An 'unproductive labour' view of finance

Abstract

The present paper discusses the role of the financial sector in a capitalist economy, arguing that the huge increase in its weight (economic and otherwise) in the last decades is not justified by the importance of its contribution to economic growth. The point is developed going back to the classical concepts of productive and unproductive labour. There are two dimensions of these concepts that we discuss. The first links the social efficiency of the financial sector to its role in the reproduction process, crucially distinguishing basic from non-basic uses. We argue that many financial services usually seen as services to production really consist of the provision of gambling facilities, and thereby have to be considered at best as luxury goods. When evaluated according to its reproductive capability, the service of arranging a gambling house cannot be seen as producing social value. A second sense in which the discussion of productive and unproductive labour casts light on the nature of some financial services is that connected to the conception of pure circulation costs, as different from costs of production proper. The amount of circulation costs varies with the varying intensity of the realisation problem. They are not defined by the production technique and are, in this sense, arbitrary.