A NOTE ON THE SHORT‐RUN “PRODUCTIVENESS” OF LABOR SERVICES
Since the time of Adam Smith, classical and Marxist economists have made a distinction between productive and unproductive labor. According to Smith, productive is that “labour which adds to the value of the subject upon which it is bestowed” (Smith, 1937, 314).
Unproductive Labor and the Contradictory Movement of the Rate of Profit: A Comment on Moseley
This paper criticizes Moseley's claim that the cause in the fall in the conventional rate of profit in the postwar U.S. is due to the rise in unproductive labor over this period. I argue that Moseley employs a one-sided and static conception of unproductive labor. Unproductive labor is seen by Moseley to be simply a drag on surplus value production. In contrast, I argue that unproductive labor should be understood as both a drag and as an enhancement for the dynamic production of surplus value. I show in a model of the distribution of surplus value how the redistribution of unproductive labor can have contradictory effects on the value rate of profit.
The Decline of the Rate of Profit in the Postwar U.S. Economy: An Alternative Marxian Explanation
This paper presents an explanation of the decline of the rate of profit in the postwar U.S. economy which is based on Marx's distinction between productive labor and unproductive labor. According to this theory, the conventional rate of profit depends on the rate of surplus-value, the composition of capital, and the ratio of unproductive labor to productive labor. Estimates of these variables are presented which suggest that the main cause of the decline of the rate of profit was a very significant increase in the ratio of unproductive labor to productive labor. This explanation is contrasted with the "profit squeeze" explanations presented by Weisskopf and Wolff, and a post-period empirical test is conducted to evaluate the relative predictive ability of these competing explanations. The results of this test suggest that the alternative Marxian explanation presented here is the most consistent with the absence of a significant increase in the rate of profit in the past decade.