>Unproductive labor is in fact useful to capital (a main reason why its
>growth has happened), in part because it aids in the realization of surplus
>value, given the insufficiency of profitable investment outlets relative to
>the potential size of s. It is useful and creates nettlesome contradictions
>at the same time.
Roger has mentioned James F Becker's Marxian Political Economy--an outline (cambridge, 1977). I had known of Becker's work because of John Weeks' effusive praise of him, Paul Sweezy and Paul Mattick in his *Capital and Exploitation*.
I am wondering if the nettlesome contradictions laid out by Becker is what Roger had in mind.
Drawing on Shane Mage's classic dissertation, James F Becker writes:
"The expanding ciruculatory system is composed of unproductive labor, living an dcongealed, and the relative growth of this labor *diminishes rather than augments* the surplus...[A] given rate of unproductive consumption pulls the real rate of accumulation below its feasible maximum: an increase in the rate further reduces that rate of accumulation. To be sure, the accumulation of circulatory capitals may stimulate a rise in aggregate demand, in this helping to reduce the 'deflationary gap', as the Keynesians refer to it. But the accumuolation of unproductive labor, and the growth of unproductive consumption, helps to solve ther elaization problem from two directions, and not merely by the stimulus it gives to aggregate demand. At the same time that unproductive investment raises aggregate demand in proportion to its own growth, it lowers the real rate of grwoth of the system. It reduces there increase of demand required to close the deflationary gap and solves the realisation problem. In other words, the problem of the deficiency in aggregate demand tends to dsapear with the capitalist solution of the realisation problem, with the accumulation of unproducitve labor, that is, the allocation of social capitals into circulatory activity on an extending scale. Th esolution of this problem, however gives to others aat least as serious. First of all, it tends to economic stagnation, and this *reinforces* the tendency of the general rate of profit to fall. Secondly, by by retarding the grwoth rate, it gives to a higher rate of secular unemployment as the population and labor continue to grow. Finally it occasions the plague of inflation. All of these are best seen, not as a response to a new law of rising surplus, but as a new response to the old tendency for the general rate of profit to fall." p. 238
rnb