[Chapter IV]  Theories of Productive and Unproductive Labour

We come now to the last controversial point in Adam Smith’s writings which we have to consider: the distinction between productive and unproductive labour.

||300| In Adam Smith’s definition of what he calls productive labour as distinguished from unproductive labour, we find the same two-sided approach as we have found on every question up to now.  Jumbled together in his presentation we find two definitions of what he calls productive labour, and to begin with we will examine the first, the correct definition.

[1.  Productive Labour from the Standpoint of Capitalist Production: Labour Which Produces Surplus-Value]

Productive labour, in its meaning for capitalist production, is wage-labour which, exchanged against the variable part of capital (the part of the capital that is spent on wages), reproduces not only this part of the capital (or the value of its own labour-power), but in addition produces surplus-value for the capitalist, It is only thereby that commodity or money is transformed into capital, is produced as capital.  Only that wage-labour is productive which produces capital.  (This is the same as saying that it reproduces on an enlarged scale the sum of value expended on it, or that it gives in return more labour than it receives in the form of wages.  Consequently, only that labour-power is productive which produces a value greater than its own.)

The mere existence of a class of capitalists, and therefore of capital, depends on the productivity of labour: not however on its absolute, but on its relative productivity.  For example: if a day’s labour only sufficed to keep the worker alive, that is, to reproduce his labour-power, ||301| speaking in an absolute sense his labour would be productive because it would be reproductive; that is to say, because it constantly replaced the values ( equal to the value of its own labour-power) which it consumed.  But in the capitalist sense it would not be productive because it produced no surplus-value.  (It produced in fact no new value, but only replaced the old; it would have consumed it—the value—in one form, in order to reproduce it in the other.  And in this sense it has been said that a worker is productive whose production is equal to his own consumption, and that a worker is unproductive who consumes more than he reproduces.)

Productivity in the capitalist sense is based on relative productivity—that the worker not only replaces an old value, but creats a new one; that he materialises more labour-time in his product than is materialised in the product that keeps him in existence as a worker.  It is this kind of productive wage-labour that is the basis for the existence of capital.

<Assuming, however, that no capital exists, but that the worker appropriates his surplus-labour himself—the excess of values that he has created over the values that he consumes.  Then one could say only of this labour that it is truly productive, that is, that it creates new values.>

[2.  Views of the Physiocrats and Mercantilists on Productive Labour]

This conception of productive labour follows naturally from Adam Smith’s view of the origin of surplus-value, that is, of the nature of capital.  In so far as he holds to this conception he is following a course that was taken by the Physiocrats and even by the Mercantilists; he only frees it from misconceptions, and in this way brings out its inner kernel.  Though wrong in thinking that only agricultural labour is productive, the Physiocrats put forward the correct view that from the capitalist standpoint only that labour is productive which creates a surplus—value; and in fact a surplus—value not for itself, but for the owner of the conditions of production; labour which produces a net product not for itself, but for the landowner, For the surplus-value or surplus labour-time is materialised in a surplus-produce or net product.  (But here again they have a wrong conception of this; in as much as there is, for example, more wheat than labourers and farmers eat; but also in the case of cloth there is more than what the cloth manufacturers—workman and master—need for their own clothing.) Surplus-value itself is wrongly conceived, because they have a wrong idea of value and reduce it to the use-value of labour, not to labour-time, social, homogeneous labour.  Nevertheless, there remains the correct definition that only the wage-labour which creates more value than it costs is productive.  Adam Smith frees this definition from the wrong conception with which the Physiocrats linked it.

If we go back from the Physiocrats to the Mercantilists, there too we find one aspect of their theory which contains the same view of productive labour, even though they were not conscious of it, The basis of their theory was the idea that labour is only productive in those branches of production whose products, when sent abroad, bring back more money than they have cost (or than had to be exported in exchange for them); which therefore enabled a country to participate to a greater degree in the products of newly-opened gold and silver mines.  They saw that in these countries there was a rapid growth of wealth and of the middle class.  What in fact was the source of this influence exerted by gold?  Wages did not rise in proportion to the prices of commodities; that is, wages fell, and because of this relative surplus-labour increased and the rate of profit rose—not because the labourer had become more productive, but because the absolute wage (that is to say, the quantity of means of existence which the labourer received) was forced down—in a word, because the position of the workers grew worse.  In these countries, therefore, labour was in fact more productive for those who employed it.  This fact was linked with the influx of the precious metals; and it was this, though they were only dimly aware of it, which led the Mercantilists to declare that labour employed in such branches of production was alone productive.

||302| “The remarkable increase [of population] which has taken place […] in almost every European State, during the last fifty or sixty years, has perhaps proceeded chiefly from the increased productiveness of the American mines.  An increased abundance of the precious metals” (of course as a result of the fall in their real value) “raises the price of commodities in a greater proportion than the price of labour; it depresses the condition of the labourer, and at the same time increases the gains of his employer, who is thus induced to enlarge his circulating capital to the utmost of his ability, to hire as many hands as he has the means to pay;—and it has been seen that this is precisely the state of things most favourable to the increase of people…  Mr. Malthus observes, that ‘the discovery of the mines of America, during the time that it raised the rice of corn between three and four times, did not nearly so much as double the price of labour’.  — The price of commodities intended for home consumption (of corn for instance) does not immediately rise in consequence of an influx of money; but as the rate of profit in agricultural employments is thus depressed below the rate of profit in manufactures, capital will gradually be withdrawn from the former to the latter: thus all capital comes to yield higher profits than formerly, and a rise of profits is always equivalent to a fall of wages” (John Barton, Observations on the Circumstances which Influence the Condition of the Labouring Classes of Society, London, 1817, pp. 29 sqq.).*

So, firstly, according to Barton, in the second half of the eighteenth century there was a repetition of the same phenomenon as that which, from the last third of the sixteenth century and in the seventeenth, has given the impulse to the Mercantile system.  Secondly as only exported goods were measured in gold and silver on the basis of its reduced value, while those for home consumption continued to be measured in gold and silver according to its former value (until competition among the capitalists put an end to this measuring by two different standards), labour in the former branches of production appeared to be directly productive, that is, creating surplus-value, through the depression of wages below their former level.

[3.  The Duality in Smith’s Conception of Productive Labour.  His First Explanation: the View of Productive Labour as Labour Exchanged for Capital]

The second, wrong conception of productive labour which Smith develops is so interwoven with the correct one that the two follow each other in rapid succession in the same passage.  To illustrate the first conception it is therefore necessary to tear the quotations into separate parts.

“There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect.  The former, as it produces a value, may be called productive; the latter, unproductive labour.  Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master’s profit.  The labour of a menial servant, on the contrary, adds to the value of nothing.  Though the manufacturer has his wages advanced to him by his master, he, in reality, costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed.  But the maintenance of a menial servant never is restored.  A man grows rich by employing a multitude of manufacturers: he grows poor, by maintaining a multitude of menial servants” ([Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations,] b. II, ch. III, Vol. II, ed. McCulloch, pp. 93 and 94).

