Unproductive Labour and the Rate of Profit in Australia, 1966/67–1991/92

Abstract

In this chapter I consider how the categories of productive and unproductive labour in the labour theory of value can be used in empirical work. The labour theory of value is understood within the framework proposed independently by Foley (1982, 1983, 1986) and Duménil (1983-84, 1984), and surveyed in Mohun (1994). It is an aggregate theory, asserting that the labour time worked by productive labour is the source of all money value-added; that the value of money links the wage rate per hour and the value of labour power per hour of labour hired; and that aggregate profits are an exact representation of aggregate surplus value. These propositions remain valid whatever prices happen to be. Hence it is not assumed in this interpretation that embodied labour ratios determine price ratios, nor that the rate of profit is equalized. No assumption is made about the formation of individual prices, and hence there is no need of any specification of how one assumption of price formation (proportionality to labour time) is ‘transformed’ into another (proportionality to total capital advanced).