EMEP

INTRODUCTION

The sources and increase of social wealth have been one of the most fundamental areas of interest since the birth of modern political economy. There had been debates on the source of value, surplus-value, profit or rent; on which type of work a new value can be created; issues such as which classes are economically productive, etc.

In economic literature, this discussion was continued on the basis of the distinction between productive and unproductive labour, at least after the mercantilists explained the surplus-value with a foreign trade surplus. The Physiocrats considered agricultural labour productive and defined the rest as unfruitful classes. Adam Smith, the founder of classical political economy, clearly separated productive and unproductive labour, expressed his sympathy for the manufacturing labour that produced profits for the capitalist, and his antipathy to the non-productive service labour employed in the mansions of the feudal aristocracy.

With the emergence of neo-classical economics in the second half of the 19th century, the debate on value and surplus value has been replaced by the productivity debate. Neo-classical economics have reduced value and surplus value to the utility created by various factors that participate in the production process, and considered all kinds of income-generating labour and activities in the market as productive.

Although it has been nearly a hundred and fifty years since its emergence and new elements have been added to it, the assumptions of the neo-classical approach form the basis of today’s dominant “mainstream” orthodox economics. Not only the mainstream but also various schools of critical heterodox economics suggest that the distinction between productive and unproductive labour is dysfunctional. According to these approaches, some new phenomena emerging in modern capitalism, such as the relative expansion of the financial field and the proliferation of digital technologies, have made this distinction invalidated or lose importance.

Karl Marx’s productive labour approach has arisen on the accumulated knowledge and legacy of classical political economy. Treating capitalist relations of production in its historicity, Marx benefited from the scientific heritage of classical political economists but at the same time dissociated himself from them. Marx’s approach to the issue remains important and relevant in explaining the new facts of contemporary capitalism as well as what it inherits from the past.

For many years, however, there was confusion about which activity Marx described as productive and unproductive. After the Second World War, the rapid expansion of employment in the public and service sectors, the increasing proportion of office jobs in employment fuelled the debate whether the activities of such businesses and professions were productive.^[1]

All this confusion was caused by the economic, political and social conditions of the period as well as by the late arrival of the Russian and English translations of the manuscripts which Marx comprehensively addressed and designed as the fourth volume of Capital, which was later titled Theories of Surplus-Value. The entire Russian edition was completed only in 1964 and the English in 1971. However, various erroneous approaches are often expressed with reference to Marx’s different passages in Capital and elsewhere.

In this article, the emergence, development, and key points of the distinction between productive and unproductive labour will be examined especially in the context of discussions in the eighteenth and early nineteen centuries. While noting the progress in the development of political economy, Marx’s contribution, methodical diversion and relevance will be emphasized separately.

MERCANTILISTS AND FOREIGN TRADE

Mercantilism is a concept that covers the economic policies that allowed capitalism to spread throughout Western Europe during the second half of the 16th century, but were heavily implemented in the 17th century after finding its true content. For the first time, it has been the source of practices that clearly expressed the goal of wealth and profit and legitimized it with the power of the state. As an economic policy, mercantilism enabled the provision of the conditions necessary for the continuation of commercial profits and wealth that came with colonialism.^[2]

The discovery and colonization of overseas territories led to a rapid expansion in trade volume from 16th century onwards. As a result of their commercial activity, traders gained control over agricultural production and primitive home industry and prospered rapidly. With the commodity production that developed in the same period, problems in the classical feudal structure increased, and the state finances were unable to meet the cost of aristocratic luxuries, wars and natural disasters. Therefore, monarchies, which were becoming increasingly centralized and approaching the form of a nation state, secured the profits and activities of traders in order to sustain the suppressed public finances.^[3] The defence of commercial interests played a central role in mercantilist thinking. Its key representatives, such as Thomas Mun, were also directors of colonial commercial companies such as the British East Indian Company.^[4]

The main problem that the economic policy focused on in the Mercantilist era was this: How to ensure the wealth of the state? Or “What is the source of wealth, that is, value, and how can this be increased?” The answer to this question was “by increasing the stock of gold and silver”. If the country does not have a gold mine, foreign trade is the best way to achieve it.^[5]

In the mercantilist texts, it can be seen that the income from foreign trade is considered as the only form of surplus-value, so it is considered as the only source of both accumulation and state income. Davenant, for example, said that domestic trade did not enrich the nation, but only transferred wealth from one hand to another, whereas foreign trade made a clear contribution to the country’s wealth. When he said “a clear addition to the country’s wealth”, Davenant meant the growth of surplus-value; just as physiocrats did when confronting the productivity of agriculture with the “infertility” of manufacturing.^[6]

In the mercantile system, the surplus-value is only relative; one loses what the other earns.^[7] The profits arising from the handover are actually the redistribution of wealth between different groups; there is no new value created. The fact that trade in its pure form would not create value, and that value cannot be a stock, has been confirmed by historical facts in the experiences of the Empires of Spain and Portugal, which implemented mercantilist policies and were left with a worthless pile in their hands. The question is what gives the precious metal its value.