In this passage—and in its continuation to be quoted later, the contradictory definitions jostle each other even more closely—what is in the main and pre-eminently understood by productive labour is labour which produces a surplus-value—“his master’s profit”—in addition to the reproduction of the value of “his” (the labourer’s) “own maintenance”.  Also, the industrialist could not grow rich “by employing a multitude of manufacturers” (working men), unless the latter, in addition to the value which their own maintenance costs, added also a surplus-value.

Secondly, however, in this passage Adam Smith treats as productive labour, labour which in general “produces a value”.  ||303| Leaving this latter statement out of account for the moment, however, we will first cite other passages in which the first conception is partly repeated, partly formulated more sharply, but particularly also further developed.

“If the quantity of food and clothing, which were — consumed by unproductive, had been distributed among productive hands, they would have reproduced, together with a profit, the full value of their consumption” (l.c., p. 109; b. II, ch. III).

Here the productive labourer is quite explicitly one who not only produces for the capitalist the full value of the means of subsistence contained in his wages, but reproduces it for him “with a profit”.

Only labour which produces capital is productive labour.  Commodities or money become capital, however, through being exchanged directly for labour-power, and exchanged only in order to be replaced by more labour than they themselves contain.  For the use-value of labour-power to the capitalist as a capitalist does not consist in its actual use-value, in the usefulness of this particular concrete labour—that it is spinning labour, weaving labour, and so on.  He is as little concerned with this as with the use-value of the product of this labour as such, since for the capitalist the product is a commodity (even before its first metamorphosis), not an article of consumption.  What interests him in the commodity is that it has more exchange-value than he paid for it; and therefore the use-value of the labour is, for him, that he gets back a greater quantity of labour-time than he has paid out in the form of wages.  Included among these productive workers, of course, are all those who contribute in one way or another to the production of the commodity, from the actual operative to the manager or engineer (as distinct from the capitalist), And so even the latest English official report on the factories “explicitly” includes in the category of employed wage-labourers all persons employed in the factories and in the offices attached to them, with the exception of the manufacturers themselves (see the wording of the report before the concluding part of this rubbish).

Productive labour is here defined from the standpoint of capitalist production, and Adam Smith here got to the very heart of the matter, hit the nail on the head.  This is one of his greatest scientific merits (as Malthus rightly observed, this critical differentiation between productive and unproductive labour remains the basis of all bourgeois political economy) that he defines productive labour as labour which is directly exchanged with capital; that is, he defines it by the exchange through which the conditions of production of labour, and value in general, whether money or commodity, are first transformed into capital (and labour into wage-labour in its scientific meaning).

This also establishes absolutely what unproductive labour is.  It is labour which is not exchanged with capital, but directly with revenue, that is, with wages or profit (including of course the various categories of those who share as co-partners in the capitalist’s profit, such as interest and rent).  Where all labour in part still pays itself (like for example the agricultural labour of the serfs) and in part is directly exchanged for revenue (like the manufacturing labour in the cities of Asia), no capital and no wage-labour exists in the sense of bourgeois political economy.  These definitions are therefore not derived from the material characteristics of labour (neither from the nature of its product nor from the particular character of the labour as concrete labour), but from the definite social form, the social relations of production, within which the labour is realised.  An actor, for example, or even a clown, according to this definition, is a productive labourer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labour than he receives from him in the form of wages; while a jobbing tailor who comes to the capitalist’s house and patches his trousers for him, producing a mere use-value for him, is an unproductive labourer.  The former’s labour is exchanged with capital, the latter’s with revenue.  The former’s labour produces a surplus-value; in the latter’s, revenue is consumed.

Productive and unproductive labour is here throughout conceived from the standpoint of the possessor of money, from the standpoint of the capitalist, not from that of the workman; hence the nonsense written by Ganilh, etc., who have so little understanding of the matter that they raise the question whether the labour or service or function of the prostitute, flunkey, etc., brings in returns.  |303||

||304| A writer is a productive labourer not in so far as he produces ideas, but in so far as he enriches the publisher who publishes his works, or if he is a wage-labourer for a capitalist.

The use-value of the commodity in which the labour of a productive worker is embodied may be of the most futile kind.  The material characteristics are in no way linked with its nature which on the contrary is only the expression of a definite social relation of production.  It is a definition of labour which is derived not from its content or its result, but from its particular social form.

On the other hand, on the assumption that capital has conquered the whole of production—and that therefore a commodity (as distinct from a mere use-value) is no longer produced by any labourer who is himself the owner of the conditions of production for producing this commodity—that therefore only the capitalist is the producer of commodities (the sole commodity excepted being labour-power)—then revenue must be exchanged either against commodities which capital alone produces and sells, or against labour, which just like those commodities is bought in order to be consumed; that is, only for the sake of its particular material characteristics, its use-value—for the sake of the services which, through its particular material characteristics, it renders to its buyer and consumer.  For the producer of these services the services rendered are commodities.  They have a definite use-value (imaginary or real) and a definite exchange-value.  For the buyer, however, these services are mere use-values, objects in which ||305| he consumes his revenue.  These unproductive labourers do not receive their share of revenue (of wages and profits), their co-partnership in the commodities produced by productive labour, gratis: they must buy their share in them; but they have nothing to do with their production.

It is, however, in any case clear: the greater the part of the revenue (wages and profit) that is spent on commodities produced by capital, the less the part that can be spent on the services of unproductive labourers, and vice versa.

The determinate material form of the labour, and therefore of its product, in itself has nothing to do with this distinction between productive and unproductive labour.  For example, the cooks and waiters in a public hotel are productive labourers, in so far as their labour is transformed into capital for the proprietor of the hotel.  These same persons are unproductive labourers as menial servants, inasmuch as I do not make capital out of their services, but spend revenue on them.  In fact, however, these same persons are also for me, the consumer, unproductive labourers in the hotel.

“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 of productive labour only.  That which is immediately destined for constituting a revenue either as profit or as rent, may maintain indifferently either productive or unproductive hands.  Whatever part of his stock a man employs as a capital, he always expects it to be replaced to him with a profit.  He employs it, therefore, in maintaining productive hands only; and after having served in the function of a capital to him, it constitutes a revenue to them.  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 reserved for immediate consumption” (l.c., p. 98).

