisive role to the content of working activity. "These definitions [of productive labor-I.R.] are therefore not derived from the material characteristics of labor (neither from the nature of its product nor from the particular character of the labor as concrete labor) but from the definite social form, the social relations of production, within which the labor is realized" (Ibid., p. 153). "It is a definition of labor which is derived not from its content or its result, but from its particular social form" (Ibid., p. 154). "The determinate material form of the labor, and therefore, of its product, in itself has nothing to do with this distinction between productive and unproductive labor" (Ibid.). "... the content, the concrete character, the particular utility of the labor, seems at first to make no difference" (Ibid., p. 392). "... this distinction between productive and unproductive labor has nothing to do either with the particular specialty of the labor or with the particular use-value in which this special labor is incorporated" (Ibid., p. 156).

From all this it follows that, from a material standpoint, one and the same labor is productive or unproductive (i.e., is included or not included in the capitaUst system of production) depending on whether or not it is organized in the form of a capitalistic enterprise. "For example, the workman employed by a piano maker is a productive laborer. His labor not only replaces the wages that he consumes, but in the product, the piano, the commodity which the piano maker sells, there is a surplus-value over and above the value of the wages. But assume on the contrary that I buy all the materials required for a piano (or for all it matters the laborer himself may possess them), and that instead of buying the piano in a shop I have it made for me in my house. The workman who makes the piano is now an unproductive laborer, because his labor is exchanged directly against my revenue" (Ibid., p. 156). In the first case, the worker who produces the piano is included in a capitalist enterprise and thus in a system of capitalist production. In the second case he is not. "For example Milton, who wrote Paradise Lost for five pounds, was an unproductive laborer. On the other hand, the writer who turns out stuff for his publisher in factory style, is a productive laborer. Milton produced Paradise Lost for the same reason that a silk worm produces silk. It was an activity of his nature. Later he sold the product for 5 pounds. But the literary proletarian of Leipzig, who fabricates books (for example, Compendia of Economics) under the direction of his publisher, is a productive laborer; for his product is from the outset subsumed under capital, and comes into being only for the purpose of increasing that capital. A singer who sells her song for her own account is an unproductive laborer. But the same singer commissioned by an entrepreneur to sing in order to make money for him is a productive laborer; for she produces capital" (Ibid., p. 389"). The capitalist form of organization of labor includes labor in the system of capitalist production and makes it "productive" labor. All working activities which do not take place in the form of an enterprise organized on capitalist principles are not included in the capitalist system of production and are not considered "productive" labor. This is the character of working activities directed to the satisfaction of personal needs (remnants of natural household economy). Even wage labor, if it is not employed to yield surplus value (for example, the labor of household servants) is not productive in the sense defined above. But the labor of household servants is not unproductive because it is "useless" or because it does not produce material goods. As Marx said, the labor of a cook produces "material use-values" (Ibid., p. 155), but it is nevertheless unproductive if the cook is hired as a personal servant. On the other hand, the labor of a lackey, even though it does not produce material goods and is usually recognized as "useless," may be productive labor if it is organized in the form of a capitalist enterprise. "... the cooks and waiters in a public hotel are productive laborers, in so far as their labor is transformed into capital for the proprietor of the hotel. The same persons are unproductive laborers as menial servants, inasmuch as I do not make capital out of their services, but spend revenue on them."In fact, however, these same persons are also for me, the consumer, unproductive laborers in the hotel" (Ibid., pp. 154-155). "Productive laborers may themselves in relation to me be unproductive laborers. For example, if I have my house re-papered and the paper-hangers are wage workers of a master who sells me the job, it is just the same for me as if I had bought a house already papered; as if I had expended money for a commodity for my consumption. But for the master who gets these laborers to hang the paper, they are productive laborers, for they produce surplus value for him" (Ibid., p. 393). Must we understand Marx to mean that he recognizes only a subjective and relative criterion, but not a social and objective criterion of productiveness of labor? We think not. Marx only states that the labor of an upholsterer, if it is part of the household of the consumer-customer, is not yet included in the system of capitalist production. It becomes productive only when it becomes included in the economy of a capitalist entrepreneur.

