Class, Productive and Unproductive Labour - Journal of Alternative ...

Journal of Alternative Perspectives in the Social Sciences ( 2012) Volume 4 No 1Class, Productive and Unproductive Labour:Divisions in the Global Working Class?Dr. Timothy KerswellAbstract: Political interactions are alliances and conflicts betweenvarious social forces. This article discusses the distinction betweenproductive and unproductive labour in relation to the various activitiesthat take place during the production and consumption of a commodity.Most importantly, this article demonstrates that the ability to performunproductive labour is dependent on the performance of productivelabour. On the basis of this, a greater understanding of the divisions thatexist between workers in the global North and in the global South isachieved.Key Words: Global South, Global North, division of labour, labouraristocracy, working class1. IntroductionPolitical interactions are alliances and conflicts betweenvarious social forces. Any consideration of the ability ofworkers to influence the conditions of their labour as well astheir outcomes in a political economy will necessarily have aclose relationship with the notion of class. Class is the onlyconcept which takes a view of humanity in terms of thefunction that groups of people perform within an economicsystem.A major part of this discussion is the theoreticalframeworks through which it is possible to understand class.Through a critical evaluation of the concepts of class, andthe theories that can be used to understand therelationships between various classes in the global politicaleconomy, a conclusion can be reached on the nature of thedifferences between workers in the world and theimplications this has for global labour strategy.17

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?The most important question with regard to class is as towhether class as a construct can be used to explainapparent divisions between workers in the global North andthose in the global South. To this end, a discussion of thedistinction between productive and unproductive labour isundertaken which will relate to the various activities thattake place during the production and consumption of acommodity, and will endeavour to understand the divisionsthat exist between workers.2. ClassCapitalism has become increasingly global in itsoperation, but the key consideration at hand is whetherworkers can have power to influence capitalism. Wright(2001:29), in describing the potential power of workers,suggests that “…exploitation constitutes a social relationwhich simultaneously pits the interests of one group againstanother and which requires their ongoing interactions; andsecond, it confers upon the disadvantaged group a real formof power with which to challenge the interests of exploiters.”Put simply, to make profits, capitalists need workers as partof the productive process. It is this need that gives workersthe potential to exert influence within or against capitalism.From the position of workers engaged in globalproduction, to apply Wright’s logic to an increasinglyglobalized capitalism, is to stress the need for political actionbeyond the national boundaries of any particular workingclass. For workers and capitalists alike, globalization wassignificant because the shackles that bound capital toindividual nation states were removed. This process greatlyaltered the balance of power in favour of the capitalistagainst the worker. Critical to Wright’s argument about thepower the working class has to exert influence is the abilityof the working class to control its own labour, the right it hasto withhold that labour, or the ability it has to determine thelevel of exertion in performing that labour (2001:29). Thecritical point is that this power was greatly diminished whenit became possible for capital to simply shift production to amore favourable location with a more compliant workforce.Indeed, capitalists need not shift their investment in18

Dr. Timothy Kerswellresponse to the threat of workers withholding or decreasingthe intensity of labour, capitalists are also able to shiftproduction simply in search of greater profits.At the heart of power that capitalists have in a globalizedproduction setting, is the discipline that is exerted on theworking class through its fractured nature. The potentialwillingness to withhold or slow down production from onegroup of workers is nullified by the willingness of anothergroup of workers to work should the opportunity arise. Farfrom confronting capitalists and capitalism and attemptingto exert influence, the dynamics of global capitalism have ledto a situation where workers are far more inclined to acceptcompromise working longer hours, for lower wages in worseconditions. To examine the dialectical opposite of Wright’sview of the power held by the working class in capitalism, asmuch as the capitalist needs the worker, within a capitalistsociety, the worker needs the capitalist in order to meet theirmaterial needs. The worker, above everything, needs to beemployed.If the compromising situation workers of the early 21 stcentury find themselves in is ever to be altered, it is thesubjective strength of the workers that will have to change.Global solidarity amongst workers involved in globalizedproduction would be significant as it would reassert thebargaining position of the workers. If capitalists lost theability to force workers to bargain against one another forwork, then the dynamics of global capitalism would beentirely changed. The important question that flows fromthis strategic point however, is in relation to who would beinvolved in such a solidaristic relationship. In consideringaggregate groups of workers, the most obvious conceptaround which a basis for solidarity can be formed, is thenotion of the working class.In accounts that see workers of the world as a singularwhole, what brings the majority of the people in everycountry together as part of the working class is the wagerelation. This position is held by Marx and Engels in theCommunist Manifesto, but equally it is held by numerousmodern theorists both Marxist and non-Marxist alike. The19

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?Communist Manifesto can be seen as one of the first suchtheories, with Marx and Engels (2011) writing of thecapitalist age that “National differences and antagonismbetween people are daily more and more vanishing, owing tothe development of the bourgeoisie, to freedom of commerce,to the world market, to uniformity in the mode of productionand in the conditions of life corresponding thereto.”Empire by Hardt and Negri is one of the most prominentcontemporary examples of such thinking. Hardt and Negrisuggest that a qualitative change has occurred withincapitalism. Specifically, they propose that the prior age ofrival imperialist powers has been replaced by an era withonly one power (Hardt and Negri, 2000:9). As a result ofthis, they consider the world as being divided into two globalopposing social forces, the empire and the multitude, withthose outside the capitalist class forming the multitude.Commenting on the alignment of global social forces, Hardtand Negri (Ibid:393) suggest “Empire creates a greaterpotential for revolution than did the modern regimes ofpower because it presents us, alongside the machine ofcommand, with an alternative: the set of all the exploitedand subjugated, a multitude that is directly opposed toempire, with no meditation between them.” Implicit in theapproach of Hardt and Negri is the assumption of identityalong working class lines. In their eyes therefore, differencesbetween workers either do not exist, or are irrelevant to theirapproach which is centred on a global ‘multitude’ ofimmaterial workers.In terms of non-Marxist analysis, Freeman, argues firstlythat there is a global labour pool which is in competitionwith each other for the existing amount of capital in the formof investment in wages. He thus describes waged workers asbeing in an identical situation or as he puts it “on the sameeconomic page (Freeman, 2006:1)”. From a Marxistperspective, Robinson and Harris (2000:17) take a similarview, suggesting “global class formation has involved theaccelerated division of the world into a global bourgeoisieand a global proletariat” as a result of globalization.Robinson and Harris add an additional stipulation in20