To the extent that capital conquers the whole of production, and therefore the home and petty form of industry—in short, industry intended for self-consumption, not producing commodities—disappears, it is clear that the unproductive labourers, those whose services are directly exchanged against revenue, will for the most part be performing only personal services, and only an inconsiderable part of them (like cooks, seamstresses, jobbing tailors and so on) will produce material use-values.  That they produce no commodities follows from the nature of the case.  For the commodity as such is never an immediate object of consumption, but a bearer of exchange-value.  Consequently only a quite insignificant part of these unproductive labourers can play a direct part in material production once the capitalist mode of production has developed.  They participate in it only through the exchange of their services against revenue.  This does not prevent, as Adam Smith remarks, the value of the services of these unproductive labourers being determined and determinable in the same (or an analogous) way as that of the productive labourers: that is, by the production costs involved in maintaining or producing them.  Other factors also come into play in this connection, but they are not relevant here.

||306| The labour-power of the productive labourer is a commodity for the labourer himself.  So is that of the unproductive labourer.  But the productive labourer produces commodities for the buyer of his labour-power.  The unproductive labourer produces for him a mere use-value, not a commodity; an imaginary or a real use-value.  It is characteristic of the unproductive labourer that he produces no commodities for his buyer, but indeed receives commodities from him.

“The labour of some of the most respectable orders in the society is, like that of menial servants, unproductive of any value…  The sovereign, for example, with all the officers both of justice and war who serve under him, the whole army and navy, are unproductive labourers.  They are the servants of the public, and are maintained by a part of the annual produce of the industry of other people…  In the same class must be ranked.., churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.” (l.c., pp. 94-95).

It itself, as has been said, this distinction between productive and unproductive labour has nothing to do either with the particular speciality of the labour or with the particular use-value in which this special labour is incorporated.  In the one case the labour is exchanged with capital, in the other with revenue.  In the one case the labour is transformed into capital, and creates a profit for the capitalist; in the other case it is an expenditure, one of the articles in which revenue is consumed.  For example, the workman employed by a piano maker is a productive labourer.  His labour not only replaces the wages that he consumes, but in the product, the piano, the commodity which the piano maker sells, there is a surplus-value over and above the value of the wages.  But assume on the contrary that I buy all the materials required for a piano (or for all it matters the labourer himself may possess them), and that instead of buying the piano in a shop I have it made for me in my house.  The workman who makes the piano is now an unproductive labourer, because his labour is exchanged directly against my revenue.

[4.  Adam Smith’s Second Explanation: the View of Productive Labour as Labour Which Is Realised in a Commodity]

It is however clear that in the same measure as capital subjugates to itself the whole of production—that is to say, that all commodities are produced for the market and not for immediate consumption, and the productivity of labour rises in this same measure—there will also develop more and more a material difference between productive and unproductive labourers, inasmuch as the former, apart from minor exceptions, will exclusively produce commodities, which the latter, with minor exceptions, will perform only personal services.  Hence the former class will produce immediate, material wealth consisting of commodities, all commodities except those which consist of labour-power itself.  This is one of the aspects which lead Adam Smith to put forward other points of difference, in addition to the first and in principle determining specific difference between productive and unproductive labour.  Thus, following through various associations of ideas, he says:

“The labour of a menial servant” (as distinct from that of a manufacturer) “adds to the value of nothing … the maintenance of a menial servant never is restored.  A man grows rich by employing a multitude of manufacturers; he grows poor, by maintaining a multitude of menial servants.  The labour of the latter, however, has its value, and deserves its reward as well as that of the former.  But the labour of the manufacturer fixes and realises itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past.  It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion.  That subject, or what is the same thing, the price of that subject, can afterwards, if necessary, put into motion a quantity of labour equal to that which had originally produced it.  The labour of the menial servant, ||307| on the contrary, does not fix or realise itself in any particular subject or vendible commodity.  His services generally perish in the very instant of their performance, and seldom leave any trace or value behind them, for which an equal quantity of service could afterwards be procured.  The labour of some of the most respectable orders in the society is, like that of menial servants, unproductive of […] value, and does not fix or realise itself in any permanent subject, or vendible commodity” (l.c., pp. 93-94 passim).

To define the unproductive labourer we here have the following determinants, which at the same time reveal the links in Adam Smith’s train of thought:

It (the labour of the unproductive labourer) is “unproductive of […] value”, “adds to the value of nothing”, “the maintenance” (of the unproductive labourer) “never is restored”, “[it] does not fix or realise itself in any particular subject or vendible commodity”.  On the contrary, “his services generally perish in the very instant of their performance, and seldom leave any trace or value behind them for which an equal quantity of service could afterwards be procured”.  Finally, his labour “does* not fix or realise itself in any permanent subject or vendible commodity”.

Here “productive of value” or “unproductive of value” is used in a different sense from that in which these terms were used originally.  The reference is no longer to the production of a surplus-value, which in itself implies the reproduction of an equivalent for the value consumed.  But according to this presentation the labour of a labourer is called productive in so far as he replaces the consumed value by an equivalent, by adding to any material, through his labour, a quantity of value equal to that which was contained in his wages.  Here the definition by social form, the determination of productive and unproductive labourers by their relation to capitalist production, is abandoned.  From Chapter IX of Book IV (where Adam Smith criticises the doctrine of the Physiocrats), it can be seen that he came to make this aberration as a result partly of his opposition to the Physiocrats and partly under their influence.  If a labourer merely replaces each year the equivalent of his wages, then for the capitalist he is not a productive labourer.  He does indeed replace his wages, the purchase price of his labour.  But the transaction is absolutely the same as if this capitalist had bought the commodity which this labourer produces.  He pays for the labour contained in the constant capital and in the wages.  He possesses the same quantity of labour in the form of the commodity as he had before in the form of money.  Its money is not thereby transformed into capital.  In this case it is the same as if the labourer himself owned his conditions of production.  He must each year deduct the value of the conditions of production from the value of his annual product, in order to replace them.  What he consumed or could consume annually would be that portion of the value of his product equal to the new labour added to his constant capital during the year.  In this case, therefore, it would not be capitalist production.

The first reason why Adam Smith calls this kind of labour “productive” is that the Physiocrats call it “stérile”* and “nonproductive”.  **

Thus Adam Smith tells us in the chapter referred to:

“First, this class” (namely the industrial classes, who do not carry on agriculture), “it is acknowledged “ [by the Physiocrats], “reproduces annually the value of its own annual consumption, and continues, at least, the existence of the stock or capital which maintains and employs it…  Farmers and country labourers, indeed, over and above the stock which maintains and employs them, reproduce annually a neat produce, a free rent to the landlord .., the labour of farmers and country labourers is certainly more productive than that of merchants, artificers, and manufacturers.  The superior produce of the one class, however, does not render the other barren or unproductive” ([Wealth of Nations O.U.P. edition, Vol. II, pp. 294-95], [Garnier], l.c., t, III, p. 530).

Here, therefore, Adam Smith falls back into the Physiocratic ||308| standpoint.  The real “productive labour”, which produces a surplus-value and therefore a “neat produce”, is agricultural labour.  He abandons his own view of surplus-value and accepts that of the Physiocrats.  At the same time he asserts, as against the Physiocrats, that manufacturing (and according to him, also commercial) labour is nevertheless also productive, even if not in this highest sense of the word.  He therefore drops the definition by social form, the definition of what a “productive labourer” is from the standpoint of capitalist production; and asserts, in opposition to the Physiocrats, that the non-agricultural, industrial class reproduces its own wages, that is, it does after all produce a value equal to the value it consumes, and thereby “continues, at least, the existence of the stock or capital which employs it”.  Hence arises, under the influence of and in contradiction to the Physiocrats, his second definition of what is “productive labour.