Consequently only that labor which is organized on capitalist principles and thus is included in the system of capitalist production is productive labor. Capitalist production must not be understood as the existing, concrete social-economic system, which is not composed exclusively of enterprises of a capitalist character; it also contains remnants of pre-capitalist forms of production (for example, peasant and craft production). The system of capitalist production encompasses only the economic units which are formed on capitalist principles. It is a scientific abstraction derived from concrete economic reality, and in this abstract form it represents the subject of political economy as the science of the capitalist economy. In the capitalist economy, as a theoretical abstraction, the labor of the peasant and the craftsman does not exist. The question of their productiveness is not treated: "they [craftsmen and peasants-I.R.] confront me as sellers of commodities, not as sellers of labor, and this relation therefore has nothing to do with the exchange of capital for labor; therefore also it has nothing to do with the distinction between productive and unproductive labor, which depends entirely on whether the labor is exchanged for money as money or for money as capital. They therefore belong neither to the category of productive or of unproductive laborers, although they are producers of commodities. But their production does not fall under the capitalist mode of production" (Ibid., pp. 394-395).

From the standpoint of Marx's definition of productive labor, the labor of the civil servant, of the police, of soldiers and priests, cannot be related to productive labor. Not because this labor is "useless" or because it is not materialized in "things," but only because it is organized on principles of public law, and not in the form of private capitalist enterprises. A postal employee is not a productive worker, but if the post were organized in the form of a private capitalist enterprise which charges money for the delivery of letters and parcels, wage laborers in these enterprises would be productive laborers. If the job of protecting freight and passengers on roads were not carried out by the state police but rather by private transportation bureaus which maintained armed protection by hired workers, the members of such bureaus would be productive laborers. Their labor would be included in the system of capitalist production, and these private bureaus would be subject to the laws of capitalist production (for example, to the law of equal rates of profit for all branches of production). This cannot be said of the post or the police, which are organized on principles of public law. The labor of postal or police civil servants is not included in the system of capitalist production; it is not productive labor.

As we can see, when Marx defined productive labor, he completely abstracted from its content, from the concrete, useful character and result of the labor. He treated labor only from the standpoint of its social form. Labor which is organized in a capitalist enterprise is productive labor. The concept "productive," as well as the other concepts of Marx's political economy, have a historical and social character. This is why it would be extremely incorrect to ascribe a "materialistic" character to Marx's theory of productive labor. From Marx's point of view, one cannot consider only labor which serves the satisfaction of material needs (and not so-called spiritual needs) as productive labor. On the very first page of Capital, Marx wrote: "The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference" (C., I, p. 35). The nature of the wants plays no role. In the same way, Marx did not attach any decisive significance to the difference between physical and intellectual labor. Marx spoke of this in a well-known passage in Chapter 14 of the first volume of Capital, and in numerous other places. With reference to the labor of the "overlooker, engineer, manager, clerk, etc.-in a word, the labor of the whole personnel required in a particular sphere of material production," he stated that, "In fact they add their aggregate labor to the constant capital, and increase the value of the product by this amount. (How far is this true of bankers, etc?)" (Theories of Surplus Value, Part I, p. 160).[2] Intellectual laborers are supposed to be "indispensable" for the process of production, and thus they "earn" rewards from products / created by physical workers. According to Marx, however, they create new value. From this value they receive a reward, leaving a part of this value in the hands of the capitalist in the form of unpaid value, surplus value.

Intellectual labor necessary for the process of material production in no way differs from physical labor. It is "productive" if it is organized on capitalist principles. In this case it is completely the same thing whether the intellectual labor is organized together with the physical labor in one enterprise (engineering bureau, chemical laboratory or an accounting bureau in a factory), or separated into an independent enterprise (an independent experimental chemical laboratory which has the task of improving production, and so on).

