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Memoirs of John Urquhart
Appendix E


That there is some distinction between what Dr. Smith calls productive, and what he terms unproductive labour, we think every one must allow; and that it consists in this, that the former produces something which the latter does not produce, it must, we think, be as readily admitted. The question comes to be, "What is the something?" If all that Dr. Smith means by this distinction be, that the one produces something which is tangible, while the produce of the other is something too ethereal and too evanescent to be laid bold of, we perfectly agree with him. We think his distinction a very just, but at the same time a very useless one; and, in our opinion, he might as well have amused us by a further subdivision of labour, according as its produce was hard or soft, liquid or solid. But this is not Dr. Smith’s meaning; and, on appealing to his definition we find, that he founds this distinction on the supposition, that "the one sort of labour adds to the value of the subject on which it is bestowed; and that the other has no such effect; that the one produces a value, the other does not." The distinction seems now to turn on the meaning of the word value; and, on referring to a former definition to explain the present one, we do not find much light thrown on the subject. We are merely told of a value in use, and a value in exchange. If we take the latter of these, and apply it to the subject under consideration, we shall find that the one kind of labour produces a value just as much as the other; for the musician receives his subsistence in return for his labour in playing tunes; just as much as the tailor does, in return for his labour, in making clothes. But it may be said, that Dr. Smith terms a certain kind of labour unproductive because it produces no value in use. But this cannot have been the cause of the distinction; for, while on the one hand this objection does not apply to all the kinds of labour which he has termed unproductive, it, on the other hand, does apply to some of those which he has denominated productive. The terms wealth and value seem to us to be very indefinite; and to depend very much on the circumstances and the taste of the individual in reference to whom they are mentioned. The clothing which is so valuable to the inhabitant of Europe, would add nothing to the comfort of the naked inhabitant of New Zealand, and would consequently be of little value to him. And the antique vase which would be so highly valued by the curious antiquarian, may be thoughtlessly destroyed by the less refined peasant who digs it up.

Thirty or forty years ago, a stock of shoe-buckles would have been an addition to the real wealth of this country; at present, they would be valuable only for the material which composes them; and those who should now be employed in working them up, instead of adding, would, in fact, detract from the value of the subject on which their labour was bestowed. We have therefore the definition of value or wealth confined between two limits, and we shall come to a sufficiently correct, if not a sufficiently comprehensive notion of what that is which constitutes wealth or value, if we can but discover what that is which existed in these shoe-buckles thirty or forty years ago, and which does not exist at present. They are as substantially material now as they were before. Were they manufactured, there would be as much labour wrought up in them as ever, and the only change that we know of, that has taken place with regard to them is, that they were in fashion then, and they are so no longer; they cannot now minister to the enjoyment of the community. So that we must conclude, that these commodities, or any other commodities whatever, which are the produce of labour, form a part of the wealth of a country, just because they minister, in some way or other, to the convenience or enjoyment of its inhabitants; and because, since they are the produce of the labour of man, they must have an exchangeable value, if there be any demand for them.

Now it seems to us remarkably unfair, that of two men, whose labour has precisely the same effect on the wealth of the society, the one should be denominated a productive, and the other an unproductive labourer, merely because the labour of the former is realized in some material commodity, while that of the latter is not; that, of two men, for example, the object of both of whom it is to minister to the enjoyment of society, by furnishing them with music, he who makes a musical instrument should be called a productive labourer, while he who performs upon that instrument, and but for whom it could have no value whatever, is stigmatized with the epithet of unproductive.

By Dr. Smith it is asserted, that the former of these individuals produces a value, while the other does not. Now, if in this respect there be any difference at all between them, it seems to us to be, that the one needs materials to work upon, while the other does not; that the one merely adds to the value of what was valuable before, while the other creates a value altogether; that the maker of the instrument merely increases by his labour the value of brass and wood, and other exchangeable commodities, while the performer on the instrument gives a value to the unbought air of Heaven; and on this account, were we to make any distinction, should we deem the labour of the latter to be much more productive than that of the former.

But it may be said that this is a mere cavilling about words. It must be remembered, however, that words are the symbols of ideas, and that the sign necessarily affects the thing signified. The very distinction against which we have been arguing, seems to have confused the views of our great author through the whole of his chapter on labour. After having once associated, with a certain kind of labour, the idea of unproductiveness, he seems ever after to have contemplated it with an evil eye, and to have loaded it with the burden not only of its own faults, but also of those which did not belong to it.

