Mazzucato on Value and Productive Activity: A Review.
Central to the book's agenda is a dichotomy or opposition between value creation and 'value extraction' (xv; and note the subtitle of the book, evidently inspired by Foroohar 2016: see 4-5 with 298, note 11). It is therefore important for the author's purposes that clear meanings are given to these terms. At page xvii she asks the crucial question for her enquiry: 'What definition of value is used to distinguish value creation from value extraction, or even from value destruction?' Notice that value destruction is added here as an afterthought, whereas this is the genuine antonym of value creation, as against Mazzucato's suggesting that value extraction is 'the opposite' of value creation (xv).
At the beginning of the text an example of value extraction is offered, conceived of as 'the appropriation of gains vastly out of proportion to economic contribution' (2). Also, tax avoidance is treated as extracting value from 'the taxpayer' (2-3); but this is a mere metaphor really. The 'vital' distinction between value extraction and value creation is said to be 'often muddled' (4); indeed. Attempts at formal definitions follow soon after. Value creation is identified with the flow of aggregate output of the economic system, with 'wealth' as the associated, accumulated stock (6-7). That's fine; but the definition of value extraction is not so clean and compelling: 'activities focused on moving around existing resources and outputs, and gaining disproportionately from the ensuing trade' (6; emphasis added). Does this really capture all the activities that fall under the category of (illegitimate) value extraction as the author understands that? I don't think so, as will be illustrated below with a little modelling. Note also that the notion of 'disproportionate' gain entails that one can specify proportionate gain. I don't think that Mazzucato offers any clear and compelling evaluative standard for that purpose.
One may indeed question whether it has any meaning to say that someone extracts value (remuneration) beyond their contribution to its creation. Modern production processes involve the combination of a multitude of heterogeneous material and human inputs in certain quantities, in order to output a set of commodities (goods and/or services) in certain quantities. In general, every one of the specific forms of qualitatively distinct inputs is essential to the production of the set of outputs: if one of those inputs is removed, the output--and hence the value creation--reduces to zero. While it is entirely reasonable to characterize all these inputs (by the way, including the material inputs) as 'contributing' to the production of the output, it is not sensible to conceive of separable and additive contributions by each of the qualitatively distinct inputs.
A way of simplifying the issue of value extraction may be suggested, along the following lines. If value is defined as the aggregate net product of an economic system in effect, the flow of aggregate value-added per annum--then in a first step, in a non-normative or purely descriptive sense, one may say that all the parties that have a share in the net product are extracting value. From this point of view, Mazzucato's distinction between value creation and value extraction can be translated into more common and straightforward terms: some of the shares received are treated as justifiable and legitimate (perhaps because, somehow or other, they are regarded as reflecting contributions to value creation); other shares are conceived of as unjustified (because not reflecting contributions to value creation, or disproportionate with respect to any such contributions).
In other words the Mazzucato conception reduces to the proposition that all groups or persons who receive remunerations from the socio-economic system--that system including government and the public sector of course--are 'extracting' but some extractions or shares are illegitimate (which implies also, that some should be receiving larger shares). However, it should be added by way of qualification that there is an inescapable asymmetry between labour remuneration and that of others (as is made clear in the framework of classical economics): labour remuneration must have a lower bound that suffices to enable purchase of the necessary or 'subsistence' consumption to sustain the workforce. The workers are necessary input in a way no other human participants in the socio-economic system are. Hence 'productive consumption' is not a contradictory notion for the classical approach: consumption that is at one and the same time a kind of capital investment (more on this below).