Dr. Timothy Kerswellorder to define who makes up the global proletariat, that ofbeing involved in the globalized production process. As willbe discussed later in this article, defining who is actuallyinvolved in production is a contestable matter. Further thanthis, there is the issue of who is involved in globalproduction. Given the polarizing argument of Robinson andHarris, what is implicit in their analysis is that everyone whoisn’t being drawn into the global bourgeoisie is being drawninto the global proletariat, which in the end leads to thesuggestion that all waged workers have an objective identityof interest.This position is echoed by Negri (1973:126-9) whosuggests that "…we can now say that the concept of wagelabourer and the concept of productive labourer tendtowards homogeneity”, leading to "the new social figure of aunified proletariat." Summarizing this position, Wright(2002) comments that: “In short, all moments of thecirculation process, and even reproduction, were seen to beproductive of value; the distinction between productive andnon-productive labour was obliterated.”In discussing how Marxist theoreticians have generallydefined class, Wright (2005:12) suggests, “It is commonwhen people think about variations in the rights and powersover various factors of production to treat these rights andpowers as having a simple, binary structure: you either ownsomething or you do not.” The origin of such a positioncomes from Marx and Engels (2011), who himself envisagedthe capitalist age as dividing the world into two opposingclasses, the bourgeoisie and the proletariat.In attempting to define how the proletariat comes intobeing, Marx (2011) suggests “the labourer instead of being inthe position to sell commodities in which his labour isincorporated, must be obliged to offer for sale as acommodity that very labour-power, which exists only in hisliving self.” The reason that the labourer is obliged to selltheir labour power is, according to Marx, that they do notown means of production. By contrast, the bourgeoisie musthave means of production as well as the ability to sustain21

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?itself while the commodity is produced and its value realizedon the marketplace (Ibid).This raises a question about who the bourgeoisie is, andwhat material circumstances exist that this status might beobtained. A narrow definition of the bourgeoisie sees themas only the class which owns literal means of production,such as factories, or capital employed in finance throughstocks and bonds and that the proletariat is anyone wholacks the former. Despite the persistence of this view, I amproposing that it be subject to criticism. In Marx’s time it isrelatively easy to see how one could consider a polarizationthesis whereby there were two distinct classes confrontingeach other, one with all the money and the other with all thelabour power. Marx did not and could not have accountedfor some factors such as wages that run far beyond asubsistence level, enabling the accumulation of capital in theform of assets, land and superannuation as well as access tocredit.The problem with such a simple binary class analysis isthat it masks the material differences between workers indifferent places, instead treating them as a homogenousmass with the same economic circumstances and the samepolitical goals. There is a tendency of thought withinorthodox Marxism that every individual country has abourgeoisie and a proletariat, and that the proletariatconstitutes the majority of every country’s population. Anexample of this approach is to be found in Buhle (2001:53)who contends that as 80% of the US labour force are ‘nonsupervisoryemployees’ that as a result the majority ofAmericans are ‘working class’. When the interconnectednessof the global economy is considered, the logical outgrowth ofsuch thinking is that there is a global bourgeoisie and aglobal proletariat, confronting one another as Marx hadimagined.The result of such thinking is that there is littleappreciation of the differing material conditions of workersaround the world, as well as their differing politicalformations. There is a persistent assertion of the identity ofinterest of workers throughout the world, however it appears22

Dr. Timothy Kerswellthat this assertion lacks a structural base. It is not untilthis assumption is questioned that it becomes possible toinquire into the nature of the relationship between workersin the global North and the global South.The potential for globalized resistance to capitalism isoften assumed as early as when Marx (2011) wrote that“Labour in a white skin cannot emancipate itself where it isbranded in a black skin.” Few have dared to question whythis might not be the case. While Marx expresses a noblesentiment, the vast differences that exist between workers inthe global North and those in the global South tend tocontradict the notion that workers on either side of thisstructural divide share common interests or aspirations.By contrast, there are arguments which stress adistinction between productive and unproductive labour as adefining feature of class. Poulantzas (1975:210) arguedfirstly that not all waged workers form part of the workingclass, just because all members of the working classaccording to Marx are waged workers. According toPoulantzas, the distinction that determines whether or notwaged workers are part of the working class is whether theyare involved in productive labour in its Marxist sense. Formost Marxists, productive labour has nothing to do with theutility or content of the product, but simply that the labourin question produces surplus value.It is on the basis of the productive/unproductivedistinction that Poulantzas excludes many forms of wagedwork from the working class. For instance, Poulantzas says“labour…contributing to the realization of surplus value, isnot productive labour; wage earners in commerce,advertising, marketing, banking and insurance do notproduce surplus value and do not form part of the workingclass (Ibid).” More broadly, Poulantzas disqualifies allservices labour in general suggesting that such labour doesnot produce surplus value. It is the argument of Poulantzasthat services involve the exchange between revenue orincome and labour power. In the case of services,Poulantzas argues that labour power is being purchased inorder to consume it directly, rather than to consume it in a23