Since the mercantile system relies on the form of absolute surplus-value, their critics, physiocrats, have sought to explain the absolute surplus-value, that is, the “net product”. Since the net product is still in their minds as a use-value, soil and agricultural labour is its sole creator.^[8]

THE PHYSIOCRATS AND THE GIFT OF NATURE

Physiocratic theory is one of the theoretical expressions of capitalist society, which began to dominate within feudal society. But the feudal shell of the system was still strong. For this reason, the physiocratic system was not born in England, where industry, trade and seafaring prevailed, but in France, where agriculture was predominant.^[9]

Just like the mercantilists, the physiocrats sought the source of wealth (surplus-value), but, unlike the mercantilists, they argued that it originated from production rather than exchange.^[10] They pointed at the right principle as they described productive labour as only the labour that produced the surplus-value. When the value of raw materials and other materials is given and the value of labour force is constant^[11], the surplus value is made possible by producing more than what the worker consumes. They moved the pointer from the field of circulation to the field of production, thus laying the foundation for the analysis of capitalist production.^[12]

Physiocrats criticized the illusion that the exchange of two commodities created the surplus value; however, they were limited by the level of capitalist development they were in. Ground rent was seen as the only natural surplus form in a society based on an industry with waged labour which was in its infancy, and small-scale production, where the privileges of the guild system continued despite being in a process of disintegration. Labour productivity was still very low, and the number of workers employed by a single capitalist was rarely high. Accordingly, it was difficult to think of a large profit by investing in the industry.^[13]

The difference between the value of labour power and the value it creates, i.e. surplus-value, is seen in agriculture in the clearest and most undeniable form among all sectors of production. The amount of use value^[14] created by the agricultural worker is greater than the use value it consumes. Thus, there is a surplus of use value left. If labour had produced as much use value as it needed, there would be nothing left.^[15] This is where physiocrats distinguish between other areas of production and agriculture: the productivity of the soil allows the labourer to produce more than they consume. In this context, the surplus-value is seen as “a gift of nature”. Agricultural labour serves as a tool that enables nature to realize its potential.^[16]

On the other hand, physiocracy increasingly saw the feudal landowner and peasant as capitalist and labourer respectively, so it regarded the surplus product as something produced by labourers. The surplus-value of nature/soil and the view of it as a surplus produced by the labourer existed side-by-side in a contradictory manner. Turgot, one of the physiocratic thinkers, experienced this contradiction and tried to overcome it:

“As soon as the farmer’s labour produces more than his needs, he can buy the labour of other members of society with the excess that nature gives him as a pure gift beyond his labour. Secondly, those who sell him his labour can only earn their living, but the farmer acquires an independent and usable wealth that he does not buy and sell beyond his livelihood. Therefore, those who sell their labour are the only source of wealth that stimulates all the labour of society with its cycle. That is because they are the only ones who produce labour above their wages.”^[17]

Turgot found that the agricultural worker produced a surplus “beyond his wages”. Since this excess is a tangible product, he considers it an additional value. Yet he understands the value of human labour not as a certain form of social existence, but as different types of material things (agricultural products). According to him, among all sectors of production, the surplus-value is undeniably produced only in agriculture. Agricultural labour is the only productive form of labour. The industrial worker cannot produce more than the value of his own livelihood objects; they cannot increase the material tally, they simply change its shape.^[18]

Physiocrats equated value with a concrete product, not the labour time required for the production of the commodity. Accordingly, the transformation of seed into a product provides physical growth, while industrial production consists of changing the form of raw materials. Therefore, for physiocrats, the only productive class in society is the labourers who work in agriculture.^[19] Craftsmen, industrial workers, traders and capital are all defined as unfruitful classes.^[20]

Two points can be noted that distinguish the views of physiocrats about the source of value and productive labour from the mercantilists and that underline their originality:

The first is that they did not see the source of value in the field of exchange but in the field of production, but only in agricultural production and agricultural labour due to the influence of the era they lived in.

The second is that they assumed the value only as a concrete, tangible product or use value.

CLASSICISTS AND PRODUCTIVE LABOUR

As a result of the impoverishment of agriculturalists and the rapid enrichment of manufacturers, and the spread of workshops and manufactures based on waged labour, it has become clearer that the source of capital accumulation and value is not in trade but in production (and increasingly in industrial production).

In his An Inquiry into the Nature and Causes of the Wealth of Nations which was published in 1776 and was considered as the work that launched the period of classical political economy, Adam Smith described the surplus value as the value that the worker added to the commodity. He adhered to the principle that the value is determined by the labour time spent in the production of the commodity. He has made it clear that profit and rent, which are concrete forms of surplus-value, are the result of the labour of the worker.