In any case, there is also a further dichotomy drawn in the book--between productive and unproductive activities--which is claimed to parallel the value dichotomy, and is also inspired by the history of economic thought and classical economics in particular (8-11): 'activities [divided] according to whether they produce value or not' (9). This conceptualization is with a view to two substantive points in relation to contemporary analysis. The first is to argue against contemporary economic liberalism: 'the only major part of the economy which is now considered largely to lie outside the production boundary (2)--and thus to be "unproductive"--remains government' (10-11). The second is to lament the loss of the productive/unproductive distinction in post-classical economics because it is regarded by Mazzucato as equivalent to the distinction between earned and unearned income (12-13). Hence the abandonment of the distinction in modern economics pre-empts valid or justifiable judgements about income distribution: 'All income, according to this logic, is earned income: gone is any analysis of activities in terms of whether they are productive or unproductive' (12). In relation to this, she affirms a role for normative analysis in the following terms:
the distinction between productive and unproductive activities has rarely been the result of 'scientific' measurement. (3) Rather, ascribing value, or the lack of it, has always involved malleable socio-economic arguments which derive from a particular political perspective--which is sometimes explicit, sometimes not. The definition of value is always as much about politics, and about particular views on how society ought to be constructed, as it is about narrowly defined economics. (14)
Mazzucato seems to also identify value extraction and 'rent', as the remuneration of unproductive activity; so that when such remunerations are called profits, they are construed by her as 'really... rent' (15, 16-17). Hence the point tucked away in an endnote to page 11: 'economic measurements of value in production have fundamentally changed the ability to differentiate value creators from value extractors, and consequently the distinction between rents and profits [or rather, profits and rents]' (299). But in the approach of classical economics, which is the inspiration for the author's productive/unproductive conceptualization, there is no difference between pure profits --that is, profits net of compensations for risk-bearing and managerial labour--and rents, insofar as neither are a necessary 'supply-price': a required remuneration to bring forth a supply of a factor of production. Both are, if one likes, 'extractions' of value (on Adam Smith in particular in relation to this, see Aspromourgos 2009: 197-9). She makes the point herself in relation to David Ricardo, that 'he never addressed the awkward fact that labour creates value but the capitalists get the spoils' (47); and at the end of the three chapters focused on finance the reader is told that 'in a capitalist economy some rent is necessary: there is an unavoidable price tag to maintaining the circulation of capital in the economic system' (186-7).
It also does not seem sensible, from the standpoint of the classical approach, to conceive of 'entrepreneurship'--when understood as innovation--as having a definite supply-price, in the form of either a wage or a profit (see Aspromourgos 2014, 22-5, 34-8; or for a summary statement of the same argument, Aspromourgos 2015, 114). Mazzucato's chapter on innovation is designed to explode myths about entrepreneurship, so understood, and its rewards: 'the most modern form of rentseeking in the twenty-first-century knowledge economy is through the way in which risks in the innovation economy are socialized, while the rewards are privatized' (191). There is 'unproductive entrepreneurship', a notion taken over from William Baumol (121, 191, 206-7; Baumol 1993 is cited, mistitled: 321, note 36).
Let us turn, in somewhat more detail, to the particulars of the treatment of the history of economic thought in this book. The logic of Mazzucato's position with respect to the history of theory and its relation to the contemporary economic problems that are the focus of her interest is neatly captured in an introductory summary statement of Chapters 1-2, the two chapters that particularly focus on the history of economic thought (15). It is suggested that in classical economics growth is understood to be enhanced by shifting economic activity towards productive activities and away from unproductive activities. This does indeed go to the heart of the productive/unproductive conceptualization in the classical framework. Then the distinction evaporates with the rise of marginalism; 'anything that could get a price... became productive' (15). She adds that this enabled or justified increasing inequality--a more contestable or contingent proposition.