“Secondly,” says Adam Smith, “it seems, on this account, altogether improper to consider artificers, manufacturers, and merchants, in the same light as menial servants.  The labour of menial servants does not continue the existence of the fund which maintains and employs them.  Their maintenance and employment is altogether at the expense of their masters, and the work which they perform is not of a nature to repay expense.  That work consists in services which perish generally in the very instant of their performance, and does not fix or realise itself in any vendible commodity, which can replace the value of their wages and maintenance.  The labour, on the contrary, of artificers, manufacturers, and merchants, naturally does fix and realise itself in some such vendible commodity.  It is up on this account that, in the chapter in which I treat of productive and unproductive labour, I have classed artificers, manufacturers, and merchants among the productive labourers, and menial servants among the barren or unproductive” ([ibid., p. 295], [Garnier], l.c., p. 531).

As soon as capital has mastered the whole of production, revenue, in so far as it is at all exchanged against labour, will not be exchanged directly against labour which produces commodities, but against mere services.  It is exchanged partly against commodities which are to serve as use-values, and partly against services, which as such are consumed as use-values.

A commodity—as distinguished from labour-power itself—is a material thing confronting man, a thing of a certain utility for him, in which a definite quantity of labour is fixed or materialised.

So we come to the definition already in essence contained in point I: a productive labourer is one whose labour produces commodities; and indeed such a labourer does not consume more commodities than he produces, than his labour costs.  His labour fixes and realises itself “in some such vendible commodity”, “in any vendible commodity which can replace the value of their wages and maintenance”—(that is, of the workers who produced these commodities).  By producing commodities the productive worker constantly reproduces the variable capital which he constantly consumes in the form of wages.  He constantly produces the fund which pays him, “which maintains and employs him”.

In the first place.  Adam Smith naturally includes in the labour which fixes or realises itself in a vendible and exchangeable commodity all intellectual labours which are directly consumed in material production.  Not only the labourer working directly with his hands or a machine, but overlooker, engineer, manager, clerk, etc.—in a word, the labour of the whole personnel required in a particular sphere of material production to produce a particular commodity, whose joint labour (co-operation) is required for commodity production.  In fact they add their aggregate labour to the constant capital, and increase the value of the product by this amount.  (How far is this true of bankers, etc.?)

||309| Secondly, Adam Smith says that on the whole, “generally”, this is not the case with the labour of unproductive labourers.  Even though capital has conquered material production, and so by and large home industry has disappeared, and the industry of the small craftsman who makes use-values directly for the consumer at his home —even then, Adam Smith knows quite well, a seamstress whom I get to come to my house to sew shirts, or workmen who repair furniture, or the servant who scrubs and cleans the house, etc., or the cook who gives meat and other things their palatable form, fix their labour in a thing and in fact increase the value of these things in exactly the same way as the seamstress who sews in a factory, the engineer who repairs the machine, the labourers who clean the machine, or the cook who cooks in a hotel as the wage-labourer of a capitalist.  These use-values are also, potentially, commodities; the shirts may be sent to the pawnshop, the house resold, the furniture put up to auction, and so on.  Thus these persons have potentially also produced commodities and added value to the objects on which they have worked.  But this is a very small category among unproductive workers, and does not apply either to the mass of menial servants or to parsons, government officials, soldiers, musicians and so on.

But however large or small the number of these “unproductive labourers” may be, this much at any rate is evident—and is admitted by the limitation expressed in the phrase “services which perish generally in the very instant of their performance”, etc.— that neither the special kind of labour nor the external form of its product necessarily make it “productive” or “unproductive”.  The same labour can be productive when I buy it as a capitalist, as a producer, in order to create more value, and unproductive when I buy it as a consumer, a sender of revenue, in order to consume its use-value, no matter whether this use-value perishes with the activity of the labour-power itself or materialises and fixes itself in an object.

The cook in the hotel produces a commodity for the person who as a capitalist has bought her labour—the hotel proprietor; the consumer of the mutton chops has to pay for her labour, and this labour replaces for the hotel proprietor (apart from profit) the fund out of which he continues to pay the cook.  On the other hand if I buy the labour of a cook for her to cook meat, etc., for me, not to make use of it as labour in general but to enjoy it, to use it as that particular concrete kind of labour, then her labour is unproductive, in spite of the fact that this labour fixes itself in a material product and could just as well (in its result) be a vendible commodity, as it in fact is for the hotel proprietor.  The great difference (the conceptual difference) however remains: the cook does not replace for me (the private person) the fund from which I pay her, because I buy her labour not as a value-creating element but purely for the sake of its use-value.  Her labour as little replaces for me the fund with which I pay for it, that is, her wages, as, for example, the dinner I eat in the hotel in itself enables me to buy and eat the same dinner again a second time.  This distinction however is also to be found between commodities.  The commodity which the capitalist buys to replace his constant capital (for example, cotton material, if he is a cotton printer) replaces its value in the printed cotton.  But if on the other hand he buys it in order to consume the cotton itself, then the commodity does not replace his outlay.

The largest part of society, that is to say the working class, must incidentally perform this kind of labour for itself; but it is only able to perform it when it has laboured “productively”.  It can only cook meat for itself when it has produced a wage with which to pay for the meat; and it can only keep its furniture and dwellings clean, it can only polish its boots, when it has produced the value of furniture, house rent and boots.  To this class of productive labourers itself, therefore, the labour which they perform for themselves appears as “unproductive labour”.  This unproductive labour never enables them ||310| to repeat the same unproductive labour a second time unless they have previously laboured productively.

Thirdly.  On the other hand: an entrepreneur of theatres, concerts, brothels, etc., buys the temporary disposal over the labour-power of the actors, musicians, prostitutes, etc.—in fact in a roundabout way that is only of formal economic interest; in its result the process is the same—he buys this so-called “unproductive labour”, whose “services perish in the very instant of their performance and do not fix or realise themselves “any permanent” (“particular” is also used) “subject or vendible commodity” (apart from themselves).  The sale of these to the public provides him with wages and profit.  And these services which he has thus bought enable him to buy them again; that is to say, they themselves renew the fund from which they are paid for.  The same is true for example of the labour of clerks employed by a lawyer in his office—except for the fact that these services as a rule also embody themselves in very bulky “particular subjects” in the form of immense bundles of documents.

It is true that these services are paid for to the entrepreneur out of the revenue of the public.  But it is no less true that this holds good of all products in so far as they enter into individual consumption.  It is true that the country cannot export these services as such; but it can export those who perform the services.  Thus France exports dancing masters, cooks, etc., and Germany schoolmasters.  With the export of the dancing master, or the schoolmaster, however, his revenue is also exported, while the export of dancing shoes and books brings a return to the country.

