‘Full Employment’ and Profits: An introduction

by Jehu

CTW-SpeakoutForGoodJobs-2coThis new paper, by Hornstein, Kudlyak and Lange, shows how simpletons are trying to minimize unemployment by constructing a new measure of what they call “resource utilization in the labor market”. The message of the paper seems to be clear: If you have no hope of ever recovering employment to pre-2008 crisis levels, explain it away with statistics.

When discussing unemployment, the bourgeois simpletons like to begin with definitions, not reality. The discussion of who is in the labor force and who is not almost always begins with defining what is meant by “in the labor force”. The Bureau of Labor Statistics maintains a bewildering array of definitions and sub-segments of unemployment.

Most of this useless data aims not to quantify the labor force, but to remove population segments from the labor force that appear beyond ever finding a place in productive employment. This allows the fascist state to reduce the number of individuals for whom it must actually create jobs as is expected by ordinary citizens.

Since the Great Depression it has been a tenet of the fascist faith that the state is responsible for finding work for everyone who needs it. However, since the depression of the 1970s, it has been obvious that this is an expensive effort that threatens the economy with hyperinflation.

In response to the costs associated with finding everyone a job who wants one, the fascist state has attempted instead to progressively narrow the definition of unemployed. The fewer people meeting the criteria for unemployed, the less difficult and expensive the problem of “full employment”.

In this regard, it is absolutely necessary that the numbers of individuals defined as “outside the labor force” steadily increase. This is because, as labor theory explains, the development of the productive forces drives ever larger numbers of individuals into the surplus population.

According to Marx, the falling rate of profit produces excess capital at one pole and a surplus population at the other. Although the conflict over who is in the labor force and who is not appears merely politically driven by “fiscal conservatives”   who oppose “government intervention into the free market economy”, there is an underlying material logic to it.

It is widely assumed that everyone with a job is productively employed, but this is not so. When labor theory talks about productive employment it is only talking about employment that produces value, not use values. An aircraft carrier, for instance, might be a use value for the fascist state, but it does not contain a single jot of value. The labor performed in the home also has use value, but not a single bit of value. The fascist state is not concerned about employment in general, but only the employment that produces value.

Thus. if the labor force could be thought of as composed of two segments — one that is productive in the above sense,   and the other that is unproductive in the above sense — the fascist state is only concerned with the first segment. And when the simpleton economists speak of “labor market slack” they are only referring to slack in the portion of the labor force that is employed productively. The aim of fascist state policy is to have this segment as large as possible and working as long as possible to produce value.

Why would this be true?

The reason is that, according to labor theory, the mass of surplus value produced is a function of  the mass of the total labor power productively employed and the duration of the labor time of this productively employed population.

To give an example: 100 productively employed workers working 8 hours will produce more value than 50 productively employed workers working 6 hours. To maximize the value produced, the fascist state seeks to maximize the number of workers employed and the length of their working day.

However, this is only true of workers employed productively; it is not true of all workers employed. The workers who are employed unproductively produce no value, no matter how large their numbers or how long the duration of their labor.

This raises a further question:  Why not just fire everyone who is not employed productively and keep the productive workers?

Aside from the political repercussions of doing this, there are several answers: First, there is no way to tell the productive workers from the unproductive ones. Everyone would agree a steel worker is productive, and a Navy sailor is not, but then you get the steel worker who produces steel for the ship employed by the Navy sailor. If the sailor is unproductive, the steel that went into her ship is unproductive as well.

Second, unproductive labor clearly is not productive in its own instance,  but by consuming the excess capital in the economy it makes longer hours of productive labor possible. Again, in the case of the sailor and the steelworker: the sailor’s unproductive consumption of the output of the steelworker, allows longer hours of labor for the steelworker and thus more surplus value produced.

Even if labor is not productive in its own right, it may subsidize productive labor by unproductively consuming its output. The aim of employment policy is not to reduce unemployment nor is it to reduce unproductive employment. Rather, the aim is to maximize profit.

The first step in maximizing surplus value (profit) is to ensure the productively employed labor force is working as long hours as possible within legal limits.

To give an example: Two workers working four hours each a day cannot produce as much surplus value as one worker working eight hours a day. While both may be equivalent in terms of material wealth that can be produced in the total labor time of eight hours, only the single worker working for eight full hours maximizes “social” wealth, i.e., surplus value.

However since the productively employed workers working a full eight hours are producing a surplus over their own requirements, some definite amount of  unproductive consumption is necessary. (How this is accomplished is not the concern here for the moment.)

To (perhaps) oversimplify things a bit: If a worker in eight hours can produce sufficient means of subsistence for two workers, an additional worker must be employed to consume this additional means unproductively. Thus the surplus produced by the steelworker makes possible the unproductive labor of the sailor. (Again, this is a highly simplified example and should not be taken literally.)

When trying to create an index of “slack in the labor force”, the authors of this paper are dealing with a simple problem made  complicated by the fact that employment is by no means the aim of the policy. The real aim of the paper is how to maximize the production of surplus value,  but this aim is presented in the form of the question:

“How can we measure ‘full employment’.”

“Full employment” as defined by the authors is simply that level of employment of labor power that is consistent with maximization of profits.

Advertisements