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?process that produces surplus value.A position which holds that all persons earning a wageform part of the working class is open to perverseconclusions, and in this sense, Poulantzas’ work remainsvalid. For instance, in 2006, football players in the EnglishPremier League, were found to earn an average yearly salaryof 676,000 pounds per year before bonuses (Harris, 2006).While this is an extreme example, the point that it illustratesis that the wage relation alone is insufficient to determinesomeone’s class position. It seems unreasonable to not takeaccount for the fact that wages which go beyond subsistenceconsumption and allow for the accumulation of large sumsof money would have some impact on the class character ofthe recipient of those wages.Contrary to the position of Poulantzas however, there aresome forms of what are termed “services” which actuallyproduce commodities which are enduring in nature, such asintellectual property. This does not discount the fact thatthe majority of occupations classified under the servicessector are those which do not produce surplus value. Amore accurate way of characterizing the division betweenproductive and unproductive labour is by establishing adividing line between labour that is both productive ofcapital and productive of surplus value as the definingfeature of whether a labourer constitutes part of the workingclass. An approach that attempts to invalidate the differencebetween productive and unproductive work fails to grasp thereality that in general, unproductive work is only possiblebecause of the material base created by productive work.3. Productive and Unproductive LabourWhat labour counts as creating value, is a seeminglyinnocuous but central element which is still the subject of agreat deal of debate. The following section will reviewcompeting perspectives on the question of the productionboundary and draw links between these differing views andthe logical consequences these have for analyses in politicaleconomy, and also for global labour strategy.24

Dr. Timothy KerswellThe orthodox definition of the production boundary isthat entailed in the 1993 United Nations System of NationalAccounts (SNA) (United Nations Statistics Division, 1993).The SNA defines the production boundary as(a) The production of all individual or collective goods orservices that are supplied to units other than theirproducers, or intended to be so supplied, including theproduction of goods or services used up in the process ofproducing such goods or services;(b) the own-account production of all goods that are retainedby their producers for their own final consumption or grosscapitalformation;(c) the own-account production of housing services byowner-occupiers and of domestic and personal servicesproduced by employing paid domestic staff.It is not my intention to become involved in a discussionabout the various international metrics with whichproductivity is measured. My reasoning behind citing theUN SNA is that it is indicative of a particular view of what isproductive labour. In comparison with views to be lateranalyzed, this view of productive labour is a broad view as itsuggests that every socially necessary activity aside frompersonal consumption adds value to an economy (Studenski,1958:12). A view of production which includes all goodsproduced and services provided for a party other than theproducer, implies that every good or service which incurs atransaction is productive. All such contributions thereforeexpand the total social wealth. By contrast to this, classicalpolitical economy had always maintained a distinctionbetween activity that was productive and non-productive,and this position was one that represented “the mainstreamof economic thought for almost a century (Kendrick,1970:20).”The initial shift away from this view and towards the viewthat all socially necessary activities are productive activitiescoincides with the rise of neoclassical economics (Bach,25

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?1966:45). Such a view judges whether an activity isproductive by whether or not someone is willing to pay forthat activity to take place (Ibid). Eisner for example, statesthat “the basic criterion used for distinguishing an activity aseconomic production is whether it is reflected in the salesand purchase transactions of a market economy (Eisner,1988:1612).” In developing national accounting measures inthe lead up to, and during the Second World War, Keynesand economists of his ilk merely aggregated these prices on anational scale (Korzeniewicz et al, 2004: 540). In doing so,they did not question the received wisdom from neoclassicaleconomics about the basis by which an economic activitybecomes classed as productive or non-productive (Shaikh,1996:4).Some Marxist literature has criticized the notion that allfactors in a political economy also produce value includingGerdes (1977:39), Benetti (1976) and Benetti, Berthomieuand Cartelier (1975). Harvey summarizes these criticismsand suggests that the view that all activities in a politicaleconomy produce value amounts for an apology for theexisting distributional state of affairs. If each factor involvedin production is only getting what it creates, then the statusquo is justified, exploitation is not occurring, and classstruggle or government intervention should be limited to thatwhich ensures that fair competition takes place within amarket framework (2006:41).The following constitutes an argument against theposition that all factors create value, even to the extent ofarguing against the notion that all labour creates value. Byextension, I will demonstrate that distribution of valuebetween factors amounts to the exploitation of those factorsthat are productive of value, with the non-productive sectorsbeneficiaries of this exploitation.There are a number of views both historic andcontemporary which make a clear distinction betweenproductive and unproductive labour. These positions areimportant as they provide alternatives, which may improveunderstanding of the global political economy and/orcontribute to different or improved views about global labourstrategy.26

Dr. Timothy KerswellThe first political economist whose work I will address isAdam Smith who in making a distinction between productiveand unproductive labour wrote:"There is one sort of labour which adds to the value of thesubject upon which it is bestowed; there is another whichhas no such effect. The former, as it produces a value, maybe called productive; the latter, unproductive labour. Thusthe labour of a manufacturer adds, generally, to the value ofthe materials, which he works upon, that of his ownmaintenance and of his master's profit. The labour of amenial servant, on the contrary, adds to the value ofnothing…(Smith, 2009:196)."Smith makes an explicit distinction between theproduction of tangible commodities and the provision ofservices and goes on to suggest that the production ofcommodities is productive labour, whereas the provision ofservices is unproductive labour. This position leads Smith tobe criticized by those who view all forms of labour asproductive, such as McKenzie of the US Libertarian thinktank, the Cato institute who claims that: “…Smith suggestedthat both "productive" workers (who generally seem to fit thedescription of goods workers) and "unproductive" workers(who generally seem to fit the description of service workers)must be maintained by the "annual produce of land andlabour of the country (McKenzie, 1987)."He goes on to suggest that “Smith failed to recognize thatservices are as valuable to consumers as the goods they buy,that services are often just as much goods as "manufacturedgoods" are, and that services facilitate the production of bothgoods and other services (Ibid).” By contrast, Smith stressesthat commodities must be physical in order to satisfy hisdefinition of productive activity, suggesting:"But the labour of the manufacturer fixes and realizesitself in some particular subject or vendible commodity,which lasts for some time at least after that labour is past. Itis, as it were, a certain quantity of labour stocked and storedup to be employed, if necessary, upon some other occasion.That subject, or what is the same thing, the price of that27