Smith, who sees surplus-value as the product of labour materialization, has succeeded in making a critical distinction in political economy terms: productive and unproductive labour. However, despite his pioneering discovery, Smith did not fully dispose of the influence of physiocratic theory. He has two types of productive labour definitions. The first is as follows:

“There is a kind of labour that adds value to the value of the object on which it is spent. There’s another one that does not have that effect. The first can be called productive labour, since it creates value; the other can be called non-productive labour. As a matter of fact, in general, the labour of an industrial worker adds value to the value of the instrument he is working with, the value of his own livelihood and the profits of his master. Yet, the labour of an ordinary maid adds value to nothing. (…) A man becomes rich by employing a lot of industrial workers; he becomes poor with a lot of servants.”^[21]

In his first description of productive labour, Smith emphasized a fundamental distinction: labour exchanged with capital (productive) and labour exchanged with income (unproductive). As a result of labour activity that produces commodities, by taking wages from a capitalist and in a way that increase their capital, the capital of the capitalist increases. However, the labour that receives wages from the same capitalist and does work in their household is not exchanged with capital. Again, it receives its wages from the capitalist, but this time not to produce commodities for him and to expand his capital, but to do their personal service it receives money from their income. Thus, the first type of labour develops the capital of the capitalist and creates a new value; the second type of labour receives a portion of the capital’s income as a fee in exchange for personal service and does not create a new value. While the capitalist who grows his business and employs more workers expands his fortune, the person who grows his house and employs more services shrinks his wealth. The critical point in Smith’s definition of productive labour is that productive labour enables direct capital accumulation.^[22]

That’s Smith’s first definition. The second definition is as follows:

“Only the labour of the industrial worker, after that labour is spent, takes root and materializes as a certain object or a saleable commodity that at least lasts for a while. It’s like it’s such a labour that it’s stored and put in a barn, which can be used at another time if necessary. That object, or the price of that object –all of which lead to a doo – can, if necessary, mobilize a labour as much as the labour that first produced it. On the contrary; the labour of the ordinary servant does not become materialized or rooted in any object or a commodity that is sold. Its services, in general, disappear as soon as it is done; they leave no trace or value that can be obtained in return for that amount of service.”^[23]

Smith thus described labour as productive in conditions where it is materialized in a concrete, tangible commodity, and when this does not happen, as unproductive. There is nothing wrong with Smith describing servants who exchange their labour with income in the category of unproductive labour. However, by reaching a false generalization from a correct example, it isolates all kinds of service labour from the capitalist relations it is in and describes it as unproductive labour on the grounds that it is not materialized in a concrete commodity. Smith criticized physiocrats, arguing that the physical surplus that physiocrats see as “the gift of nature” is not only in agriculture, but also in other sectors. However, its second definition suggests that Smith could not free himself of the approach of physiocratic theory, which equates the surplus-value with a concrete product (use value).^[24] One of the reasons for this is that in Smith’s age there was almost no service market. What distinguishes violin and music is that there is a violin market, but there is no music market yet.^[25] However, when they work to increase the capital of a boss, both a servant and a musician are productive labourers.

Described as the pinnacle of bourgeois political economy, David Ricardo, embraced Smith’s productive labour insight as it was, while breaking away from him at other points. Like Smith, he defined labour exchanged with capital as productive and income-exchanged labour as unproductive.^[26]

Thomas Robert Malthus steadfastly defended Smith’s distinction. It was necessary to understand the source of capital gains, thereby separating the labour that sustains and replaces the capital from the labour that does not have such quality.^[27] Malthus, however, did not see fit for some professions that provided significant benefits to use the phrase “unproductive labour” of Smith’s definition, instead he used the phrase ‘personal services’.^[28]

John Stuart Mill divided consumption into productive and unproductive, just like labour. Like Smith, he defined labour that did not take root in any object as unproductive labour, and treated it outside of social wealth.^[29]

Thus, three key characteristics of the productive labour approach of classical political economy, which advocates Smith and Smith’s distinction in general, can be noted:

First, it saw the surplus-value as the result of activity in the field of production like physiocrats, not in the field of circulation. It included industrial labour as part of productive labour, exceeding the approach of physiocrats that limits it to agricultural labour. It rejected the contradictory definition of physiocratic theory seeing surplus-value as a gift from nature and saw it as a result of the labour spent in the production of the commodity.

Secondly, by defining productive labour as labour that is exchanged with capital and unproductive labour as labour that is exchanged with income, it has taken a very important step in the analysis of capitalist economy politics.

Thirdly, despite this success, it evaluated the surplus value within the scope of some concrete forms of labour (agricultural and industrial) and of consequences of labour. It defined service labour, which does not produce a concrete commodity, as unproductive labour without considering the relations it is involved in or whether it is exchanged with capital, hence, it has not fully exceeded the limits of the physiocratic framework.