The following difference between types of labor has major significance for the problem of productive labor: this is a difference between labor which "embodies itself in material use-values" (Ibid., p. 162) and labor or service "which assume no objective form -which do not receive an existence as things separate from those performing the services" (Ibid.), namely, where "production cannot be separated from the act of producing, as is the case with all performing artists, orators, actors, teachers, physicians, priests, etc." (Ibid., p. 398).[3] Assuming that "the entire world of commodities, all spheres of material production-the production of material wealth-are (formally or really) subordinated to the capitalist mode of production" (Ibid., p. 397), the sphere of material production as a whole is included in the sphere of productive, namely capitalistically organized labor. On the other hand, phenomena related to non-material production "are so insignificant compared with the totality of production that they can be left entirely out of account" (Ibid., p. 398). Thus, on the basis of two assumptions, namely, 1) that material production as a whole is organized on capitalist principles, and 2) that non-material production is excluded from our analysis, productive labor can be defined as labor which produces material wealth. "And so productive labor, along with its determining characteristic- which takes no account whatever of the content of labor and is entirely independent of that content-would be given a second, different and subsidiary definition" (Ibid., p. 397). It is necessary to remember that this is a "secondary" definition which is valid only if the above-listed premises are given, i.e., if capitalistically organized labor is assumed in advance. Actually, as Marx himself frequently pointed out, productive labor in the sense defined above, and labor which produces material wealth, do not coincide; they diverge in two ways. Productive labor encompasses labor which is not embodied in material things if it is organized on capitalist principles. On the other hand, labor which produces material wealth but which is not organized in the form of capitalist production is not productive labor from the standpoint of capitalist production (see Theories of Surplus Value, p. 162).[4] If we do not take the "secondary definition" but the "decisive characteristic" of productive labor, which Marx defines as labor which creates surplus value, then we see that all traces of "materialistically" defined labor are eliminated from Marx's definition. This definition takes as its starting-point the social (namely capitalistic) form of organization of labor. This definition has a sociological character.

At first glance, the conception of productive labor which Marx developed in Theories of Surplus Value diverges from Marx's view of the labor of workers and clerks employed in trade and credit (Capital, Vol. II, Chapter 6, and Vol. III, Chapters 16-19). Marx does not consider such labor productive. According to many social scientists, including Marxists, Marx refused to consider this labor productive because it does not bring about changes in material things. According to them, this is a trace of "materialistic" theories of productive labor. Noting the position of the "classical school, that productive labor, or labor which creates value (from a bourgeois point of view, this is a simple tautology), must certainly be embodied in material things," V. Bazarov asked with astonishment: "How could Marx commit such a mistake, after having discovered the fetishistic psychology of the commodity producer with such ingenuity?"[5] A. Bogdanov criticized theories which separate "intellectual" and "material" aspects of labor, and added: "These conceptions of classical political economy were not subjected by Marx to the critique which they deserve: in general, Marx himself supported these conceptions." [6]