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?subject, can afterwards, if necessary, put into motion aquantity of labour equal to that which had originallyproduced it (Smith, 2009: 197)."Here Smith takes his distinction between productive andunproductive labour a step further by defining productivelabour as only that which produces a tangible, durable andvendible commodity. In relation to this, Savran and Tonak(1999:136) suggest that Smith is actually confusing twodifferent factors in the provision of services and how theymay or may not be forms of productive labour. Firstly, theyraise the idea that a wealthy person may employ forinstance, a personal tailor, a worker who clearly producesphysical goods. This person does not create commodities forsale, and therefore does not expand capital and as will bedemonstrated later their labour is not productive. Secondly,they raise a situation whereby persons are capitalisticallyemployed in order to produce services in which case they areproducing a commodity for sale, even if that commodity isimmediately consumed by the purchaser of that commodity(Ibid). As will be demonstrated later in this section, suchpersons perform productive labour.In contrast to Smith and the classical economists, thedistinction between productive and unproductive labour forMarx is embedded in his analysis of surplus value, and reliesheavily on the distinction between labour (the actual work ofa worker) and labour power (the ability for a given worker towork) and also on the historical specificity of capitalism as amode of production where commodities are produced fortheir value in exchange as opposed to being produced forimmediate consumption.For Marx, the concept of surplus value illustrates aprocess by which the labourer exchanges his labour powerfor a wage, which maintains the labourer (and thus futurelabour power). The labourer then goes on to produce withtheir labour by manipulating instruments of production andraw materials, creating a use value in the form of acommodity, which has an exchange value which is greaterthan that paid for maintenance of his labour power. It isthus that the capitalist who invests in the process ofproduction is able to convert this surplus value into profit by28

Dr. Timothy Kerswellexchanging commodities produced by the labourer intomoney. The above process can be expressed as M – C(LP+MP)…P…C’ – M’ (Harvey, 2006:69).M (Money) is used to purchase C (commodities) in theform of MP (means of production) and LP (labour power).The productive process then occurs (P) which creates a newcommodity (C’), which is then sold for a greater sum ofmoney than the initial outlay (M’). The difference between M’and M constitutes surplus value. The most importantfeature of this process is that the source of this surplusvalue is labour. In Marx’s (2011) words, “the value of labourpower and the value which that labour power creates in thelabour process, are two entirely different magnitudes’. It isbased on this productive process that Marx (Ibid) arrives athis definition of who is a productive labourer:“That labourer alone is productive, who producessurplus-value for the capitalist, and thus works for the selfexpansionof capital…Hence the notion of a productivelabourer implies not merely a relation between work anduseful effect, between labourer and product of labour, butalso a specific, social relation of production, a relation thathas sprung up historically and stamps the labourer as thedirect means of creating surplus-value.”The underlying reason that Marx’s definition of productivelabour is more expansive than that of Smith and theclassical economists is due to his definition of thecommodity. Marx’s view of commodities includes someservices as well as physical goods (Ibid). In going beyond thepurely physical, Marx’s concept of production is able toincorporate more possibilities than Smith’s.To compare Marx’s idea of a commodity as a thing whichsatisfies a human want, to Smith’s idea of a commodity as adurable, tangible and vendible object is to illustrate thedifference between the two approaches. Smith’s definition ofa commodity is narrower, excluding anything that is notphysical in nature. In considering something such asintellectual property for instance, if Smith’s approach wasfollowed to its logical conclusion he would necessarilyconclude that intellectual property is not a commodity as it29

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?is not tangible. Marx’s idea of a commodity, on the otherhand, is able to accommodate non-tangibles as commoditiesand is thus the more expansive of the two approaches.Smith’s narrower idea of what a commodity is leads to anarrower idea of what productive labour is, and the converseis true for Marx who’s only real criteria for whether anactivity falls under productive labour or not is that anacrtivity satisfies a human need or want, and valorizescapital. A distinguishing feature of Marx’s idea of productivelabour is that, owing to his view that productive labourcreates surplus value, it is specific to capitalism.In examining Marx’s view of productive labour, at thispoint it is useful to more closely examine the concept and itsrelationship to capitalism so as to avoid futuremisunderstandings about the types of labour that areproductive/unproductive. Savran and Tonak (1999:120)first use the concept of ‘productive in general’ to define thoseforms of labour that are productive irrespective of whetherthey take place in capitalist societies or non-capitalistsocieties. They see an understanding of labour that isproductive in general to be important to the understandingof labour that is productive of capital, suggesting that“because insufficient attention has been paid to a generaldefinition of productive labour under all socio-economicformations that all economic activities under capitalism itselfhave come to be instinctively regarded as productive (Ibid).”Savran and Tonak, set out the forms of economic activitywhich must be carried out in every society so as to “assurebiological and social reproduction of the members of societyand of the socio-economic formation itself (Ibid:121).” Theymake a distinction between five spheres of human activityincluding production, circulation, distribution, reproductionof the social order and social/personal consumption. Theinitial four concepts were developed by Marx (1973:88-100)in his Grundrisse, with the fifth being developed by Shaikh(1999:148) to distinguish between consumption which leadsdirectly to production, and consumption proper. Toestablish what labour is productive, the first step is toexamine each of these spheres and determine firstly if theyinvolve labour at all, secondly if they involve labour that is30

Dr. Timothy Kerswellproductive in general, and finally if they involve labour thatis productive of capital.Firstly, it is possible to eliminate personal and socialconsumption as this activity does not involve labour. AsSavran and Tonak observe, consumption “is an activitycommon to all living species and does not involve labourwhich is the differentia specifica of the human race(Ibid:121).”With regard to distribution of the product, Savran andTonak see this as the outcome of the relations of productionin any given society. It is important to note that distributionof the product is in no way specific to capitalism however, asfor instance in a slave society when a slave is fed by itsmaster, then the product is being distributed. As Savranand Tonak note, distribution of the product is “predicated onthe expenditure of labour on the part of the direct producersbut is not itself an act which involves labour (Ibid:121).” Asit does not involve labour, it is not productive in general, andtherefore cannot be productive of capital.When it comes to circulation as well as reproduction ofthe social order, the picture becomes more complicated.Circulation, which can be defined as the “sphere of thevarious metamorphoses between the commodity-form andthe money-form (Ibid)” is not specific to capitalist society.Despite this, this sphere takes on special importance withincapitalist society as production shifts more to commoditiesfor exchange rather than for use values immediatelyconsumed. What differentiates the circulation sphere fromthe previously discussed consumption and distributionspheres is that at least in some cases, labour is taking place(Ibid).An example of this in capitalist society can be seen in aretail sector worker (assists in turning commodities intomoney), or a purchasing manager (assists in turning moneyinto commodities). Labour is not necessarily performedhowever, nor is this sphere unique to capitalist societies andan example of this is in the form of a merchant who predatescapitalism and performs no labour. In similar fashion, thesphere involved with reproduction of the social order, can31