INTERVENTION BY MARX

The accumulation of capital, that is, the conversion of appropriated surplus-value into capital (or investment), is an inevitable necessity for the capitalist mode of production and individual capitalists. Capital has to be exchanged continuously with a certain category of labour that can produce surplus value for capital. Therefore, determining the category of labour is especially important to understand the accumulation process.^[30]

Marx defined productive labour in the most general sense as follows:

“What capital wants to produce as capital (and capitalist) is neither a direct use value for individual consumption, nor a commodity to be converted into money first and then use value. The purpose of capital is wealth accumulation, increase in value; therefore, it is the preservation of the old value and the creation of a surplus value. And capital succeeds in this specific product of the capitalist production process only by being exchanged with labour; therefore, this labour is called productive labour.”^[31]

The surplus-value, which is the “specific product of the capitalist production process”, arises only by the “exchange of capital with labour”, in other words, by employing the labour power in the service of capital. So, this original product is also the result of a unique relationship, the relation of production between capital and labour power.

Although it is a typical form of economic relationship in production and other areas of social life today, the complete rise of relationship between capital and labour was only in the late 18th century, with the invention of machinery and the spread of the factory system.^[32] For Marx, capitalism, unlike bourgeois political economy, is not a natural order but a historical formation, and this formation is in a constant state of change/motion. “Like all other concepts of Marxist economics, the concept of ‘productivity’ has a historical and social character”.^[33] Productive labour should also be understood as “historically temporary, that is, relative, not absolute”.^[34] Therefore, when the issue of productive labour with Marx’s perspective is discussed, it should be taken into account that productivity is mentioned only in the context of capitalist relations of production not any other kind of production. This historical approach is one of Marx’s starting points in separating productive labour in general with productive labour for the capitalist.

In general, productive labour has existed throughout history. For example, the person who produces jumpers in his home for his family is generally productive. The jumper he or she produces has a use value for family members. However, this jumper has no function in increasing the profits of the capitalist. In a textile workshop, if workers work longer and produce more jumpers, the capitalist appropriates more surplus-value, but if more jumpers are produced at home, children wear more jumpers, no surplus-value is produced. Therefore, although the labour of the person knitting jumpers at home is generally productive labour, it is not productive from a capitalist point of view. There are myriad of such activities in public life and they are with us at all moments. We can mention about labour activities that are beneficial and too many to count such as cooking at home, teaching a friend, shopping for groceries for your neighbour, cleaning your home, carrying furniture, but they are not productive for the capitalist. Since capital accumulation in capitalism in general depends not on productive labour but on productive labour for the capitalist, the bourgeois political economists and Marx dealt with this kind of productive labour, and sought the source and management of wealth in it.^[35]

Productive labour is the labour that produces surplus value. Marx expressed the issue of which labour produced surplus-value in different sections as well as certain sections in the three volumes of Capital, and in The Theories of Surplus Value (which Marx thought of as the fourth volume of Capital), especially in polemics with Adam Smith and the physiocrats. After highlighting his approach based on the historicity of capitalism and therefore productive labour, we can proceed to the details of Marx’s analysis of productive labour.

Commodity production

First of all, as seen in the case of the jumper knitted at home, the labour activity, which does not result in a commodity for the capital is not a productive activity, and the labour force working in this field is not productive in the capitalist sense.^[36]

We can mention the two most common forms. Women traditionally defined as “housewife” due to the different forms of patriarchal capitalist domination over them do a lot of housework throughout the day, but do not produce any commodities. Therefore, they are not productive labour for capital. However, thanks to their role in the reproduction of labour force with the domestic chores they do, they enable the capital to reduce labour costs and thus they exist as a free resource that capitalists benefit from.^[37]

Again, education, health and other public services that have not yet fully acquired a commodity form and that are (much as it remains) provided as public services are non-productive areas of public service. Unless they are sold, there can be no mention of commodity production in “public services”, and workers working there are also in the category of unproductive labour. As public services become more marketed, surplus-value is increasingly produced in these areas.

For example, health professionals working in a public hospitals (nurses, doctors, caregivers, cleaners, cooks, etc.) are unproductive in the capitalist sense.^[38] However, if the same medics resign and perform the same work in a private hospital, they become productive workers. It is worth remembering again that the productivity mentioned here is not about a social benefit or the nature of what is produced. Health service produced both in public hospital and private hospital is the same. In the private hospital, this service takes the form of a commodity and workers work for the capitalist in the health sector. As a result of this work, the capitalist appropriates the surplus value produced by the workers and therefore these workers are productive.