If therefore on the one hand a part of the so-called unproductive labour embodies itself in material use-values which might just as well be commodities (vendible commodities), so on the other hand a part of the services in the strict sense which assume no objective form—which do not receive an existence as things separate from those performing the services, and do not enter into a commodity as a component part of its value—may be bought with capital (by the immediate purchaser of the labour), may replace their own wages and yield a profit for him.  In short, the production of these services can be in part subsumed under capital, just as a part of the labour which embodies itself in useful things is bought directly by revenue and is not subsumed under capitalist production.

Fourthly.  The whole world of “commodities” can be divided into two great parts.  First, labour-power; second, commodities as distinct from labour-power itself.  As to the purchase of such services as those which train labour-power, maintain or modify it, etc., in a word, give it a specialised form or even only maintain it—thus for example the schoolmaster’s service, in so far as it is “industrially necessary” or useful; the doctor’s service in so far as he maintains health and so conserves the source of all values, labour-power itself—these are services which yield in return “a vendible commodity, etc.”, namely labour-power itself, into whose costs of production or reproduction these services enter.  Adam Smith knew however how little “education’ enters into the costs of production of the mass of working men.  And in any case the doctor’s services belong to the faux frais* of production.  They can be counted as the cost of repairs for labour-power.  Let us assume that wages and profit fell simultaneously in total value, from whatever cause (for example, because the nation had grown lazier), and at the same time in use value (because labour had become less productive owing to bad harvests, etc.), in a word, that the part of the product whose value is equal to the revenue declines, because less new labour has been added in the past year and because the labour added has been less productive.  If in such conditions capitalist and workman wanted to consume the same amount of value in material things as they did before, they would have to buy less of the services of the doctor, schoolmaster, etc.  And if they were compelled to continue the same outlay for both these services, then they would have to restrict their consumption of other things It is therefore clear that the labour of the doctor and the schoolmaster does not directly create the fund out of which they are paid, although their labours enter into the production costs of the fund which creates all values whatsoever—namely, the production costs of labour-power.

||311| Adam Smith continues:

“Thirdly, it seems, upon every supposition, improper to say, that the labour of artificers, manufacturers, and merchants, does not increase the real revenue of the society.  Though we should suppose, for example, as it seems to be supposed in this system, that the value of the daily, monthly, and yearly consumption of this class was exactly equal to that of its daily, monthly, and yearly production; yet it would not from thence follow, that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the society.  An artificer, for example, who, in the first six months after harvest, executes ten pounds worth of work, though he should, in the same time, consume ten pounds worth of corn, and other necessaries, yet really adds the value of ten pounds to the annual produce of the land and labour of the society.  While he has been consuming a half-yearly revenue of ten pounds worth of corn and other necessaries, he has produced an equal value of work, capable of purchasing, either to himself, or to some other person, an equal half-yearly revenue.  The value, therefore, of what has been consumed and produced during these six months, is equal, not to ten, but to twenty pounds.  It is possible, indeed, that no more than ten pounds worth of this value may ever have existed at any one moment of time.  But if the ten pounds worth of corn and other necessaries which were consumed by the artificer, had been consumed by a soldier, or by a menial servant, the value of that part of the annual produce which existed at the and of the six months, would have been ten pounds less than it actually is in consequence of the labour of the artificer.  Though the value of what the artificer produces, therefore, should not, at any one moment of time, be supposed greater than the value he consumes, yet, at every moment of time, the actually existing value of goods in the market is, in consequence of what he produces, greater than it otherwise would be” ([Wealth of Nations, O.U.P. edition, Vol. II, pp. 295-96], [Garnier], l.c., t. III, pp. 531-33).

Is not the [total] value of the commodities at any time in the market greater as a result of the “unproductive labour” than it would no without this labour?  Are there not at every moment of time in the market, alongside wheat and meat, etc., also prostitutes, lawyers, sermons, concerts, theatres, soldiers, politicians, etc.?  These lads or wenches do not get the corn and other necessaries or pleasures for nothing.  In return they give or pester us with their services, which as such services have a use-value and because of their production costs also an exchange-value.  Reckoned as consumable articles, there is at every moment of time, alongside the consumable articles existing in the form of goods, a quantity of consumable articles in the form of services.  The total quantity of consumable articles is therefore at every moment of time greater than it would be without the consumable services.  Secondly, however, the value too is greater; for it is equal to the value of the commodities which are given for these services, and is equal to the value of the services themselves.  Since here, as in every exchange of commodity for commodity, equal value is given for equal value, the same value is therefore present twice over, once on the buyer’s side and once on the seller’s.

<Adam Smith goes on to say in reference to the Physiocrats:

“When the patrons of this system assert, that the consumption of artificers, manufacturers, and merchants, is equal to the value of what they produce, they probably mean no more than that their revenue, or the fund destined for their consumption, is equal to it” (that is, to the value of what they produce) ([ibid., p. 296], [Garnier] l.c., p. 533).

In this the Physiocrats were right in relation to workmen and employers taken together, rent forming only a special category of the latter’s profit.>

||312| <Adam Smith notes on the same occasion—that is, in his criticism of the Physiocrats—Book IV, Chapter IX (edit. Garnier, t. III):

“The annual produce of the land and labour of any society can he augmented only in two ways; either, first, by some improvement in the productive powers of the useful labour actually maintained within it; or, secondly, by some increase in the quantity of that labour.  The improvement in the productive powers of useful labour depends, first, upon the improvement in the ability of the workman; and, secondly, upon that of tire machinery with which he works…  The increase in the quantity of useful labour actually employed within any society must depend altogether upon the increase of tire capital which employs it; and the increase of that capitol, a must be exactly equal to the amount of the savings from the revenue, either of the particular persons who manage and direct the employment of that capital, or of some other persons, who lend it to them” ([ibid., p. 297], [Garnier], pp. 534-35).

Here we have a double vicious circle.  First: the annual product is augmented by greater productivity of labour.  All means to augment this productivity (in so far as this is not due to accidents of nature such as a specially favourable season, etc.) require an increase of capital.  But in order to increase the capital, the annual product of labour must be increased.  First circle.  Secondly: the annual product can be augmented by an increase in the quantity of labour employed.  The quantity of labour employed, however, can only be increased if the capital which employs it is first increased.  Second circle.  Adam Smith helps himself out of both vicious circles with “savings”, by which he means in fact the transformation of revenue into capital.

