Abstract
The main focus of this chapter is on official national income accounts (NIA) and their differences from those of the classical political economy (CPE). The differences are the result of the distinction of economic activities in production and non-production, which exists in the classical analysis and not in the neoclassical one, on which the official NIA are based. We further argue that the CPE distinction is similar to that followed in good business practices and accounting of production businesses. Thus, by applying the CPE distinction of production and non-production activities, we may derive entirely different results from those of the neoclassical NIA.
The worker, therefore, justifiably regards the development of the productive power of his own labour as hostile to himself; the capitalist, on the other hand, always treats him as an element to be eliminated from production. These are the contradictions with which Ricardo struggles in this chapter (XXXII). What he forgets to emphasize is the constantly growing number of the middle classes, those who stand between the workman on the one hand and the capitalist and landlord on the other. The middle classes maintain themselves to an ever-increasing extent directly out of revenue, they are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand.
Karl Marx (TSV ΙΙ, p. 573).
Mr. Bastiat could have found convincing testimony that a mass of parasitic bodies come to cluster around capital, and, under one or another title, they lay hands on so much of the total production as to leave little danger of the workers being overwhelmed by abundance.
Karl Marx (Grundrisse, p. 757).
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Notes
- 1.
We use the term ‘unproductive’ labour because this is how it has been established in the literature. The more appropriate classification with the negative connotation term would be ‘non-production’ or with the positive connotation, as we will explain below, ‘distribution’ and ‘social maintenance’ labour activity.
- 2.
On the basis of the same logic, this categorization does not refer to whether an activity will continue or disappear into a socialist economy. Baran and Sweezy (1966) argued that many activities such as advertising, marketing and the like which are indispensable to capitalism will vanish in a rationally organized, that is, socialist economy as unnecessary and therefore as a pure waste of resources.
- 3.
For example, Bullock (1973) defined as productive the labour employed in the production of ‘basic or reproductive goods’, that is, commodities that are used as means of production (investment goods) and consumption goods, and as unproductive the labour producing commodities that are not used as inputs in the production process, that is, luxury and military goods.
- 4.
This view was mainly put forward by Marxist sociologists, such as Poulantzas (1975, p. 213), who argued that the working class consists mainly of productive workers, while all other workers, since they are supported by the surplus-value produced, are in a way more in alliance with the capitalist rather than the working class. This view has neither the theoretical nor historical backing since workers in the circulation and social maintenance activities may be super-exploited.
- 5.
We assume that each sector is characterized entirely by capitalist production relations.
- 6.
Homeowners are considered to rent their dwelling to themselves by paying (imputed) rents that increase artificially the total income and output of the economy.
- 7.
In NIA, the contribution of the public sector to GDP is equal to the wages of its employees. However, these wages are paid out of taxes (on output and private incomes) and therefore have been already recorded in the measurement GDP. Thus, caution should be applied in order to avoid double counting.
- 8.
For convenience purposes we use capital letters for the flow variables.
- 9.
For a more detailed presentation of the transformation of the orthodox NIA into classical ones, see Shaikh and Tonak (1994).
- 10.
The major difference between goods and services is the time of consumption. Services are ‘consumed’ at the same time that they are produced and goods at a time other than that of their production.
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Tsoulfidis, L., Tsaliki, P. (2019). Productive-Non-productive Labour and National Accounts. In: Classical Political Economics and Modern Capitalism. Springer, Cham. https://doi.org/10.1007/978-3-030-17967-0_9
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