Marx gives the same example for teachers:

“A teacher who teaches others is not a productive worker. If he works for a wage alongside the entrepreneur who owns the educational institution, if he uses his labour to increase this entrepreneur’s money with other teachers, he is a productive worker.”^[39]

“Capitalist production is not merely the production of commodities, it is essentially the production of surplus-value… . If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer when, in addition to belabouring 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.”^[40]

Production based on waged labour

Secondly, workers who produce a commodity but do not produce commodities directly for capital are not productive in the capitalist sense. The peasant who owns small land can produce agricultural products without employing any labourers. The worker provides his/her own livelihood with this production and therefore does not make a direct contribution to the accumulation of capital since it does not produce a surplus-value for the capitalist. Therefore, he/she is not a productive worker.^[41]

There are a large number of groups of professionals that produce commodity in their own workplace or helps the distribution of commodity and are defined as “self-employed”. Dentists, physicians, psychologists, doctors, engineers, architects, software developers, tailors, cobblers, plumbers, painters, tile layers or car mechanics are unproductive workers who are not productive when they work in their own workplaces “for themselves” rather than for a capitalist. They generate income for themselves.^[42] However, when these labourers who are essentially petty bourgeois go bankrupt and work under a capitalist, they produce surplus value and become productive workers. Marx gives the following example:

“A writer is productive labourer not to the extent that he produces ideas, but to the extent that he enriches the publisher who publishes his work, or if he is a waged-worker for a capitalist. (…) The singer who sings like a bird is an unproductive worker. But he becomes a waged labourer or merchant at a rate at which he sells his song for money. But if the same singer works alongside an entrepreneur who makes him sing to make money, then he becomes a productive worker; because he generates capital directly.”^[43]

Waged Labour Employed by Capital

Thirdly, productive labour is defined by the activity of the labour force employed for capital. Unlike the labour exchanged with income, it is the labour exchanged with capital.

What does that mean?

While some of the labour force works for capital, others work for a fee in exchange for “personal services”. The worker employed as a maid in a house is an unproductive worker if she receives a wage from the landlord in exchange for her personal services. Here the purpose of the landlord is not to make a profit, but to buy the service/commodity “housework”. The employee’s wages are covered not from any capital but from the income of the landlord. As a result, the landlord does not get richer, his house is cleaned, his clothes are ironed, etc. His wealth does not increase as the number of servants he keeps increases, but rather he has a cleaner house but a less disposable income.

If the same maid cleans the same landlord’s house employed by a cleaning company, this time she gets paid not directly from the landlord and his income, but from the (changing) capital of the cleaning company. The company makes more profit by employing more service workers. Different from the first situation, the maid enters into an employment relationship with the capitalist, i.e. the capital. During the working period, she first produces a value equal to her own wages, then a surplus-value for the capitalist, and therefore she is a productive worker.

Labour employed in production and transportation

Fourthly, not all labour exchanged with capital (i.e. paid for by the capitalist investor) is productive either. Social reproduction has four stages: production, exchange, social maintenance and individual consumption. Surplus-value is produced only in the production process among these stages. Workers and other labourers employed in the areas of exchange and especially social maintenance undertaken by the state do not produce a new value, but play a role in the redivision and redistribution of the produced value. They earn their wages through the surplus value that has already been produced.

Marx formulates the general movement of capital as follows:

M -> C -> Production process-> C’ -> M’

(Money -> Commodity -> Production process -> Commodity’ -> Money’)

Capitalist buys the means of production and raw materials necessary for production with his or her money capital and buys the labour force for a certain period of time. Thus, the money capital (M) becomes a commodity capital (C). This is, in essence, buying something with money, i.e. simple commodity-exchange. No surplus value is produced by exchanging money and commodity between the seller and the capitalist. A new commodity (C’) is produced using means of production and raw materials with the labour force that serves the capitalist. The commodity that is manufactured is a different product from the raw material in the production process. In this process, the labour force enables the transfer of value of the machinery and raw materials into the product through the labour activity, produces a surplus-value (surplus-labour process) that the capitalist will appropriate, as well as the value to be paid to the worker as a wage (the necessary labour process). The produced commodity (C’) contains the surplus-value. The surplus-value is generated in the production process in which the commodities in the hands of the capitalist (means of production, raw material and labour force) turn into a commodity in the form of a product (C->C’). As a result, the capitalist has a batch of commodities (C’) containing a surplus-value as well as the value to cover the cost of production. By selling the commodities (C’->M’), the capitalist acquires the value that includes the surplus-value and can start the new cycle of capital. However, the fact that the capitalist has appropriated the surplus value in the form of money (M’) by selling the commodities leads to a misconception that the surplus value is the result of this sale. In fact, just like the capitalist buying raw materials and means of production (M-C), selling the commodities is a simple process of commercial exchange (C’-M’), which creates no surplus-value. However, it has a critical function: the generated surplus value is realized, that is, it falls into the hands of the capitalist in the form of money (in M).^[44]

As Marx noted, “Its two processes of circulation consist in its transformation from the commodity-form into that of money and from the money-form into that of commodities… During its time of circulation capital does not perform the functions of productive capital and therefore produces neither commodities nor surplus-value.”^[45]

What Marx means by circulation is the process of converting commodity to money, and he distinguishes this from other activities that are deemed as circulation but are an extension of the production process:

“Commercial capital, therefore – stripped of all heterogeneous functions, such as storing, expressing, transporting, distributing, retailing, which may be connected with it, and confined to its true function of buying in order to sell – creates neither value nor surplus-value, but acts as middleman in their realisation and thereby simultaneously in the actual exchange of commodities, i.e., in their transfer from hand to hand, in the social metabolism.”^[46]

Since the surplus value is not produced in the field of circulation and a share of the surplus-value obtained in the production process is received, the same applies to the workers working in the service of the commercial capitalist:

“We must make the same distinction between him and the wage-workers directly employed by industrial capital which exists between industrial capital and merchant’s capital, and thus between the industrial capitalist and the merchant. Since the merchant (…) produces neither value nor surplus-value (…) it follows that the mercantile workers employed by him in these same functions cannot directly create surplus-value for him.”^[47]

In this context, those working in the sale (exchange area) of commodities in the form of goods or services, in other words, employees working in stores are not productive. The same applies to the employees in the financial field, too.

So, according to Marx, productive labour encompasses the labour activity of workers employed by the capitalist in the industry, distribution-transportation^[48], storage and service production. Technical variables such as the profession of these workers, the product they produce, the conditions of their work are insignificant in terms of the productivity of the labour, the decisive thing is that the production relationship between labour force and capital –which internally hosts exploitation– has been established. Therefore, as Marx gives as examples in different occasions, the factory worker, cleaner, waitress, singer, teacher, engineer, doctor, miner, academic, author, etc. produce a surplus value when they enter into relations of production with capital. In Marx’s words:

“The material characteristics of labour and therefore its product, in itself, make no sense in terms of this distinction between productive labour and unproductive labour. For example, to the extent that the labour of a cook and a waiter is converted into capital for the hotel owner, they are productive labour. But the same people are unproductive workers as servants, to the extent that I did not create capital from their service, but spent my income on them.”^[49]

As can be understood from all these statements, the idea that Marx limited the production of value or productive labour only to industrial labour –which is a fairly common opinion– is an instance of misinformation about Marx. This argument is one of the admissions of bourgeois political economy and was the subject of extensive criticism by Marx. Surplus-value production and productivity in this sense are not related to a physical commodity but to the relationship of exploitation in the production process that forms the basis of the capitalist mode of production, and in this respect it is a product of social relations that bear class contradiction.

As a result, in terms of the history of economic thought, three main characteristics of Marx’s prolific conception of labour can be noted:

Firstly, Marx continued the tradition of physiocratic theory and bourgeois political economy, and saw surplus value as a result of labour activity in the field of production, not circulation, social reproduction or consumption.

Secondly, he accepted and maintained the distinction made by Adam Smith and bourgeois political economy, which defined productive labour as labour that is exchanged with capital.

Thirdly, he distanced himself from the approach that reduces the surplus value to a concrete commodity, object, and thus the use value, which existed in different forms in the physiocratic theory and bourgeois political economy. Thus, the surplus-value produced was explained consistently in the context of labour value theory, it ceased to be the physical commodity produced in this or that sector, and it was discussed in relationality and historicity as an exploitation relationship between labour force and capital.

CONCLUSION

The question of in which field the surplus value is produced has been one of the most important problems of political economy starting from its founders and before. Because the basis of the economic system and the guarantee for the welfare of the ruling classes depend on the production and appropriation of surplus value in class societies.

Physiocratic theory and classical economics have taken a critical step for the analysis of capitalism by moving the analysis of surplus-value from circulation to the production process. However, physiocrats restricted the surplus value, which they saw as a gift of nature, to agricultural labour and to a concrete product. On the other hand, the classical political economy, especially Smith, defined the production of surplus-value as labour that is exchanged with capital that goes beyond the concrete form of labour (agricultural labour), and took another important step in the analysis of capitalism with this definition of productive labour. However, Smith did not fully overcome the influence of the physiocratic approach, introducing a second definition to productive labour, limiting it to industrial labour, which produced only material/tangible commodities. He failed to develop an approach that would envisage and include the capitalization of rapidly developing service production in the later stages of capitalism.

Marx’s approach was shaped by the historical accumulation of knowledge of classical political economy. However, Marx’s analysis of capitalism and his approach to productive labour cannot be seen only as the purification of classical political economy from the contradictions of labour value theory. Freeing it from its inconsistencies, Marx developed the theory of surplus-value on this basis, finding its logical conclusion. However, this is not a simple completion or conclusion. This is a methodical rupture that puts historicity and integrity/relationality at the centre of its analysis with its contradictions and conflicts.

In this context, Marx treated capitalism and productive labour for the capitalist not as elements of a natural order, but as a historicity that it was shaped in and open to change and transformation. He has transcended the monolithic analysis by physiocratic theory and classical economics, which defined productive labour with agricultural labour or industrial labour that produced a concrete commodity. He discovered the quality of labour that goes beyond concrete forms in capitalist production relations and defined the surplus-value on the basis of production relations, which are the result of the exchange between capital and labour force.