To think of the whole profit as “revenue” for the capitalist is already in itself wrong.  The law of capitalist production requires on the contrary that a part of the surplus-labour, of the unpaid labour, performed by the workman should be transformed into capital.  When the individual capitalist functions as a capitalist—that is, as a functionary of capital—he himself may think of this as saving; but it also appears to him as a necessary reserve fund.  The increase of the quantity of labour does not however depend only on the number of workmen, but also on the length of the working-day.  The quantity of labour can therefore be increased without increasing the part of the capital that is converted into wages.  Similarly, on this assumption there would be no need to increase the machinery, etc. (although it would wear out more quickly; but this makes no difference).  The only thing that would have to be increased is the part of the raw material that resolves itself into seed, etc.  And it remains true that, taking a single country (excluding foreign trade), surplus-labour must first be applied to agriculture before it becomes possible in the industries which get their raw materials from agriculture.  A part of these raw materials, such as coal, iron, wood, fish, etc. (the last-named for example as manure), in a word, all fertilisers other than animal manures, can be got by merely increasing the labour (the number of labourers remaining the same).  There can therefore be no lack of these.  On the other hand it has been shown above that the increase of productivity in its origin always presupposes merely the concentration of capital, not the accumulation of capital.  Later however each process supplements the other.>

<The reason why the Physiocrats preached laissez faire, laissez passer, in short, free competition, is correctly stated in the following passages from Adam Smith:

“The trade which is carried on between these two different sets of people” (country and town) “consists ultimately in a certain quantity of rude produce exchanged for a certain quantity of manufactured produce.  The dearer the latter, therefore, the cheaper the former; and whatever tends in any country to raise the price of manufactured produce, tends to lower that of the rude produce of the land, and thereby to discourage agriculture.”

But all fetters and restrictions placed on manufactures and foreign trade make manufactured commodities, etc., dearer.  Therefore, etc.  (Smith, [ibid., p.308] [Garnier trans], l.c., pp. 554-56).

***

||313| Smith’s second view of “productive” and “unproductive labour”—or rather the view that is interwoven with his other view—therefore amounts to this: that the former is labour which produces commodities, and the latter is labour which does not produce “any commodity”.  He does not deny that the one kind of labour, equally with the other, is a commodity.  See above: “The labour of the latter …has its value, and deserves its reward as well as that of the former” (that is, from the economic standpoint; there is no question of moral or other standpoints in the case of either the one or the other kind of labour).  The concept commodity however implies that labour embodies, materialises, realises itself in its product.  Labour itself, in its immediate being, in its living existence, cannot be directly conceived as a commodity, but only labour-power, of which labour itself is the temporary manifestation.  Just as it is only in this way that wage-labour in the true sense can be explained, so it is with “unproductive labour”, which Adam Smith throughout defines by the costs of production required to produce the “unproductive labourer”.  A commodity must therefore be conceived as something different from labour itself.  Then, however, the world of commodities is divided into two great categories:

On one side, labour-power.

On the other side, commodities themselves.

The materialisation, etc., of labour is however not to be taken in such a Scottish sense as Adam Smith conceives it.  When we speak of the commodity as a materialisation of labour—in the sense of its exchange-value—this itself is only an imaginary, that is to say, a purely social mode of existence of the commodity which has nothing to do with its corporeal reality; it is conceived as a definite quantity of social labour or of money.  It may be that the concrete labour whose result it is leaves no trace in it.  In manufactured commodities this trace remains in the outward form given to the raw material.  In agriculture, etc., although the form given to the commodity, for example wheat or oxen and so on, is also the product of human labour, and indeed of labour transmitted and added to from generation to generation, yet this is not evident in the product.  In other forms of industrial labour the purpose of the labour is not at all to alter the form of the thing, but only its position.  For example, when a commodity is brought from China to England, etc., no trace of the labour involved can be seen in the thing itself (except for those who call to mind that it is not an English product).  Therefore the materialisation of labour in the commodity must not be understood in that way.  (The mystification here arises from the fact that a social relation appears in the form of a thing).

It remains true, however, that the commodity appears as past, objectivised labour, and that therefore, if it does not appear in the form of a thing, it can only appear in the form of labour-power itself; but never directly as living labour itself (except only in a roundabout way which in practice seems the same, but whose significance lies in the determination of different rates of wages).  Productive labour would therefore be such labour as produces commodities or directly produces, trains, develops, maintains or reproduces labour-power itself.  Adam Smith excludes the latter from his category of productive labour; arbitrarily, but with a certain correct instinct—that if he included it, this would open the flood-gates for false pretensions to the title of productive labour.

In so far therefore as we leave labour-power itself out of account, productive labour is labour which produces commodities, material products, whose production has cost a definite quantity of labour or labour-time.  These material products include all products of art and science, books, paintings, statues, etc., in so far as they take the form of things.  In addition, however, the product of labour must be a commodity in the sense of being “some vendible commodity”, that is to say, a commodity in its first form, which has still to pass through its metamorphosis.  (A manufacturer may himself construct a machine if he cannot get one built anywhere else, not to sell it but to make use of it as a use-value.  However, he then wears it out as a part of his constant capital and so sells it piecemeal in the form of the product which it has helped to make.)

||314| Certain labours of menial servants may therefore equally well take the form of (potential) commodities and even of the same use-values considered as material objects.  But they are not productive labour, because in fact they produce not “commodities” but immediate “use-values”.  As for labours which are productive for their purchaser or employer himself—as for example the actor’s labour for the theatrical entrepreneur—the fact that their purchaser cannot sell them to the public in the form of commodities but only in the form of the action itself would show that they are unproductive labours.

Apart from such cases, productive labour is such as produces commodities, and unproductive labour is such as produces personal services.  The former labour is represented in a vendible thing; the latter must be consumed while it is being performed.  The former includes (except for that labour which creates labour-power itself) all material and intellectual wealth—meat as well as books—that exists in the form of things; the latter covers all labours which satisfy any imaginary or real need of the individual—or even those which are forced upon the individual against his will.

The commodity is the most elementary form of bourgeois wealth.  The explanation of “productive labour” as labour which produces “commodities” also corresponds, therefore, to a much more elementary point of view than that which defines productive labour as labour which produces capital.

Adam Smith’s opponents have disregarded his first, pertinent definition, and instead have concentrated on the second, pointing out the unavoidable contradictions and inconsistencies to which it gives rise.  And their attacks were made all the easier for them by their insistence on the material content of the labour, and particularly the specific requirement that the labour must fix itself in a more or less permanent product.  We shall see in a moment what it was that particularly gave rise to the polemics.

But first this further point.  Adam Smith says of the Physiocratic system that its great merit is that it represented the wealth of nations as consisting

“not in the unconsumable riches of money, but in the consumable goods annually produced by the labour of the society”( [Wealth of Nations, O.U.P. edition, p. 299], [Garnier] t. III, l. IV, ch. IX, p. 538).