As to the rest of the book, the value and productive/unproductive dichotomies are then linked to a critical appraisal of the historical development of national accounting conventions in Chapter 3, including a valuable commentary on the concept of public sector value-added (85-90). (4) The subsequent three central Chapters 4-6 are a systematic critique of the historical development of finance and its role in the contemporary economy; finance as value extraction rather than value creation, and the global financial crisis of 2007 onwards as 'value destruction' (16-17, also 120, 249). In Chapter 7, the creation/extraction dichotomy is applied to critical examination of contemporary understandings and claims concerning innovation and its rewards, which follows on from Mazzucato's earlier and highly regarded book, The Entrepreneurial State. The penultimate Chapter 8 repudiates the view of the public sector as unproductive and affirms its capacity for a 'value-creating role', via various means (18, 241, 243, 249). Here Mazzucato locates the rise of the notion of the public sector as unproductive in the latter decades of the twentieth century:
in the same way and at the same time that finance was made productive, the public sector has been made to appear unproductive. Modern economic thought has relegated government to just fixing market failures rather than actively creating and shaping markets. (18)
The concluding chapter reaffirms policy reform aimed at the goals of 'more genuine innovation and less inequality', combined with what one may call 'quality growth' (my term; see 277-9), and again repudiates the financial sector, at least in its current form and reach. But here Mazzucato shows some apparent inconstancy: value 'is not a given thing, unmistakeably either inside or outside the production boundary'; a finance sector she regards as appropriate can be deemed 'productive' (18-19). And further, drawing implications from some views of Baumol and Adair Turner:
finance should be fundamentally reformed to create value inside the production boundary, and... those of its elements outside the boundary should be drastically reduced, eliminated or competed away. (121-2) in the end, the real challenge is not to label finance as value-creating or value-extracting, but to fundamentally transform it so that it is genuinely value-creating. (133; also 159-60, 275-6; and on the mechanisms of finance's value 'extraction', 146)
What this exposes is that, in the end, Mazzucato is rather indefinite as to the content she gives to the productive/unproductive demarcation: 'not to argue that one value theory is better than another... [rather] to stir a new debate... not... drawing firm and static fences around the production boundary' (279).
To clarify some of this, consider the classical meaning of the demarcation by way of the classical perception of the economic role of government that is associated with that demarcation. The author attributes the rise of the notion of the public sector as unproductive to late late-twentieth-century developments. But the notion of government as unproductive goes back to the classical economics that the author, in other respects, is rather fond of--as she acknowledges later, in relation to Smith, Ricardo and others (37-8, 46, 239-41). To be sure, the unproductiveness of government in Smith is conceptualized very differently from the role of government in contemporary marginalism. Ultimately the coherent meaning of productive labour or productive activity in Smith's canonical treatise is labour that produces capital, which is available then for reproducing and expanding the economic system via reinvestment. This is the objective meaning of the demarcation.
Government is entirely 'unproductive' then, on the supposition that it does not at all produce capital. But even Smith knew that was not entirely true; for example, government-provided education and transport infrastructure contribute elements of capital in his system of thought (Aspromourgos 2009, 164-72). Put bluntly, the classical vision of government as unproductive is that the private sector produces (especially capital) and consumes (and if it consumes less than it produces, capital accumulates and the economy grows); the public sector just consumes. Of course, on another level, even if the public sector produces no capital for potential input into future production, the infrastructure of government for the protection of property rights and enforcement of contracts is an absolutely essential precondition to the functioning of the production system. Adam Smith, the professor who lectured at great length on 'jurisprudence', was entirely aware of that (compare 239-40).
In Chapter 1, entitled 'A Brief History of Value', Mazzucato actually sketches notions of productive versus unproductive activities, from Aristotle through mercantilism, early modern economic thought (William Petty and others), the Physiocrats, Smith, Ricardo and Karl Marx. In truth, the chapter is more about the productive/unproductive dichotomy than about value. She gets the right classical idea at page 21: 'productive activities... propel and sustain growth'. But in tracing back through intellectual history all the way to Aristotle, a vague normative idea predominates: 'productive', 'virtuous', 'industrious' versus 'unproductive', 'vile', 'lazy' (22-3). It would be possible to quibble with much of the detail in all this commentary, but I leave that option aside in favour of the larger conceptual issues. When Mazzucato says that Francois Quesnay formulated 'the first systematic theory of value', all she really means is that he formulated the first theory of the production of wealth. This is true enough, if the notion of a theory of production of wealth is given appropriate definition; that is to say, if value is treated as synonymous with output (with 'wealth' the associated stock concept).