Through the whole chapter there seems to run a confused notion of a subsisting connection between expenditure and the support of unproductive labour, and a connection, on the other hand, between the employment of productive labour and the accumulation of stock. And thus it is that Dr. Smith attributes to the supporting of unproductive labour all those evils which are the result of prodigality and extravagance.

It is some indistinct idea of a connection between the employment of productive labourers and the accumulation of capital which Dr. Smith entertains, where he tells us, that "a man grows rich by employing a multitude of manufacturers, while every body knows that a man may waste his whole fortune in the purchase of manufactured commodities; and thus, far from growing rich, may ruin himself,— just by employing a multitude of manufacturers."

The same confused ideas seem to have clouded our author’s understanding, when he wrote the following sentences:--

"Whatever part of his stock a man employs as a capital, he always expects it to be replaced to him with profit. He employs it, therefore, in maintaining productive hands only. Whenever he employs any part of it in maintaining unproductive hands of any kind, that part is from that moment withdrawn from his capital, and placed in his stock received for immediate consumption."

If a person worth 1000l.. can employ it in two ways, he can either on the one hand, employ it as a capital, either directly, or through the medium of the bank; or, on the other hand, he can use it as a stock reserved for immediate consumption. In either of these ways I can employ it in supporting indifferently either productive or unproductive hands; and it does not appear that my success or my failure will be at all necessarily influenced by this circumstance. If I use it as a capital I may choose to embark it in some manufacturing or mercantile speculation, and thus employ productive labourers; or I may become the manager of a theatre, and thus take into my service a number of unproductive hands. And this last scheme may be just as profitable, or even more so than the other.

On the other hand, I may use the whole of my fortune, or too great a part of it, as a stock reserved for immediate consumption; and, if I do so, I shall most certainly go to ruin, whether I spend it in the employment of productive or unproductive hands. In such a case it will not be the direction, but the amount of my expenditure, that will bring me to beggary.

But it may go far to demonstrate the absurdity of upholding the distinction between productive and unproductive labour, if we can show that one of those whom Dr. Smith most unequivocally sets down among his unproductive labourers, can be transferred without any change in his occupation from the service of the spendthrift to that of the capitalist; for we shall thus prove, first, that he has become a productive labourer, as Dr. Smith tells us, that "that part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands." It pays the wages, he says, of productive labour only.

Now, let us suppose that a musical amateur has so impoverished himself by maintaining a full band of performers for his own entertainment, that he finds himself almost ruined by his extravagance; but that rather than give up this his favourite amusement, he resolves, with the wreck of his fortune, to set up an opera, and offers to retain in his professional capacity still, those performers who had hitherto ministered to his private enjoyment. And, we may suppose, still further that they accept of his terms, and that matters go on so well, that he recruits his fortune by the profits of this speculation. There does not seem any thing very improbable in all this,— the difficulty is to reconcile it with Dr. Smith’s chapter.

These men are now supported by capital, and therefore are productive labourers; but they are musicians, and therefore are unproductive labourers. Again; they ruined their employer, and therefore a man may grow poor by employing unproductive labourers, but they have also again enriched their employer; and therefore a man may accumulate capital by employing unproductive labourers.

There does not seem then to be any real distinction between productive and unproductive labour; and even supposing that there is, there seems to be no good reason for Dr. Smith’s idea of a necessary connection between the employment of unproductive labour and expenditure, or between that of productive labour and the accumulation of stock.

Dr. Smith seems to have gone on with the popular idea, that wealth consists only in material commodities, without much consideration; and the wonder is, not that in one or two instances his acute understanding has been misled, but that in by far the greater number he has so successfully succeeded in clearing away the mists of popular prejudice and error.

Even with regard to the definition of wealth, it seems to have been our author’s own opinion, had he kept by it, that it was not confined to material objects. Had Dr. Smith but remembered his own aphorism, that "every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of life;" and had he, by his usual train of reasoning, generalized this proposition, by applying to the whole community what may be said of every one of its members, we should in all probability never have heard of productive or unproductive labour.

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