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?involve labour. Examples of this come in the form of publicservants, soldiers and police officers. While these areexamples of labour within the sphere of reproduction of thesocial order, there are also examples where labour is notperformed such as religious leaders (Ibid).Leaving aside the activities in which labour is notperformed, the next question to answer is whether or notthose actually performing labour in these sectors areproductive in general. The answer, according to Savran andTonak, is in the negative and the reasoning behind this canbe shown by comparing and contrasting these forms oflabour with those in the production sphere. What sets apartworkers in the production sphere is that they are “involvedwith the creation of use values…through the transformationof nature (Ibid).” By comparison, those involved incirculation or reproduction of the social order “carry out,within the context of a given social division of labour…taskswhich flow from a historically determined set of socioeconomicrelations among human beings (Ibid).” As suchlabour in both the circulation and reproduction of the socialorder spheres are considered to be unproductive labour.The next level of sophistication is that which considerslabour specifically within capitalism. The importance ofproductive labour specifically within capitalism wasrecognized by Marx who observed that “since the immediatepurposes and the authentic product of capitalist productionis surplus value, labour is only productive, and an exponentof labour power is only a productive worker, if it or hecreates surplus value directly, i.e. the only productive labouris that which is directly consumed in the course ofproduction for the valorization of capital (2011).”The above position, expressed by Marx, enables a clearerexplication of labour that is productive of capital, as opposedto labour that is productive in general. Firstly, as mentionedby Savran and Tonak, “the labour of self-sufficient peasanthouseholds and domestic household labour is not productiveof capital (Savran and Tonak, 1999:125)” as capitalistproduction is based around the production of surplus value,embedded in commodities. In addition to this pettycommodity producers equally cannot be regarded as32

Dr. Timothy Kerswellcapitalistically productive as they own small means ofproduction and sell products rather than labour power.In addition to productive workers who are not productiveof capital, fall workers who are productive and yet are a formof wage labour paid out of revenue. An example of suchworkers could include a nanny or a butler, the menialservants described earlier by Smith. Such workers sell theirlabour power, however they do not create surplus value.While Savran and Tonak suggest that such workers areemployed by capitalists (Ibid:127), it is also possible tounderstand these workers to be employed as a result of thesurplus of other workers who have earned more than what isrequired for subsistence and who choose to purchase suchservices. It is this example which corresponds most closelyto the criticisms of services I mentioned earlier from classicalpolitical economists such as Smith in that revenueconsumed by purchasing services is revenue not only notutilized in the process of production, but revenue wasted asit consumes potential capital rather than expanding capital.To review this analysis of productive and unproductivelabour and particularly labour that is productive of capital, itis useful to recall the cycle of capital.M–C…P…C’–M’The effect of the above analysis is to suggest that only atthe stage where the initial commodities are consumedthrough the process of production (C…P…C’) is labourproductive of capital. The mere exchange of money intocommodities (M-C) or commodities into money (C’-M’),however necessary it may be, is not productive of capital, noris the use of M’ to purchase personal services.The above analysis carries with it an importantimplication for the other ‘spheres’, one that cuts to theessence of Marxist theory. At the core of the Marxistconception of capitalism is the wage labourer who confrontsthe capitalist with nothing to sell but his labour power. Thecapitalist purchases the labour power from the labourer andthe labourer performs labour, and through the process ofproduction creates value equal to cost of the labour powerthe capitalist paid for. Over and above this, the labourer33

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?creates surplus value, which the capitalist then uses toexpand capital.The non-productive spheres described by Savran andTonak introduce a new layer of complexity into the Marxistunderstanding of capitalism. Labourers are confrontingcapitalists with labour power, and yet they are beingemployed by capitalists despite not producing surplus value.This raises two important questions, firstly, if the labour ofthese labourers is not a source of value, then why does thecapitalist employ them at all? Secondly, if the labour ofthese labourers does not produce any value, in the long run,where does the value which is exchanged for their labourpower come from?In the first instance, the answer is that the capitalistmust realize the value of a commodity through sale andunder the prevailing historical conditions which involves anadditional layer of labour above production. As noted byHarvey, capital, is a process of accumulation, and ceases tobe capital if it is not circulating (Harvey, 2006:84). As aresult of this, it becomes necessary for capital to employwage labour in the sphere of circulation. The social andhistorical necessity to bring a commodity that has beenproduced and turn it into money however, does not makethis labour productive. The capitalist merely trades off theloss in value necessitated by the employment of anunproductive worker as against the greater loss in that acommodity would not be sold and in doing so, realizes thesurplus value created through the initial production of thecommodity.If the premise is accepted that the circulation workerproduces no value, and only realizes surplus value throughthe sale of commodities, the question then becomes one ofwhere the value comes from that remunerates this worker. Ifthe premise is accepted that only labour which is productiveof capital creates surplus value, then the answer therefore isthat the circulation worker is paid out of the surplus valuewhich is extracted in the process of commodity production.In a similar way, workers involved with the reproductionof the social order are paid out of the surplus value extracted34