In any case, Quesnay's conceptualization is the first analytically significant explicit treatment of economic activity in terms of productive versus unproductive activities, and the author is right to emphasize its connection in Quesnay to theorizing growth (30-2). This turns on the extent to which 'the surplus [that] the "productive" sectors generate' (32) is reinvested in productive activity, rather than put to unproductive use. But this cannot be identified with a balance between 'value creation by the productive members [of society]' versus 'value extraction by the unproductive members' (32). The value creation is presumably a measure of net value-added in production in productive activities; the value extraction, a measure of income received by some groups or unproductive sectors. The relation between these two magnitudes cannot in general lead to any conclusions about growth, since it says nothing about how the former value-added is distributed or how either that revenue, or the latter extracted value, is spent. With regard to the question of how revenues or incomes are spent, the author herself comments a little further on: 'Smith was not criticizing the wealthy per se. But he was criticizing those who wasted their wealth on lavish consumption ... instead of productive investment' (38).
The classical economists are characterized as having two 'basic ideas': value derives from cost of production, 'principally labour', and 'therefore activity subsequent to value created by labour, such as finance, did not in itself create value' (34). But does not the financial sector employ labour inputs and create value-added in the usual sense of the term (in the form of at least some genuine services)? Mazzucato is also not the first to falsely attribute a labour theory of value to Adam Smith (36); but she is right to place Smith with Quesnay, as seeing a shift in employment and economic activity towards productive activity and away from unproductive activity as the key to enhancing economic growth--and, one may add, advancing economic development, in a broader sense than mere growth (36-7). As indicated above, what is required to give this idea coherence is the supposition that productive labour is capital-producing labour. And just as government is unproductive on that definition (to the extent that it does not produce capital inputs for reproduction and expansion of the economic system), while at another level, it is absolutely essential to the production system, so finance may be unproductive, while at least in part essential to the 'real' economy at another level (compare pages 50, 54).
For Mazzucato's critical purposes with respect to the contemporary economy, the classical dichotomy between productive and unproductive activities is indeed much more serviceable than recourse to value theory, classical or otherwise. Piero Sraffa's (1960, 7-8) notion of 'basic' versus 'non-basic' commodities distils the coherent content of the classical dichotomy (see also Ricardo 1951 , 273-88, on 'value' versus 'riches'), although the two demarcations are not precisely the same (a basic commodity can be unproductively employed). But the non-basics have value--including, if one wishes to think in terms of the labour theory of value, labour value--and their production involves the creation of value-added, even while they are not self-reproducing. Like the public sector in the classical characterization as unproductive (discussed above), the non-basics consume production inputs but do not contribute to the production of such inputs (putting aside the possible use of non-basics as inputs to their own production). The author alludes to Sraffa's significance in this regard, at note 19 (300) attached to page 33, where the distinction between '"necessary" reproduction and luxury production' is said to be 'a theme prominent in ... Sraffa'. (This reference to Sraffa is not noted in the index; only the further reference at page 70, in relation to capital theory.)
The author gets close to the correct formulation when she writes, in relation to Smith's notion of unproductive labour: 'What informs Smith's classification is his conviction that some types of labour do not "reproduce" the value needed to keep those workers alive at a subsistence level' (38; emphasis added). Except that it is not merely 'value' that must be reproduced. If (quite rightly) the necessary consumption goods of the labour that is engaged in production of capital is included as part of the 'basic' commodities of the economic system, then productive labour is the labour directly and indirectly required in the production of capital for the production of further capital, including that labour's own consumption--which is thereby productive consumption (in relation to this, see page 45 on Ricardo). Smith might be a little confused about this but we should not be. (At page 40, Mazzucato rightly draws attention to the problem of how services may be coherently incorporated in his productive/unproductve conceptualization.)