Marx’s dialectic method and especially his productive labour approach provide a great opportunity to understand the economic and political developments in today’s world and the general trends and orientations of current capitalism.

With its inevitable need to accumulate and its expansionist nature, the capital entering areas that have managed to stay out of the market for hundreds of years and transforming them on a capitalist basis, causes the working class to expand with participation from different professional layers and social classes. Thus, the category of productive labour is expanding with the opening of new industrial, service and information production areas (linked to industry or service production), but the unproductive labour population is also increasing with the expansion of marketing, sales, finance, real estate, etc. Marx’s category of productive labour remains important in understanding the ongoing productivity crisis, falling profit rates, the increase in financial activities, the intense pressure to commoditize and privatize non-market areas, and other current economic developments despite the huge technological developments of the last 20 years.

1. In this period, the debate on productive labour was linked to class analysis of growing social “layers”. “Neo-Marxist” defined the working class as the only productive category. The state’s high-level bureaucracy and public workers were described as the new small bourgeoisie, indistinguishable and unproductive. When office workers and university graduate workers numbering in the millions were added to this, most of the employment in developed capitalist countries (70% to 80%) was characterized as the new and old little bourgeoisie. So the bourgeois “middle-class society” claim “ground” was accepted with a “leftist” caveat. From this approach, the Euro-communists extracted the task to ensure the alliance between the (shrinking) working class and the expanding middle classes. ↑
2. Gencoglu, A. Y. (2013) ) “Ticari Kapitalizmden Sanayi Kapitalizmine: Merkantilizm, Liberalizm ve Marksizm”, Toplum Bilimleri Dergisi (“From Commercial Capitalism to Industrial Capitalism: Mercantilism, Liberalism and Marxism”, Journal of Social Sciences) 7(14): 79-94, p. 81 ↑
3. British feudal landowners and kings, who were put in difficulty as a result of the fall in land prices, war and economic crises, have had to borrow from merchants many times. For more information, see Dobb, M. (2007) Reviews on the Development of Capitalism: Transitional Discussions, transl. F. Akar, Document Publications, Istanbul, p. 168-179 ↑
4. Kazgan, G. (1993) İktisadi Düşünce veya Politik İktisadın Evrimi (Economic Thought or The Evolution of Political Economics), Remzi Kitabevi, Istanbul, p. 29 ↑
5. Karahanogulları, Y. (2009) Marx’ın Değeri Ölçülebilir mi?: 1988-2006 Türkiye’si İçin Ampirik Bir İnceleme (Is Marx’s Value Measurable?: An Empirical Review for 1988-2006 Turkey), Yordam Kitap, Istanbul, p. 34 ↑
6. Dobb, Studies in the Development of Capitalism, p. 189 ↑
7. Engels, F. (2003) Anti-Duhring, translated by K. Somer, Sol Publications, Ankara, p. 297 ↑
8. Marx, K. (1998) Plus-Value Theories: Volume One, translated by Y. Fincanci, Sol Publications, Ankara, p. 59 ↑
9. Marx, Theories of Surplus Value: Volume One, p. 43 ↑
10. Kazgan, İktisadi Düşünce veya Politik İktisadın Evrimi (Economic Thought or The Evolution of Political Economics), p. 56 ↑
11. Physiocratic theory has determined the value of labour force as a fixed/given size in order to analyze capitalist production and analyze excess value. For this reason, the minimum wage has formed the main pillar of the physiocratic theory (Marx, Theories of Surplus Value: Volume One, p. 38) ↑
12. In Marx’s words “Within the confines of the bourgeois milieus, the honour of having analyzed capital belongs mainly to the physiocrats, which is what makes them the true father of modern political economy.” (Marx, Theories of Surplus Value: Volume One, p. 39) ↑
13. Dobb, Studies in the Development of Capitalism, p. 180 ↑
14. Unlike the exchange value, the usage value is the value that indicates the usefulness of the commodity in terms of usage and only occurs during the consumption process. ↑
15. Marx, Theories of Surplus Value: Volume One, p. 43-44 ↑
16. Howel, P. (1975) “Once Again on Productive and Unproductive Labour”, Revolutionary Communist, https://www.marxists.org/subject/economy/authors/howell/produnprod.htm, p. 47, downloaded: March 10, 2020 ↑
17. Turgot, A. R. J. (1898) Reflections on The Formation and the Distribution of Rich, Macmillan, New York, p. 9 ↑
18. Marx, Theories of Surplus Value: Volume One, p. 39 ↑
19. Turanli, R. (2000) İktisadi Düşünce Tarihi (History of Economic Thought), Bilim Teknik Yayınları, Istanbul, p. 59 ↑
20. Kazgan, İktisadi Düşünce veya Politik İktisadın Evrimi (Economic Thought or The Evolution of Political Economy), p. 57 ↑