Here we have a deduction of his second definition of productive labour.  The definition of surplus-value naturally depended on the form in which value itself was conceived.  In the Monetary and Mercantile systems it is therefore presented as money; by the Physiocrats, as the produce of the land, as agricultural product; finally in Adam Smith’s writings as commodity in general.  In so far as the Physiocrats touch on the substance of value, they resolve it entirely into pure use-value (matter, corporeal object), just as the Mercantilists resolve it into the pure form of value, the form in which the product makes itself manifest as general social labour: money.  With Adam Smith, both conditions of the commodity—use-value and exchange-value—are combined; and so all labour is productive which manifests itself in any use-value, any useful product.  That it is labour that manifests itself in the product already implies that the product is equal to a definite quantity of general social labour.  As against the Physiocrats, Adam Smith re-establishes the value of the product as the essential basis of bourgeois wealth; but on the other hand he divests value of the purely fantastic form—that of gold and silver—in which it appeared to the Mercantilists.  Every commodity is in itself money.  It must be recognised that at the same time Adam Smith also falls back more or less into the Mercantilist conception of “permanency”—in fact, inconsumability.  We can recall the passage in Petty (see my first volume, p. 109, where I quote from Petty’s Political Arithmetick) where wealth is valued according to the degrees in which it is imperishable, more or less permanent, and finally gold and silver are set above all other things as wealth that is “not perishable”.

Adolphe Blanqui (Histoire de l’économie politique, Bruxelles, 1839, p.152) says [of Adam Smith]:

“In restricting the sphere of wealth exclusively to those values which are embodied in material substances, he erased from the book of production the whole boundless mass of immaterial values, daughters of the moral capital of civilised nations,” etc.

[5.  Vulgarisation of Bourgeois Political Economy in the Definition of Productive Labour]

The polemics against Adam Smith’s distinction between productive and unproductive labour were for the most part confined to the dii minorum gentium* (among whom moreover Storch was the most important); they are not to be found in the work of any economist ||315| of significance—of anyone of whom it can be said that he made some discovery in political economy.  They are, however, the hobby-horse of the second-rate fellows and especially of the schoolmasterish compilers and writers of compendia, as well as of dilettanti with facile pens and vulgarisers in this field.  What particularly aroused these polemics against Adam Smith was the following circumstance.

The great mass of so-called “higher grade” workers—such as state officials, military people, artists, doctors, priests, judges, lawyers, etc.—some of whom are not only not productive but in essence destructive, but who know how to appropriate to themselves a very great part of the “material” wealth partly through the sale of their “immaterial” commodities and partly by forcibly imposing the latter on other people—found it not at all pleasant to be relegated economically to the same class as clowns and menial servants and to appear merely as people partaking in the consumption, parasites on the actual producers (or rather agents of production).  This was a peculiar profanation precisely of those functions which had hitherto been surrounded with a halo and had enjoyed superstitious veneration.  Political economy in its classical period, like the bourgeoisie itself in its parvenu period, adopted a severely critical attitude to the machinery of the State, etc.  At a later stage it realised and—as was shown too in practice—learnt from experience that the necessity for the inherited social combination of all these classes, which in part were totally unproductive, arose from its own organisation.

In so far as those “unproductive labourers” do not produce entertainment, so that their purchase entirely depends on how the agent of production cares to spend his wages or his profit—in so far on the contrary as they are necessary or make themselves necessary because of physical infirmities (like doctors), or spiritual weakness (like parsons), or because of the conflict between private interests and national interests (like statesmen, all lawyers, police and soldiers)—they are regarded by Adam Smith, as by the industrial capitalists themselves and the working class, as incidental expenses of production, which are therefore to be cut down to the most indispensable minimum and provided as cheaply as possible.  Bourgeois society reproduces in its own form everything against which it had fought in feudal or absolutist form.  In the first place therefore it becomes a principal task for the sycophants of this society, and especially of the upper classes, to restore in theoretical terms even the purely parasitic section of these “unproductive labourers”, or to justify the exaggerated claims of the section which is indispensable.  The dependence of the ideological, etc., classes on the capitalists was in fact proclaimed.

Secondly, however, a section of the agents of production (of material production itself) were declared by one group of economists or another to be “unproductive”.  For example, the landowner, by those among the economists who represented industrial capital (Ricardo).  Others (for example Carey) declared that the merchant in the true sense of the word was an “unproductive” labourer.  Then even a third group came along who declared that the “capitalists” themselves were unproductive, or who at least sought to reduce their claims to material wealth to “wages”, that is, to the wages of a “productive labourer”.  Many intellectual workers seemed inclined to share the scepticism in regard to the capitalist.  It was therefore time to make a compromise and to recognise the “productivity” of all classes not directly included among the agents of material production.  One good turn deserves another; and, as in the Fable of the Bees, it had to be established that even from the “productive”, economic standpoint, the bourgeois world with all its “unproductive labourers” is the best of all worlds.  This was all the more necessary because the “unproductive labourers” on their part were advancing critical observations in regard to the productivity of the classes who in general were “fruges consumere nati”*; or in regard to those agents of production, like landowners, who do nothing at all, etc.  Both the do-nothings and their parasites had to be found a place in this best possible order of things.

Thirdly: As the dominion of capital extended, and in fact those spheres of production not directly related to the production of material, wealth became also more and more dependent on it— especially when the positive science (natural sciences) were subordinated to it as serving material production— ||316| the sycophantic underlings of political economy felt it their duty to glorify and justify every sphere of activity by demonstrating that it was “linked” with the production of material wealth, that it was a means towards it; and they honoured everyone by making him a “productive labourer” in the “primary” sense, namely, a labourer who labours in the service of capital, is useful in one way or another to the enrichment of the capitalist, etc.

In this matter even such people as Malthus are to be preferred, who directly defend the necessity and usefulness of “unproductive labourers” and pure parasites.

[6.  Advocates of Smith’s Views on Productive Labour.  On the History of the Subject]

[(a) Advocates of the First View: Ricardo, Sismondi]

It is not worth the trouble to examine in detail the inanities of Germain Garnier (Smith’s translator), the Earl of Lauderdale, Brougham, Say, Storch, and later Senior, Rossi, and so on, in regard to this question.  We shall cite only a few characteristic passages.

But first a passage from Ricardo, in which he shows that it is much more advantageous for the “productive labourers” when the owners of surplus-value (profit, rent) consume it in “unproductive labourers” (as menial servants, for instance) than in luxury products produced by the “productive labourers.

<Sismondi, Nouveaux principes, t. I, p. 148, accepts the correct statement of Smith’s distinction (as also of course does Ricardo): the real distinction between productive and unproductive classes is:

“The one always exchanges its labour against the capital of a nation; the other always exchanges it against a part of the national revenue.”

Sismondi—likewise following Adam Smith—on surplus-value:

“Although the labourer, by his daily labour, may have produced much more than his daily outlay, after sharing with the landowner and the capitalist what remains for him is seldom much beyond what is strictly necessary for his existence” (Sismondi, Nouveaux principes, etc., t. I, p. 87).

