Value Creation in the Production of Services: A Note on Marx

Marx argued that value-creating (productive) labor was labor exchanged against capital, i.e., employed as wage labor. Thus capitalist services could create surplus value. But he saw capitalist services as 'insignificant,' and in relation to the finance sector argued that because value was created only in production and never in realization, commercial services were unproductive. Thus Marx predicted that the role of commercial-financial capital would decline vis a vis industrial capital. While he forecast both the growth of the public sector and the later policies of marketization, he failed to anticipate the future growth of the finance sector. Nevertheless, the discussion of 'commercial capital' in Chapter 17, Volume III of Capital was contradictory and unfinished. By amending Marx to account for the role of commercial businesses as productive capitals in their own right, as well as facilitators of value created elsewhere, a more convincing picture emerges. Copyright 1998 by Oxford University Press.