The author immediately proceeds, after the previously quoted sentence, to say: 'In other words, if all the subsistence that was needed to keep a person alive was a certain amount of grain, then anyone who does not produce as much value as that amount of grain is by definition unproductive' (38; emphasis added). It is not the value that a worker produces that counts in a coherent productive/unproductive distinction; it is the commodities produced and their use. The point is framed more pertinently, if still somewhat imprecisely, by Mazzucato later, in relation to Ricardo: 'He believed that industrial production in general leads to surpluses, but for him the real question is how those surpluses are used. If the surpluses finance productive consumption, they are productive; if not, they are unproductive' (46). A worker engaged in the production of silk--say, for the luxury consumption of the idle rich--is emphatically engaged in unproductive labour, for Smith and for coherent contemporary purposes. But of course, if the silk production is profitable, then it is returning sufficient revenue ('value') to fund the wages and consumption of that worker. Then the author gets it right when she goes on to say that the 'surplus' produced by the productive workers 'sustains unproductive labourers' (38); but this is about producing definite products, not merely creating value or value-added.
Following on from this, many strange ideas are attributed to David Ricardo: he believed 'how... value was distributed throughout society... what we would call income distribution' was 'glaringly absent' from Smith's theory of value; Ricardo 'felt that the distribution of wages was... the "principal problem" in economics and ultimately regulates... growth'; he 'actually believed in the labour theory of value', by implication, in some stricter sense--'value... strictly proportional to the amount of labour time'--than Smith (41). The real point of Ricardo for Mazzucato's narrative is the idea of growth shifting distribution in favour of the rents of the value-extracting landowning class, thereby prejudicing further growth by reducing profitability of capital (41-4), a lesson she thinks all too relevant to contemporary circumstances, where 'the massive rents' from the financial sector's 'speculative activity' cause 'disincentives for industrial production' (44). The chapter finishes with a section on Marx (47-56), the most pertinent element of which, for the author's agenda, is the distinction between productive capital employed in production, which produces surplus value and is therefore productive, and capital employed in mere circulation of capital or commodities, which appropriates but does not produce surplus value, and is therefore unproductive (52-6). This conceptualization should be subject to the same analytical clarification, in terms of basics versus non-basics, as I suggested above in relation to Smith.
To give some formal expression to the key issue, consider the following system: [a.sub.ij] is commodity i input per unit of commodity j output ('circulating capital', with constant returns to scale); [l.sub.j] is homogeneous labour input per unit of; output; [Q.sub.j] is output of commodity j; and L is available labour (i = 1, 2; j= 1, 2, 3). Then,
[a.sub.11][Q.sub.1],[a.sub.21][Q.sub.1] produces [Q.sub.1]
[a.sub.12][Q.sub.2],[a.sub.22][Q.sub.2] produces [Q.sub.2]
[a.sub.13][Q.sub.3],[a.sub.23][Q.sub.3] produces [Q.sub.3]
[a.sub.11][Q.sub.1]+[a.sub.12][Q.sub.2] [less than or equal to] [Q.sub.1] (1)
[a.sub.21][Q.sub.1]+[a.sub.22][Q.sub.2] [less than or equal to] [Q.sub.2] (2)
[l.sub.1][Q.sub.1] + [l.sub.2][Q.sub.2] + [l.sub.3][Q.sub.3] [less than or equal to] L (3)
The production of commodity 1 together with commodity 2 constitutes a selfreproducing production system that generates a surplus product (positive valueadded), when at least one of the weak inequalities (1, 2) is satisfied as a strong inequality. That system is independent of commodity 3 and its production, whereas commodity 3 production cannot proceed without inputs of outputs from activities 1 and 2. Commodity 3 is an output but not an input. In Sraffa's language, commodities 1 and 2 are basic and commodity 3 is non-basic. Indeed, unless the commodity 1-2 system produces a surplus--and activity 3 is able, somehow, to appropriate some of that surplus--activity 3 and its output cannot exist. One can call such appropriation 'value extraction' by activity 3, if one likes, where the 'value' is the quantities of commodities 1 and 2, potentially available for expanding the output of commodities 1 and 2 (or for direct consumption), but instead used for commodity 3 production. Activity 3 might be conceived of as luxury consumption, or financial services, or public administration and government.
