This paper integrates unproductive activity into a Marxist growth model based on Marx’s reproduction schemes. Labor extraction and technological change are related to the production and distribution of surplus and thus are endogenous. Unproductive labor is shown to have potentially contradictory effects. It can squeeze profits and reduce growth or increase work intensity and develop productivity enhancing technological change, which increase profitability and growth. Empirical evidence indicates that both effects occurred in the postwar United States. Marx’s reproduction schemes are also shown to rely on a classical growth dynamic in which the profit and savings rates determine the rate of growth.
BaranP.SweezyP.1966. Monopoly capital. New York and London: Monthly Review Press.
2.
BaumolW.1967. Macroeconomics of unbalanced growth: The anatomy of the urban crisis. The American Economic Review57 (3): 415-26.
3.
BowlesS.1985. The production process in a competitive economy: Walrasian, neo-Hobbesian, and Marxian models. The American Economic Review75 (1): 16-36.
4.
BravermanH.1974. Labor and monopoly capital. New York and London: Monthly Review Press.
5.
DuttA.1991. Unproductive activity and stagnation: A neo-Marxian model. Review of Radical Political Economics23 (1 & 2): 95-103.
6.
FoleyD.1986. Understanding capital. Cambridge and London: Harvard University Press.
7.
GillmanJ.1958. The falling rate of profit. New York: Cameron Associates.
8.
GordonD.1996. Fat and mean. New York: Martin Kessler Books.
9.
HarrisD. J.1972. On Marx’s scheme of reproduction and accumulation. The Journal of Political Economy80 (3): 505-522.
10.
HowardM.KingJ.1988. The political economy of Marx, 2nd ed.New York: New York University Press.
11.
MarglinS.1974. What do bosses do. Review of Radical Political Economics6 (2): 60-112.
12.
MarxK.1967a. Capital, vol. one. New York and Moscow: International Publishers.
13.
MarxK.1967b. Capital, vol. two. New York and Moscow: International Publishers.
14.
MarxK.1967c. Capital, vol. three. New York and Moscow: International Publishers.
15.
MarxK.1969. Theories of surplus value, part I. London: Lawrence and Wishart.
16.
MarxK.1972. Theories of surplus value, part III. London: Lawrence and Wishart.
17.
MohunS.2005. On measuring the wealth of nations: The US economy, 1964–2001. Cambridge Journal of Economics29: 799–815.
18.
MorishimaM.1973. Marx’s economics: A dual theory of value and growth. Cambridge and New York: Cambridge University Press.
19.
MoseleyF.1988. The increase of unproductive labor in the postwar U.S. economy. Review of Radical Political Economics20 (2&3): 100–106.
20.
MoseleyF.1991. The falling rate of profit in the postwar United States economy. New York: St. Martin’s Press.
21.
ResnickS. A.WolffR. D.1987. Knowledge and class. Chicago: The University of Chicago Press.
22.
ShaikhA. M.TonakE. A.1994. Measuring the wealth of nations: The political economy of national accounts. Cambridge and New York: Cambridge University Press.
23.
U.S. Department of Labor, Bureau of Labor Statistics. Construction of average weekly hours for supervisory and nonproduction wage and salary workers in detailed industries. Washington, DC: Bureau of Labor Statistics. Available at: http://www.bls.gov/lpc/iprswawhtechnote.pdf (accessed November 10, 2009).
24.
WolffE.1987. Growth, accumulation, and unproductive activity. Cambridge and New York: Cambridge University Press.