Is it actually true that Volumes II and III are imbued with the "materialistic" conception of productive labor which Marx subjected to detailed and destructive criticism in Theories of Surplus Value? Actually, such a glaring contradiction in Marx's views does not exist. Marx does not renounce the concept of productive labor as labor which is organized on capitalistic principles independently of its concrete useful character and its results. But if this is so, why does Marx not consider the labor of salesmen and store clerks, organized in a capitalistic commercial enterprise, productive? To answer this question, we must remember that wherever Marx spoke of productive labor as labor which is hired by capital in Theories of Surplus Value, he had in mind only productive capital. The addendum to the first volume of Theories of Surplus Value,[7] which has the title "The Concept of Productive Labor," begins with the question of productive capital. From here, Marx moves on to productive labor. This addendum ends with the words: "Here we have been dealing only with productive capital, that is, capital employed in the direct process of production. We come later to capital in the process of circulation. And only after that, in considering the special form assumed by capital as merchant's capital, can the question be answered as to how far the laborers employed by it are productive or unproductive."[8] Thus the question of productive labor rests on the question of productive capital, i.e., on the well-known theory, in Volume II of Capital, of the "Metamorphoses of Capital." According to this theory, capital goes through three phases in its process of reproduction: money capital, productive capital and commodity capital. The first and third phases represent the "process of circulation of capital," and the second phase, the "process of production of capital." "Productive" capital, in this schema, is not opposed to unproductive capital, but to capital in the "process of circulation." Productive capital directly organizes the process of the creation of consumer goods in the wider sense. This process includes all work which is necessary for the adaptation of goods for the purpose of consumption, for example, preservation, transport, packaging, and so on. Capital in the process of circulation organizes "genuine circulation," purchase and sale, for example the transfer of the right of ownership abstracted from the actual transfer of products. This capital overcomes the friction of the commodity capitalist system, so to speak, friction which is due to the fact that the system is splintered into individual economic units. It precedes and follows the process of creating consumer goods, though it is linked to this process indirectly. The "production of capital" and the "circulation of capital" become independent in Marx's system, and they are treated separately, even though at the same time Marx does not lose sight of the unity of the entire process of reproduction of capital. This is the basis for the distinction between labor employed in production and labor employed in circulation. However, this division has nothing to do with a division of labor into labor which produces changes in material goods and labor which does not possess this property. Marx distinguishes labor hired by "productive" capital, or more precisely by capital in the phase of production, from labor which is hired by commodity or money capital, or more precisely capital in the phase of circulation. Only the first type of labor is "productive," not because it produces material goods, but because it is hired by "productive" capital, i.e., capital in the phase of production. The participation of labor in the production of consumer goods (not necessarily material goods) represents, for Marx, an additional property of the productive character of labor, but not its criterion. The criterion remains the capitalist form of organization of labor. The productive character of labor is an expression of the productive character of capital. The movement of the phases of capital determines the characteristics of the labor which they hire. Here Marx remains true to his view that in the capitalist society the moving force of development is capital: its movements determine the movement of labor, which is subordinate to capital.

Thus, according to Marx, every type of labor organized in forms of the capitalist process of production, or more precisely, labor hired by "productive" capital, i.e., capital in the phase of production, is productive labor. The labor of salesmen is not productive, not because it does not produce changes in material goods, but only because it is hired by capital in the phase of circulation. The labor of the clown in the service of the circus entrepreneur is productive even though it does not produce changes in material goods and, from the standpoint of the requirements of the social economy, it is less useful than the labor of salesmen. The labor of the clown is productive because it is employed by capital in the phase of production. (The result of the production in this case consists of non-material goods, jests, but this does not change the problem. The clown's jests have use-value and exchange-value. Their exchange-value is greater than the value of the reproduction of the clown's labor power, i.e., than his wage and the expenditures for constant capital. Consequently, the entrepreneur draws a surplus value.) On the other hand, the labor of a cashier in a circus, who sells tickets for the clown's performances, is unproductive, because he is hired by capital in the phase of circulation: he only assists in transferring the "right to watch the show," the right to enjoy the jests of the clown, from one person (the entrepreneur) to another (the public).[9]

For an accurate grasp of Marx's idea, it is necessary to grasp clearly that the phase of circulation of capital does not mean an "actual," "real" circulation and distribution of products, i.e., a process of real transfer from the hands of producers to the hands of consumers, which is necessarily accompanied by the processes of transport, preservation, packaging and so on. The function of circulation of capital is only to transfer the right of ownership of a product from one person to another, only a transformation of value from a commodity form to a money form, or inversely, only a realization of produced value. It is an ideal or formal transition, but not a real one. These are "costs of circulation, which originate in a mere change of form of value, in circulation, ideally considered" (C., II, p. 139). "We are concerned here only with the general character of the costs of circulation, which arise out of the metamorphosis of forms alone" (Ibid., p. 138). Marx established the following proposition: "The general law is that all costs of circulation which arise only from changes in the forms of commodities do not add to their value" (Ibid., p. 152).