Note also, recalling Mazzucato's definition of value extraction as 'moving around ... resources... and gaining disproportionately from the ensuing trade' (6), quoted more fully above, that activity 3 is engaged in very real production--transformation of inputs into output--not just shuffling existing resources in exchange. Furthermore, if one imposes classical 'free competition', free entry and exit of capital and so on (see Salvadori and Signorino 2013), then one can write the following price equations in association with the above system, capturing the notion of classical natural prices or Marx's prices of production:
([p.sub.1][a.sub.11]+[p.sub.2][a.sub.21])(1+r) + w[l.sub.1]=[p.sub.1] (4)
([p.sub.1][a.sub.12] +[p.sub.2][a.sub.22])(1+r) + w[l.sub.2] =[p.sub.2] (5)
([p.sub.1][a.sub.13]+[p.sub.2][a.sub.23])(1+r) + w[l.sub.3] =[p.sub.3] (6)
where [p.sub.j] and w are the prices of the three commodities and labour, expressed in an arbitrary conventional unit of account (say, euros), and r is the uniform rate of profit on capital. (Obviously, with this step, activity 3 cannot be conceived of as representing the public sector.) Taking w as given and exogenously fixing either the real wage or rate of profit--subject to maximum feasible values of those two variables--prices and distribution are determined.
As was suggested earlier, the wages and profits paid to the workers and owners of capital in activities 1 and 2 are also value (value-added) extracted from that commodity 1-2 system--whether or to what extent each is justifiable is a question, but one I leave aside. Activity 3 is generating value-added itself; and the labour and capital employed in activity 3, under competitive conditions, are receiving the same remunerations as labour and capital in activities 1 and 2. (5) It would therefore make no sense to regard the wages or profits received in activity 3 as 'unearned', while at the same time regarding the wages or profits in activities 1 and 2 as 'earned'. Nevertheless, activity 3 can still be classed as unproductive. (Most obviously, its output cannot be reinvested in the economic system to enable reproduction or growth, and its output cannot expand except by appropriating, for use as input, increasing quantities of the outputs of the other two activities.) The conclusion to be drawn is that 'unproductiveness' is not synonymous with value extraction, and unproductiveness does not entail that an activity involves no creation of value-added. (Barba and de Vivo 2012, actually much cited by Mazzucato, is in the same spirit as our diagnosis here.)
Chapter 2 of the book, the second of the two chapters that particularly focus on the history of economic thought, deals, more briefly, with 'the rise of the marginalists' (57)--regarded adversely of course--which I will not consider in any detail at all. It has many errors and infelicities. The misplaced emphasis on the significance of value theory carries over here as well: 'to put the classicals to bed properly [that is, to overthrow the classical approach], a new theory of value had to be invented' (59). In fact, it was inventing a new theory of functional distribution which was the crucial thing. Perhaps the author would not disagree; here again, as in the previous chapter, value and productiveness are mixed up in a conceptually unsatisfactory way: 'The marginal utility theory of value states that all income is reward for a productive undertaking' (60; marginal productivity theory is discussed at 69-74).
The moral of the story is that, for marginalism, whatever is successfully marketed is deemed the result of productive activity, so that for market economic activity, the productive/unproductive distinction 'effectively falls away' (66); 'we can no longer reliably say who creates value and who extracts it and therefore how the proceeds of production--income--should reasonably be distributed' (71). A number of times throughout the book Mazzucato seeks to contrast the classical versus marginalist approaches to value in terms of a theory of 'value determining price' versus a theory of 'price determining value', also conceived of in terms of a contrast between objective and subjective approaches (for example, 7-8, 270, 279-80). A more pertinent characterization would be the contrast between the classical objective notion of cost, and the marginalist subjective approach to cost; behind this contrast lie contrasting conceptions of functional distribution (Fratini 2018).