21. Smith, Wealth of Nations, p. 357-358 ↑
22. Hunt, E. K. (2005) History of Economic Thought, translated by M. Gunay, Dost Publications, Ankara, p. 94 ↑
23. Smith, Wealth of Nations, p. 358 ↑
24. Karahanogulları, Y. (2008) “Productive Labour”, Baskaya, F. and A. Duck (der.), Dictionary of Economic Institutions and Concepts: A Critical Introduction, Yordam Kitap, Istanbul, 1257-1270, p. 1263 ↑
25. Karakoç, O. (1990) “On Productive Labor-Unproductive Labour Separation: A. Smith and K. Marx”, Unpublished Seminar Study, İstanbul, p. 7-8 ↑
26. Altok, M. (2011) “An assessment of the distinction between productive and unproductive labor: Adam Smith’s ‘labour’ or Karl Marx’s ‘value’?”, C.U. Journal of Economics and Administrative Sciences, 12(1): 107-127, p. 117 ↑
27. Karakoç, O. (1990) “On Productive Labor-Unproductive Labour Separation: A. Smith and K. Marx”, Unpublished Seminar Study, İstanbul, p. 7-8 ↑
28. Çaklı, S. (2006) “Productive Labour-Unproductive Labour Discrimination in Classical School”, Abant Izzet Baysal University Journal of Social Sciences, 12: 41-60, p. 55 ↑
29. Mill, J. S. (1976) Principles of Political Economy, Augtus M. Kelley, Fairfield, p. 47 ↑
30. Yilmaz, G. (2006) “Service Labour and Marxist Value Theory”. Yilmaz, D., F. Akyuz, F. Ercan, K. R. Yilmaz, T. Toren, U. Akcay (der.), Understanding Capitalism: Makers Sing the Song-I in Dipnot Kitap, Ankara, p. 292-3 ↑
31. Marx, Theories of Surplus Value: Volume One, p. 374 ↑
32. Capitalist production depends on the masses of labourers who have their own production tools, such as peasants or artisans turning into proletarians by taking away the means of production from them; It is based on the fact that the worker who has freed himself from his feudal ties presenting his labour force as a “free labourer” to the service of the capital that controls the means of production. In the feudal society, where almost 90 per cent of the population relied on the soil and the feudal lord, the production relations between the workers and the capital were quite limited. ↑
33. Karakoc Transfers from Rubin, On Productive Labour-Unproductive Labour Separation, p. 20 ↑
34. Marx, K. (1999b) The Misery of Philosophy, Transl. A. Kardam, Sol Publications, Ankara, p. 104-105 ↑
35. Marx, 1997, p. 484 ↑
36. The tendency of capital and powers to commoditize all areas of social life is, in a way, related to this. ↑
37. It is a phenomenon that capital benefits from free domestic women’s labour, reduces labour costs and thus increases its profits. But the capital aims for women to enter the market as cheap labour force, to participate directly in the capitalist exploitation network with flexible working methods by deeming this critical and in a way indirect contribution insufficient. Important steps such as a lot of legal arrangements have been taken in this direction. ↑
38. Today, with contribution fee, revolving capital, public-private partnership, city hospitals in the field of health sustained results in “public” hospitals increasingly being opened to the market. As we approach this transformational scale and capital model, the workers become productive workers. ↑
39. Marx, Results of direct production process, p. 112 ↑
40. Marx, Capital: Volume One, p. 484 ↑
41. To bind small peasants to capitalist agricultural monopolies for a long time “contract manufacturing” and various forms of relationships are developing. This can be interpreted as the proletarisation of peasants and as a process of turning them into productive labour in the capitalist sense. ↑
42. If they accumulate this income and turn it into new investments and employ other workers, they become capitalists. However, unless they employ other workers, the money they have does not turn into capital, it remains in the form of income. ↑
43. Marx, Theories of Surplus Value: Volume One, p. 148 ↑
44. For example, when a block of flats is built, there are both production costs and surplus-value within the value of the building. When a flat in this block is sold, the construction company realizes this surplus-value and puts it in its cash box. The owners of the same flat can change ten times in a year. Thus, the trade volume increases by 10 times. However, these changes of the owners do not create any additional value in the country’s economy, this is a change of owners of the existing manufactured value and there is no increase in value in total. ↑
45. Marx, K. (2004) Capital: Volume Two, trans. by A. Bilgi, Eris Publications, Ankara, https://www.marxists.org/turkce/m-e/kapital/kapital2.pdf, p. 113 ↑
46. Marx, Capital: Volume Three, p. 249 ↑
47. Marx, Capital: Volume Three, p. 258 ↑
48. “Production” of spatial displacement as part of the production of commodity. ↑
49. Marx, Theories of Surplus Value: Volume One, p. 148 ↑