Dr. Timothy Kerswellin the process of commodity production. This process issomewhat more complicated than that involved in thecirculation sphere as the value required to sustain thissphere is acquired primarily through the collection of taxes.In terms of the taxes appropriated from capitalists andworkers in the circulation sphere, this value is surplus valueextracted from the production sector to begin with. Themore complicated question is in terms of income taxextracted from the production sector worker as in manycases, income tax appropriated goes into programmaticspending which directly benefits the production workersthemselves, making it difficult to conceive of such a situationas a form of exploitation. Despite the desirability, or evennecessity of such a situation, it follows that if productivelabour is the sole source of value, and that the sphereinvolved with the reproduction of the social order creates novalue of its own, then this sphere exists due to the extractionof value from the production sphere.What follows from this is that as a whole, both circulationlabourers and social reproduction labourers have a stake inthe maximization of surplus value extraction from theproduction sphere. The upper limit at which labourers inthese spheres can bargain for better wages is determined bythe amount of surplus value extracted from the productionsphere. The following Venn diagram provides a pictorialrepresentation of the political economy of the distribution ofvalue, although one that is not to scale.Production labourers have an interest in minimizing theamount of surplus value extracted by capital. In doing sothey directly challenge the amount of value that is able to beaccumulated as capital but also the amount of value thatcan be distributed to the circulation and social reproductionsectors. By contrast, capitalists as a sphere have an interestin maximizing the amount of value extracted from theproduction sphere but also minimizing the amount of valuethey must spend on circulation and social reproduction.Finally, circulation and social reproduction workers have aninterest in maximizing the amount of surplus value extractedfrom the production sphere, but then minimizing the amountof value that returns to capital by maximizing their wageshare. The relationship between the three spheres is35

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?expressed in figure 1.Figure 1 – Distribution of value between spheresIt is theoretically possible to imagine a situation wherebythe middle circle for ‘capitalists’ does not exist, such as if allcompanies were under a form of socialized ownership withall profits to be distributed in the form of wages without anyexpansion to the capital base as depicted in figure 2. Suchan illustration draws out the contradiction between thecirculation/social reproduction spheres and the productionsphere. What is evident is that the less surplus valueextracted from the production sphere, the less value isavailable to compensate the circulation and socialreproduction spheres.Figure 2 – Hypothetical Distribution of Value betweenSpheres if no Capitalist Sphere36

Dr. Timothy KerswellIn summary, Table 1 lists the various types of labourdiscussed in this section and the source of the value thatcompensates that labour.37

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?Table 1:Types of labour and the source of the valuecompensating labour powerType of LabourCapitalistically EmployedProduction LabourHouseholdLabour/Subsistence LabourPetty Commodity ProducersCirculation LabourSocial Maintenance LabourSource of ValueReproduces its own valuethrough “necessary labourtime” then produces surplusvalueReproduces its own value, asno commodities areproduced, cannot producesurplus valueNot capitalistically employedand thus cannot producesurplus value, mayreproduce or exceed ownlabour power value withproductCompensated out of surplusvalue extracted fromproduction sphereCompensated out of surplusvalue extracted fromproduction sphereTo conclude this analysis is to say that all non-productivelabour as well as capital accumulation is made possiblethrough the productive labour that takes place in the sphereof production, and the exploitation of productive labourers.This position carries a number of important conclusions.Firstly, the productivity of labourers in the productive sphereis underrepresented by the SNA as within the prices that arecredited as the result of non-production labour is hiddenvalue from the productive sectors. In terms of nationalaccounting, the macro implication of this is that countries38

Dr. Timothy Kerswellwith larger sectors involved in capitalist production havetheir economic performance underreported.The extension from this is that countries with productionsectors which produce goods for export are actuallyexporting surplus value, with that surplus value beinghidden in the prices of intermediate as opposed to final sale.This effectively hides the value that was produced by theproduction sector by making the claim that the value wassomehow generated in circulation.What this means is that there is a material basis for acontradiction between the productive sector workers who areinvolved with the creation of value, and the workersassociated with social consumption either in the form ofcirculation or of social maintenance, whose work and whosewages are paid out of the surplus value produced by theproductive labourers. This is because a reduction in the rateof surplus value, an increase in the productive sector wageshare, would necessarily lead to a decrease in the shareafforded to the other spheres of labour as well as the shareto capital. Capitalists as a social class therefore, share atemporary identity of interest with the workers involved insocial consumption to maximize the exploitation ofproductive labourers. This remains the case even if thesocial consumption workers are involved with a separatedivergence of interest with the capitalists who employ them,and an ensuing conflict over the distribution of surplusvalue that has been created through the process ofproduction. This structural contradiction acts as adisincentive to acts of solidarity between workers of theglobal North and workers of the global South, but alsobetween production and consumption workers as a whole.In Marxist terms, this means that the capitalists, theproductive workers and the social consumption workers mayeach be classes in themselves.In testing the theory that there is a contradiction betweenproduction and non-production workers, it is necessary toclosely examine the general characteristics of certain kindsof work. In making a distinction between production39

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?(production) and non-production (distribution and socialmaintenance) workers, Shaikh and Tonak create a space fora deeper analysis of the characteristics of various types oflabour by providing concepts to be employed in analysis. Itthen becomes desirable to examine the various kinds oflabour, production, distribution and social maintenance andto see if the material differences between these kinds oflabour are the basis of a contradiction.As explained earlier, in this paradigm, production isdefined as: “the creation or transformation of objects ofsocial use by purposeful human activity (Shaikh and Tonak,2007:22).” This definition of production encompasses allmanufacturing, but also some services such as“transportation, entertainment, lodging, cooking (Ibid:40)”and others. The key criterion by which an activity is judgedas productive is whether or not the activity in questioncreates a commodity and whether or not it valorizes capital.An activity can stop being productive if it ceases to do eitherof these, such as if somebody labours in order to create anobject for their own personal consumption, or if a workerlabours as a personal servant and is paid out of revenue.With the various spheres of labour defined, the questionbecomes that of what relevance such an argument has interms of analysis of the global political economy. Even if oneaccepts that the circulation and social reproduction spheresdo not produce value and rather appropriate a part of thevalue produced through productive labour, the question maybe raised as to why we should be concerned with thesespheres of labour.The circulation and social reproduction spheres becomeinteresting as an issue within the global political economywhen these spheres come to dominate the capitalist sector ofany particular country. Considering this, any of the worldseconomies can be thought of as either a production economyor a consumption economy. A production economy includesthose countries where the majority of the capitalisticallyemployed labour force is involved in the sphere ofproduction. By contrast, a consumption economy includesthose economies where the majority of the capitalisticallyemployed labour force is involved in social consumption,40

