An 'unproductive labour' view of finance

The paper argues that the huge increase in the weight (economic and otherwise) role of the financial sector in the last decades is not justified by the im¬portance 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 which 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 really consist in the provision of gambling facilities, and 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 un¬prod¬uctive 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. Their amount varies with the varying intensity of the realization problem. They are not defined by the production technique, and are, in this sense, arbitrary: if the problem of aggregate demand was solved differently, these earnings may not be required. Part of the sector could disappear, and with this its claims on the product.