Marx sharply distinguished this "formal metamorphosis," which is the essence of the phase of circulation, from the "real function" of commodity capital (C., III, p. 268). Among these real functions Marx included: transport, storage, "distribution of commodities in a distributable form" (Ibid., p. 267), "expressing, transporting, distributing, retailing" (Ibid., p. 282 and p. 288). It is to be understood that the formal realization of value, i.e., the transfer of the right of ownership over products, "acts as middleman in their realization and thereby simultaneously in the actual exchange of commodities, i.e., in their transfer from hand to hand, in the social metabolism" (Ibid., p. 282). But theoretically, the formal realization, the genuine function of capital in circulation, is completely different from the real functions mentioned above, which are in essence foreign to this capital and have a "heterogeneous" character (Ibid., p. 282). In usual commercial enterprises these formal and real functions usually intermingle and intertwine. The labor of a salesman in a store serves for the real function of preservation, unpacking, packing, transport, and so on, and the formal functions of purchase and sale. But these functions can be separated in terms of persons as well as territorially: "purchasable and saleable commodities may be stored in docks or in other public premises" (Ibid., p. 289), for example, in commercial and transportation warehouses. The formal moment of realization, purchase and sale, may take place elsewhere, in a special "sales bureau." The formal and the real aspects of circulation are separate from each other.

Marx viewed all the real functions as "production processes continuing within the process of circulation" (Ibid., pp. 267-268), "processes of production which may continue in the process of circulation" (Ibid., p. 288). They are "processes of production which are only continued in circulation, the productive character of which is hence merely concealed by the circulation form" (C., II, p. 139). Thus labor which is applied in these "processes of production" is productive labor which creates value and surplus value. If the labor of salesmen consists of carrying out real functions: preservation, transport, packaging, etc., it is productive labor, not because it is embodied in material goods (preservation does not produce such changes) but because it is engaged in the "process of production," and is consequently hired by productive capital. The labor of the same commercial clerk is unproductive only if it serves exclusively the "formal metamorphosis" of value, its realization, the ideal transfer of the right of ownership over the product from one person to another. The "formal metamorphosis" which takes place in the "sales bureau" and which is separate from all real functions, also requires certain circulation costs and expenditures of labor, namely for accounting, bookkeeping, correspondence, etc. (C., III, p. 289.) This labor is not productive, but once again not because it does not create material goods, but because it serves the "formal metamorphosis" of value, the phase of "circulation" of capital in pure form.

Accepting Marx's distinction between "formal" and "material" functions (we prefer the term "real," which is found in Marx's work; the term "material" may lead to misunderstanding), V. Bazarov denies that the formal functions can require "the application of a single atom of living human labor."[10] "In reality only the 'material' aspect of the functions of commodity capital absorb living human labor. However, the formal metamorphosis does not require any 'expenditures' from the merchant." We cannot agree with Bazarov's view. Let us assume that all real, "material" functions are separate from the formal functions, and that goods are preserved in special warehouses, docks, etc. Let us assume that in the "sales bureau" only the formal act of purchase and sale takes place, the transfer of the right of ownership over the commodity. The expenditures for the equipment in the bureau, the maintenance of the clerks, sales agents, the keeping of accounts, to the extent that these are caused by the transfer of the right of ownership from one person to another, are all "genuine costs of circulation" related only to the formal metamorphosis of value. As we can see, even the formal metamorphosis of value requires "expenditures" by the merchant and the application of human labor which, in this case, is unproductive according to Marx.