Dr. Timothy Kerswellwhether it is circulation or social maintenance.A discussion such as this raises two related questions interms of understanding the global political economy, and inparticular how to understand specific countries and theirworkforces within the global political economy. Firstly, inrelation to the treatment of countries with large levels ofpopulation (even a majority of the population) involved insubsistence production and secondly, the treatment ofcountries with a large state sectors relative to countries witha small state sector.In terms of countries with a large part of the workforceemployed in subsistence production, by virtue of beingsubsistence producers, these persons have no impact on thecapitalist sphere of production. The archetypicalsubsistence producer creates sufficient use values to sustaintheir existence without an increase or decrease in theirstandard of living, as implied by the term subsistence.According to the view of productive labour described earlierby Savran and Tonak, subsistence labourers are productivein general as they produce use values but they are notproductive of capital as they do not produce surplus value.As they neither produce nor consume surplus value,subsistence producers typically have no impact on the globalpolitical economy in a purely distributional sense.With regard to state employees, the real question againrelates to that of commodity production. As Savran andTonak note, “the secular expansion of the state sector(Savran and Tonak, 1999:138)” has meant that in manycases the state takes responsibility for a variety of activitiesunder capitalism, and thus state employees become asignificant subject of focus. What is also noted is that thefact that an activity occurs under the auspices of the statesays nothing about whether that activity is productive or not.State activities, it is argued, can be grouped under threemain headings: those involved in reproduction of the socialorder, those that provide social services those involved witheither fully or partially state owned corporations and thosethat provide social services (Ibid). In the case ofreproduction of the social order, it is clear that this does notmeet the criteria of ‘productive in general’ (ibid). As no41

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?commodities are created, no surplus value can be produced.By contrast, in the case of the state owned corporations,these are capitalist firms which are managed by the state,meaning if employees of these firms produce commoditiesthey are also producing surplus value and are productive ofcapital.The more complicated case comes in the form of theprovision of social services. There are some social servicessuch as healthcare or education which create new usevalues. Savran and Tonak suggest that whether or not thesecommodities are on the market determine whether or notthey are productive or unproductive (Ibid:139). With regardto this, I feel that Savran and Tonak are contradicting theirearlier position that only that labour which is productive ingeneral can be productive of capital. If social services can bea commodity on the capitalist market place, by extensionthis means the work of social services workers is productivelabour. If these commodities are taken off the capitalistmarket, all that can be said is that they are not productive ofcapital, not that they are unproductive in general. Thereason for this is that these forms of labour create new usevalues.Still more complicated to understand are situations wheresocial services are provided as part of a welfare state. Inthese cases the labour is not productive of capital, leading tothe initial conclusion that the labour is productive in generaland thus would have a neutral impact on the global politicaleconomy. When considering that this group derives itsincome from taxation however, the picture becomessomewhat murkier.As taxation is typically corporate taxes from capitalistsand income taxes from workers, it remains to be establishedwhether or not these workers benefit from this exploitation ofthe productive sector. This requires an examination of thesource of the value that is being taxed. In a consumptioneconomy where the majority of all occupations areunproductive, it follows that the majority of all income isderived from the exploitation of productive sectors elsewherein the global political economy, either domestically orinternationally, meaning social services workers are receiving42

Dr. Timothy Kerswellsecond hand surplus value. Figure 3 demonstrates howdespite not being unproductive, the income of Social Serviceslabourers may be partially generated from the surplus valueextracted from the productive labourers. The example infigure three is of a consumption economy.Figure 3 – Sources of Social Services Income in aConsumption Economy where Social Services are undersocialized ownershipBy contrast, and as demonstrated in Figure 4, socialservices workers in a production economy would receivetheir income partly through the taxes paid by productivelabourers, and partly through the surplus value generatedby productive labourers as both capitalist profits and incometaxes from circulation and social reproduction workersgenerate their income.Figure 4 – Social Services Income in a Production Economywhere Social Services are under socialized ownership43

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?In both cases, it can be seen that social services workers,irrespective of whether they are productive of capital or notcan benefit from the increased exploitation of the productivelabourers. This can generate either potentially largercapitalist profits or circulation/social maintenance incomes,which when taxed form the economic base of social servicesincome.Having addressed these issues, a broad picture of theglobal political economy is established by way of varioustypologies of labour which can be divided into four basiccamps. Firstly there is the camp that neither exploitsproductive labour nor is exploited itself includingsubsistence producers, household workers, domesticservants and petty commodity producers. Secondly, there isthe camp which exists solely due to the exploitation of theproductive sector including capitalists, but also circulationand social maintenance workers. Thirdly, there is the socialservices workers whose contingent peculiarity as being partof a welfare state have led them to accumulate surplus valuefrom productive labourers while being productive in generalthemselves by creating new use values. Finally, there areproductive labourers who through the productive processgenerate surplus value which is used to sustain the incomesof all the other sectors.44

Dr. Timothy KerswellThe reason why consumption economies are interestingunits of analysis is that there can be only two theoreticalexplanations for why the majority of the productive forces inthese economies can be employed for the purposes ofconsumption. They are not mutually exclusive, but have farreaching political implications both in terms of the domesticpolitics of that particular economy, and in terms of the globalpolitical economy. In particular the question of the extent towhich workers have an identity of interest on a global scalewill determine the potential for unity against capital. For thepurposes of demonstration, it is possible to identify two idealsituations, noting that the reality is likely to be far morecomplex than this.The first situation is where a country has the majority ofits productive forces employed in the sphere of socialconsumption through the exploitation of a sector of thedomestic workforce. This hypothetical situation is one wherethe productive sector of the workforce is exploited to theextent that the surplus value produced through theexploitation of this sector is sufficient to firstly pay for thesocial consumption of the distribution and socialreproduction sectors. A society such as this would mostlikely feature a dual economy where workers due to specialconditions (such as being slaves or illegal workers) areexploited to a degree which is impossible under free marketconditions.The second situation is where a country has the majorityof its productive forces employed in the sphere of socialconsumption due to the appropriation of value from workersin other countries. Leaving aside the possibility of directplunder, the mechanics of which are simple to understand,trade and the multistage realization process are mechanismsthrough which a transfer of value from the productioneconomy to the consumption economy occurs.Shaikh and Tonak discuss a two-stage realization processby which a commodity passes through the phase ofproduction before being sold to the distribution sphere andthen sold for consumption at a final price. In their example,Shaikh and Tonak ask us to imagine a commodity with atotal value of $2000. In describing the process by which the45