The theory of functional income distribution is the crucial conceptual and theoretical issue, both for the divide between classical and marginalist economics and for the critique of the contemporary dominant economic regime. This truth is confirmed and reinforced by recognition that the conventional understanding of growth processes hinges on the supply-side approach to the theory of activity levels, which is itself a mere corollary of the marginal productivity theory of distribution. I am one of those historians of economics who regards the contemporary relevance of the history of theory as a key reason, perhaps the primary reason, for studying that history. I am also in broad agreement with Mazzucato's intent with respect to contemporary economic organization, governance and policy. A book like this that seeks to provide contemporary lessons drawn from the history of theory is therefore doubly welcome to me. But more analytical clarity would enhance the contribution that the intellectual history can make--and strengthen the critique of the dominant contemporary paradigm.
No potential conflict of interest was reported by the author.
Notes on contributor
Tony Aspromourgos is the author of The Science of Wealth: Adam Smith and the Framing of Political Economy (2009), as well as numerous articles in all the major journals devoted to the history of economic thought, and a former editor of the History of Economics Review.
(1.) Mariana Mazzucato, The Value of Everything: Making and Taking in the Global Economy, London, Allen Lane, 2018, xix + 358 pp., [pounds sterling]20.00 (hb), ISBN 978-0-241-18881-1 (hb); 978-0-241-34779-9 (pb).
(2.) 'Production boundary' is Mazzucato's term for the dividing line between productive and unproductive activities.
(3.) If 'rarely', does this mean that it sometimes has been a scientific result?
(4.) But also including an astonishingly garbled attempt at a summary statement of John Maynard Keynes's theory of aggregate employment:
Keynes assumed that workers would underestimate the purchasing power of their wages, and would therefore be willing to produce more than they needed to. In this way, workers' involuntary overproduction would in turn create involuntary unemployment--fewer workers being needed to do the same amount of work--and the economy could find itself in a low -output equilibrium. (82)
There are quite a number of appeals to Keynes throughout the book, especially in Chapter 8.
(5.) Commodity 3 has value also in the sense of the labour theory of value: there is a quantity of labour directly and indirectly required for its production.
I am indebted to an anonymous referee for comment.
Aspromourgos, T. 2009. The Science of Wealth: Adam Smith and the Framing of Political Economy. London: Routledge.
Aspromourgos, T. 2014. 'Entrepreneurship, Risk and Income Distribution in Adam Smith.' European Journal of the History of Economic Thought 21 (1): 21-40. doi:10.1080/09672567.2012.683025.
Aspromourgos, T. 2015. 'Profits.' In International Encyclopedia of the Social & Behavioral Sciences, 2nd edn, edited by J. D. Wright, Vol. 19, 111-116. Oxford: Elsevier.
Barba, A. and G. de Vivo. 2012. 'An "Unproductive Labour" View of Finance.' Cambridge Journal of Economics 36 (6): 1479-1496. doi:10.1093/cje/bes048.
Baumol, W. J. 1993. Entrepreneurship, Management, and the Structure of Payoffs. Cambridge, MA: MIT Press.
Foroohar, R. 2016. Makers and Takers: The Rise of Finance and the Fall of American Business. New York: Crown Business.
Fratini, S. M. 2018. 'Sraffa on the Degeneration of the Notion of Cost.' Cambridge Journal of Economics 42 (3): 817-836. doi:10.1093/cje/bex063.
Ricardo, D. 1951 . 'On the Principles of Political Economy and Taxation' In The Works and Correspondence of David Ricardo, Vol. 1, edited by P. Sraffa. Cambridge: Cambridge University Press.
Salvadori, N. and R. Signorino. 2013. 'The Classical Notion of Competition Revisited.' History of Political Economy AS (1): 149-175. doi:10.1215/00182702-1965222.
Sraffa, P. 1960. Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.
School of Economics, University of Sydney, Sydney, Australia
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