We turn the attention of the reader to the question of bookkeeping because, as some writers claim, Marx denied the productive character of labor in bookkeeping in all cases.[11] We hold such a view to be erroneous. Actually, Marx's views on "bookkeeping" (C., II, Chapter 6) are distinguished by extreme obscurity and may be interpreted in the above sense. But from the standpoint of Marx's conception of productive labor, the question of the labor of bookkeepers does not raise particular doubts. If bookkeeping is necessary for the performance of real functions of production, even if these functions are carried out in the course of circulation (the labor of the bookkeeper is related to production, preservation, transport of goods), then bookkeeping is related to the process of production. The labor of the bookkeeper is unproductive only when he performs the formal metamorphosis of value-the transfer of the right of ownership over the product, the act of purchase and sale in its ideal form. We again repeat that in this case the labor of the bookkeeper is not unproductive because it does not produce changes in material goods (in this respect it does not differ from the labor of a bookkeeper in the factory), but because it is hired by capital in the phase of circulation (separated from all real functions).

These distinctions between formal and real functions of commodity capital, or between circulation in its pure form and "the processes of production which are carried out in the process of circulation," are applied by Marx in Volumes II and III of Capital. We cannot agree with the view that Marx applied these distinctions only in Volume III, while Volume II arbitrarily treats all expenditures on exchange, including those expended on the real functions of circulation, as unproductive. V. Bazarov[12] and A. Bogdanov [13] expressed such a view of the major difference between the second and third volumes of Capital. Actually, even in Volume II of Capital, Marx relates only "genuine costs of circulation" and not all costs of circulation, to unconditionally unproductive costs (C., II, p. 132). In Volume II he speaks of "processes of production" which are carried out in exchange and have a productive character (Ibid., p. 139). Without taking into consideration minor differences in shades of thought and formulation, we do not find a basic contradiction between Volumes II and III of Capital. This is not to deny that in Chapter 17 of Volume III, and particularly in Chapter 6 of Volume II, discordant passages, terminological unclarity and individual contradictions are found, but the basic conception of productive labor as labor which is hired by capital (even in supplementary processes of production which are carried out in circulation) and unproductive labor which serves capital in the phase of pure circulation or in the "formal metamorphosis" of value, is very clear.

A. Bogdanov objects to Marx's division of the functions of commodity capital into real (continuation of the productive process) and formal (pure circulation) on the ground that in capitalism the formal functions are just as "objectively necessary" as the real, since their purpose is to satisfy real requirements of the given productive system.[14] However, Marx did not intend to deny the necessity of the phase of circulation in the process of reproduction of capital. "He [the buying and selling agent] performs a necessary function, because the process of reproduction itself includes unproductive functions" (C., II, p. 134) i.e., the function of pure circulation. "The labor-time required in these operations [of pure circulation] is devoted to certain necessary operations of the reproduction process of capital, but yields no additional value" (C., III, p. 290). According to Marx, the phases of production and circulation are equally necessary in the process of reproduction of capital. But this does not abolish the distinctive properties of these two phases of the movement of capital. Labor hired by capital in the phase of production and labor hired by capital in the phase of circulation are both necessary, but Marx considered only the first productive. A. Bogdanov takes the objective necessity of the labor for the given economic system as a criterion of productiveness. In this way he not only erases the difference between labor engaged in production and labor engaged in circulation, but he conditionally adds "functions which are related to military activity"[15] to productive functions, even though functions related to military activity are organized on the basis of public law and not on the basis of private capitalist production. As opposed to Marx, A. Bogdanov does not take the social form of organization of labor as the criterion of its productiveness, but rather the "indispensability" of the labor, in its concrete and useful form, for the given economic system.

Thus the conceptions of writers who reduce Marx's theory of productive labor to a difference between labor embodied in material things and labor which does not possess this property, must be recognized as unconditionally erroneous. Hilferding gets closer to this problem in Marx's work. He considers every labor "necessary for the social purpose of production, and thus independent of the determined historical form which the production takes in the given determined social form," to be productive. "On the other hand, labor which is expended only for the purposes of capitalist circulation, i.e., which originates from the determined historical organization of production, does not create value."[16] Some passages in Marx's work (C., II, p. 138 and p. 142) are similar to Hilferding's definition of unproductive labor. However, Hilferding's definition of productive labor as "independent from the determined social form of production" diverges from Marx's definition. Hilferding's conception that the "criterion of productiveness ... is one and the same in all social formations" (Ibid.,) sharply contradicts Marx's entire system. Marx's distinction between labor hired by capital in the phase of production and labor hired by capital in the phase of circulation was reflected and partly modified in Hilferding's conception.