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?commodity came to be produced and sold to the“distribution” sphere, Shaikh and Tonak describe how thesurplus value of production labour ends up beingtransferred to the distribution sector (Shaikh and Tonak,2007:46). First, the production price of the commodityincludes $400 of materials which went into production, aswell as $200 of wages and $400 in surplus value which isrealized upon the sale of this commodity to the distributionsphere. In addition to this, Shaikh and Tonak demonstratethat an extra $200 is spent on the constant capital of thewarehousing and retailing facilities, $400 in distributionworker wages and an extra $400 in surplus value realizedupon the final sale of the commodity at $2000.This additional surplus value originated, despite beingrealized at the site of consumption, was initially extractedfrom the production sector but hidden in the pricemechanism. The structural position of the retailer withinthe process of production and consumption gives the retailerthe ability to bring the commodity to sale on the market, andthus the ability to realize a certain portion of the surplusvalue inherent in the commodity. The point made by Shaikhand Tonak is that the actual surplus value extracted fromthe production sphere is $1400. Given the distributionsphere cannot create value, it is paid for out of theproduction sphere’s surplus value.Considering the global division of labour, this exampletakes on a particular relevance. Recalling the ideal typeproduction economies and consumption economies, if thetotal global social wealth generated by production was $2000as per the example of Shaikh and Tonak, and theconsumption economies receive $1400 of appropriatedsurplus value, then there are clear exploitative consequencesthat flow from the global division between productive andunproductive labour.4. ConclusionThe structural divisions outlined in this article are likelyto have a significant impact on the ability of productiveworkers and unproductive workers to maintain long term46

Dr. Timothy Kerswellpolitical alliances due to the objective misalignment of theirgoals. Instead, there is an apparent division in the ‘global’working class between the global North and the globalSouth.A case must also be answered as to why, within classanalysis, people with vastly different incomes and lifechances are treated as if they were the same. When moneyis capital, invested to employ people and make profit, it isthought of differently than if the same amount of moneyresults from an income far above the subsistence wage. Themere assertion of a pan-working class identity masks thematerial base of divisions within the working class. Classcan be a viable framework to understand global inequality,however, the portrayal of the working class as a homogenousbloc is unrealistic in the context of substantial inequalitybetween workers and global economic arrangements whichproduce these differences.ReferencesBach, G. (1966). Economics: An Introduction to Analysis and Policy.New York: Prentice-Hall.Benetti, C. (1976). Valeur et repartition. Grenoble.Benetti, C., Berthomieu, C. And Cartelier, J. (1975). Economie classiqueeconomie vulgaire. Grenoble.Buhle, Paul. (2001). The Myth of the Middle-Class Society. MonthlyReview. Vol 52, No 10.Eisner, R. (1988). Extended Accounts for National Income and Product.Journal of Economic Literature. Vol 26.Freeman, R. (2006). The Great Doubling. Available from:http://emlab.berkeley.edu/users/webfac/eichengreen/e183_sp07/great_doub.pdf [Online] Last accessed: 31 October 2010.Gerdes, C. (1977). The Fundamental Contradiction in the NeoclassicalTheory of Income Distribution. Review of Radical Political Economics.Vol 9, No 2.47

Class, Productive and Unproductive Labour: Divisions in the Global Working Class?Hardt, Michael and Negri, Antonio. (2000). Empire. Harvard UniversityPress: London.Harris, Nick. (2006). £676,000: The average salary of a Premiershipfootballer in 2006. The Independent (London). Available from:http://www.independent.co.uk/sport/football/news-and-comment/163676000-the-average-salary-of-a-premiership-footballer-in-2006-473659.html. [Online] Last accessed: 31 October 2010.Harvey, David. (2006). The Limits to Capital. Verso: LondonKendrick, J. (1970). A Brief History of National Income Accounts, inSills, D (ed.) The International Encyclopedia of the Social Sciences, VolII. New York: National Bureau of Economic Research.Korzeniewicz, Roberto., Stach, Angela., Patil, Vrushali., and Moran,Timothy. (2004). Measuring National Income: A Critical Assessment.Comparative Studies in Society and History. Vol 46, Iss 3.Marx, Karl and Engels, Friedrich. (2011). Manifesto of the CommunistParty. Available from:http://www.marxists.org/archive/marx/works/1848/communist-manifesto/[Online] Last accessed: 30 May 2011.Marx, Karl. (1973). Grundrisse. Penguin: Hammondsworth.Marx, Karl. (2011). Capital: A Critique of Political Economy, VolumeOne. Available from: http://www.marxists.org/archive/marx/works/1867-c1/ [Online] Last accessed: 31 October 2010.McKenzie, Richard. (1987). The Emergence of the Service Economy:Fact or Artifact? Cato Policy Analysis. No 93. Available from:http://www.cato.org/pubs/pas/pa093.html [Online] Last accessed: 31October 2010.Negri, A. (1973). 'Partito Operaio Contro il Lavoro', in S. Bologna et al.,eds., Crisi e Organnizzazione Operaia. Milan: Feltrinelli.Olin Wright, Erik. (2001). Foundations of Class Analysis in the MarxistTradition. Available from: http://www.ssc.wisc.edu/~wright/Foundc1.PDF[Online] Last accessed: 7 March 2010.48

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