Growth, Accumulation, and Unproductive Activity: An Analysis of the Postwar US Economy

214 Pages·1986·5.23 MB·English

by  Edward N. Wolff

Growth, accumulation, and unproductive activity

Growth, accumulation,
and unproductive activity
An analysis of the postwar U.S. economy
EDWARD N. WOLFF
New York University
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First published 1987
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Library of Congress Cataloguing in Publication data
Wolff, Edward N.
Growth, accumulation, and unproductive activity.
Bibliography: p.
1. United States - Economic conditions - 1945-
2. Capitalism - United States. 3. Labor supply - United
States. I. Title.
HC106.5.W58 1987 330.973'092 86-8260
ISBN-13 978-0-521-25151-8 hardback
ISBN-10 0-521-25151-6 hardback
ISBN-13 978-0-521-03475-3 paperback
ISBN-10 0-521-03475-2 paperback
To JANE
for her support and encouragement

Contents
Preface page ix
1 Introduction 1
A Four elements of the economic system 2
1 Absorption of economic surplus 2
2 Unproductive activity 4
3 Accumulation 6
4 Productivity growth 7
5 The logic in brief 8
B Unproductive activity in postwar U.S. economy 10
C Effects of unproductive activity on labor absorption
and productivity growth 13
D Implications for capital formation 18
E Unproductive activity and its effect on well-being 20
F A comparison with Baran and Sweezy 21
G Plan of this book 23
2 Unproductive activity in a capitalist society 25
A Historical background 25
1 Nature and reproduction 25
2 Circulation and reproduction 29
3 Capital and reproduction 32
4 Unproductive labor and advanced capitalism 36
B Classification of unproductive labor by industry 41
C Classification of unproductive labor by occupation 50
3 A Marxian accounting framework 56
A Initial modifications 57
1 Depreciation 58
2 Imports 59
3 Value added and final output 60
B Partition into productive and unproductive
components 64
C Surplus accounting with unproductive activity 68
D Measurement of surplus value 79
4 A growth model of accumulation and unproductive labor 86
A Basic assumptions of model 87
vii
viii Contents
B Solution of model 91
C Comparison with one-sector Solow model 101
D Conclusions 102
5 Rise of unproductive activity in postwar economy 104
A Time trends in unproductive activity by sectoral
classification 104
B Time trends in unproductive labor by occupational
category 108
C Cyclical movements in composition of final product 112
D Growth rate of final output components 116
E Composition of surplus product 118
F Conclusion 119
6 Absorption of labor and capital and rate of surplus value 121
A Absorption of labor in final output 123
B Productivity growth, unproductive labor absorption,
and labor content of final output 127
C Rate of surplus value and absorption of surplus labor
time 132
D Allocation of capital stock 136
7 Absorption of new resources and growth in real income 141
A Relative movements in labor absorption 144
B Distribution of newly added surplus labor time 145
C Distribution of newly added variable capital 152
D Distribution of newly added labor value 155
E Distribution of newly created capital stock 158
F Growth in real income 160
8 Conclusions and speculations 164
A Review of evidence 164
B Labor absorption and average living standards 169
C Peculiar logic of capitalism 172
D Private scarcity/social waste 177
Appendix: Data sources and methods 180
A Commodity flow tables 180
B Labor coefficients 186
C Capital stock and depreciation 186
D Sectoral price deflators 188
E Personal taxes 189
F Occupation-by-industry matrices 189
References 193
Index 197
Preface
This manuscript ties together and extends the work contained in five
of my earlier papers. In 1971, I began working on the problem of con-
cretizing and estimating basic Marxian value categories such as labor
value, the rate of surplus value, and the organic composition through
the use of input-output data. At that time, the two important theoretical
contributions in the field were Francis Seton's "The transformation
problem," published in the Review of Economic Studies in June 1957,
and Michio Morishima and Francis Seton's "Aggregation in Leontief
matrices and the labour theory of values," published in Econometrica
in April 1961. During the course of my investigation, another major
contribution to the theoretical literature appeared, Morishima's Marx's
Economics in 1973. Between these three important theoretical works
and the actual estimation of Marxian categories lay many unanswered
accounting and other methodological issues.
In the early 1970s, I was working on a project developing two input-
output tables for Puerto Rico for the years 1948 and 1963, the former
year before a period of rapid industrialization and the latter after a
period of significant change. This created the opportunity not only of
estimating basic Marxian variables but also of seeing their movement
over a period of major historical change. The results are contained in
"The rate of surplus value in Puerto Rico," published in the Journal
of Political Economy in October 1975, and "Capitalist development,
surplus value, and reproduction: an empirical examination of Puerto
Rico," published in The Subtle Anatomy of Capitalism in 1977. The
first article represents, I think, the first systematic attempt to transform
a Leontief input-output framework into Marxian categories and ad-
dresses many of the difficult accounting problems of the transforma-
tion. The second article proposes and tests several important hy-
potheses concerning the movement of Marxian variables over a period
of rapid historical change.
In 1975, I began collecting input-output data for the U.S. economy.
At that time, there were four compatible input-output tables - years
1947, 1958, 1963, and 1967. Now there is another official table, for
1972, and several more recent unofficial ones. I also began to extend
the analytical framework in two directions. The first was to introduce
the category of unproductive labor. The strategic importance of un-
ix