We do not ask whether or not Marx's definition of productive labor, based on the analysis of the social form of the labor, is correct, or whether the conventional definitions in treatises on political economy, which are based on "indispensability," "usefulness," the "material" character of labor or its role in personal and productive consumption, are correct. We do not say that Marx's distinction, which abstracts from the content of the labor expenditures, is more accurate than the more conventional views. We only hold that Marx's view is different from these conventional views and is not covered by them. Marx's attention was turned to another aspect of phenomena, and we may in fact regret that Marx chose the term "productive" for his treatment of the differences between labor hired by capital in the phase of production and labor hired by capital in the phase of circulation. The term "productive" had a different meaning in economic science. (Perhaps a more suitable term would have been "production labor.")


[1] Marx, Theories of Surplus Value, Part I, Moscow: Foreign Languages Publishing House, 1956, p. 380. Italics in original.

[2] The reservation about bankers will become clearer below.

[3] Economists do not always carry through a clear difference between labor which has a material character, labor which is designated to the satisfaction of material needs, and labor which is embodied in material things. For example, on two pages, S. Bulgakov, when he speaks of productive labor, has in mind either "labor directed to making objects useful to man" or "labor directed to the satisfaction of material needs," in "O nekotorykh osnovnykh ponyatyakh politicheskoi ekonomii" (On Some Basic Concepts of Political Economy), Nauchnoe Obozrenie (Scientific Survey), 1898, No. 2, pp. 335 and 336.

[4] See B. I. Gorev, Na ideologicheskom fronte (On the Ideological Front), 1923, pp. 24-26.

[5] V. Bazarov, Trud proizvoditelnyi i trud, obrazuyushchii tsennost' (Productive Labor and Labor which Creates Value), Petersburg: 1899, p. 23.

[6] A. Bogdanov and I. Stepanov, Kurs politicheskoi ekonomii (Course of Political Economy), Vol. II, 4th Edition, p. 12.

[7] [Cf. K. Kautsky's edition of Marx's Theories of Surplus Value, New York: International Publishers, 1952.]

[8] [Marx, Theories of Surplus Value, Part I, Moscow: FLPH, 1956, p. 400.]

[9] What has been said does not mean that Marx did not see any difference between material and non-material production. Recognizing as productive every labor employed by productive capital, Marx apparently held that inside of this productive labor it was necessary to distinguish "productive labor in a narrow sense," namely, labor employed in material production and embodied in material things (Theorien über den Mehrwert, 111, p. 496).

[10] Bazarov, Op. Cit., p. 35.

[11] Such a view can be found in the work of V. Bazarov (Op. Cit., p. 49) and I. Davydov, in his article "K voprosu o proizvoditel'nom i ne-proizvoditel'nom trade" (Contribution to the Problem of Productive and Unproductive Labor), Nauchnoe Obozrenie (Scientific Survey), 1900, No. 1, p. 154; and C. Prokopovich, "K kritike Marksa" (Contribution to the Critique of Marx), 1901, p. 35; Julian Borchardt, Die volkswirtschaftlichen Grundbegriffe nach der Lehre von Karl Marx, Berlin: Buchverlag Ratebund, 1920, p. 72. [12] Op. Cit., pp. 39-40.

[13] Kurs politicheskoi ekonomii (Course of Political Economy), Vol. II, Part 4, pp. 12-13.

[14] Op. Cit., p. 13.

[15] Op. Cit., p. 17.

[16] R. Hilferding, "Postanovka problemy teoreticheskoi ekonomii u Marksa" (Marx's Formulation of the Problems of Theoretical Economics), Osnovnye problemy politicheskoi ekonomii (Basic Problems of Political Economy), 1922, pp. 107-108.