Ricardo says:

“If a landlord, or a capitalist, expends his revenue in the manner of an ancient baron, in the support of a great number of retainers, or menial servants, he will give employment to much more labour, than if he expended it on fine clothes, or costly furniture; on carriages, on horses, or in the purchase of any other luxuries.  In both cases the net revenue would be the same, and so would he the gross revenue, but the former would be realised in different commodities.  If my revenue were 10,000 l., the same quantity nearly of productive labour would be employed, whether I realised it in fine clothes and costly furniture, etc.,etc,, or in a quantity of food and clothing of the same value.  If, however, I realised my revenue in the first set of commodities no more labour would be consequently employed:— I should enjoy my furniture and my clothes, and there would be an end of them; but if I realised my revenue in food and clothing, and my desire was to employ menial servants, all those whom I could so employ with my revenue of 10,000 l., or with the food and clothing which it would purchase, would be to be added to the former demand for labourers, and this addition would take place only because I chose this mode of expending my revenue.  As the labourers, then, are interested in the demand for labour, they must naturally desire that as much of the revenue as possible should be diverted from expenditure on luxuries, to be expended in the support of menial servants” ([David ] Ricardo, [On the] Principles [of Political Economy, and Taxation,] third edition, [London,] 1821, pp. 475-76).

[(b) Early Attempts to Distinguish between Productive and Unproductive Labour (D’Avenant, Petty)]

D’Avenant quotes from an old statistician, Gregory King, a list entitled Scheme of the Income and Expense of the Several Families of England, calculated for the year 1688.  In this, the erudite King divides the whole nation into two main classes: “Increasing the Wealth of the Kingdom—2,675,520 heads”, and “Decreasing the Wealth of the Kingdom—2,825,000 heads”; thus the former is the “productive” class, the latter the “unproductive”.  The “productive” class consists of Lords, Baronets, Knights, Esquires, Gentlemen, Persons in Office and Places, merchants in oversea trade, Persons in the Law, Clergymen, freeholders, farmers, persons in liberal arts and sciences, shopkeepers and tradesmen, artisans and handicrafts, Naval Officers, Military Officers.  As against these, the “unproductive” class consists of: common seamen, labouring people and out servants (these are agricultural labourers and day wage-labourers in manufacture), cottagers (who in D’Avenant’s time were still a fifth of the total English population), ||317| common soldiers, paupers, gipsies, thieves, beggars and vagrants generally.  D’Avenant explains this list of ranks prepared by the learned King as follows:

“By which he means, That the First Class of the People, from Land, Arts and Industry, maintain themselves, and add every Year something to the Nation’s General Stock; and besides this, out of their Superfluity, contribute every Year so much to the maintenance of Others.  That of the Second Class, some partly maintain themselves by Labour […] but that the rest, as most of the Wives and Children of these, […] are nourish’d at the Cost of Others; and are a Yearly Burthen to the Publick, consuming Annuallv so much as would be otherwise added to the Nation’s General Stock” (D’Avenant, An Essay upon the Probable Methods of Making a People Gainers in the Ballance of Trade, London, 1699, p. 50).

In addition to this, the following passage from D’Avenant is rather characteristic of the views of the Mercantilists on surplus-value:

It is “… the Exportation of our own Product that must make England rich; to he Gainers in the Ballance of Trade, we must carry out of our own Product, what will purchase the Things of Foreign Growth that are needful for our own Consumption, with some Overplus either in Bullion or Goods to he sold in other Countries; which Overplus is the Profit a Nation makes by Trade, and it is more or less according to the natural Frugality of the People that Export,” (a frugality which the Dutch have, but not the English—l.c., pp. 46-47) “or as from the low Price of Labour and Manufacture they can afford the Commodity cheap, and at a rate not to be under-sold in Foreign Markets” (D’Avenant, l.c., pp. 45-46).

<“… by what is Consum’d at Home, one loseth only what another gets, and the Nation in General is not at all the Richer; but all Foreign Consumption is a clear and certain Profit” (An Essay on the East-India Trade, etc., London, 1697).  [In D’Avenant, Discourses on the Publick Revenues, and on the Trade of England… Part II, London, 1698, p. 31.]>

<This work printed in the form of an appendix to another work of D’Avenant’s, which he tries to defend, is not the same as the Considerations on the East-India Trade, 1701, quoted by McCulloch.>

Incidentally, it must not be thought that these Mercantilists were as stupid as they were made out to be by the later Vulgar-Freetraders.  In Volume II of his Discourses on the Publick Revenues, and on the Trade of England, etc., London, 1698, D’Avenant says among other things:

“Gold and Silver are indeed the Measure of Trade, but the Spring and Original of it, in all Nations, is the Natural, or Artificial Product of the Country, that is to say, what their Land, or what their labour and Industry produces.  And this is so true, that a Nation may be suppos’d, by some Accident, quite without the Species of Money, and yet, if the People are numerous, industrious, vers’d in Traffick, skill’d in Sea-Affairs, and if they have good Ports, and a Soil fertile in variety* of Commodities, such a people will have Trade, […] and, they shall quickly get among ‘em, a plenty of Gold and Silver**: So that the real and effective Riches of a Country, is its Native Product” (p.45).  “Gold and Silver are so far from being […] the only Things that deserve the name of Treasure, or the Riches of a Nation that in truth, Money is at Bottom no more than the Countries with which Men in their dealings have been accustom’d to reckon (p. 46).  “We understand that to be Wealth which maintains the Prince, and the general Body of his People, in Plenty, Ease and Safety.  We esteem that to be Treasure which for the use of Man has been converted from Gold and Silver, into Buildings and Improvements of the Country.  As also other Things convertible into those Metals, as the Fruits of the Earth, Manufactures or Foreign Commodities and stock of Shipping … even perishable Goods, may be he1d the Riches of a Nation, if they are convertible, tho’not converted into Gold and Silver; and this we believe does not only hold between Man and Man, […] but between one Country and another” (pp. 60-64).  “The Common People being the Stomach of the Body Politick, […] that Stomach” in Spain did not take the money as it should have done, ||318| and failed to digest it.  … “Trade and Manufactures are the only Mediums by which such a digestion and distribution of Gold and Silver can be made, as will be Nutritive to the Body Politick” (pp. 62-63).

Moreover, Petty too had the conception of productive labourers (though he also includes soldiers):

“Husbandmen, Seamen, Soldiers, Artizans and Merchants, are the very Pillars of any Common-Wealth: all the other great Professions, do rise out of the infirmities and miscarriages of these; now the Seaman is three of these four” (navigator, merchant, soldier) ([William Petty,] Political Arithmetick, etc. [in Several Essays in Political Arithmetick], London, 1699, p. 177).  “… the Labour of Seamen, and Freight of Ships, is always of the nature of an Exported Commodity, the overplus whereof, above what is Imported, brings home Money, etc.” (p. 179).

In this connection Petty also explains the advantages of the division of labour:

“Those who have the command of the Sea-Trade, may Work at easier Freight with more profit, than others at greater:” (higher freight charges) “for a Cloth must be cheaper made, when one” etc., “another” etc. “so those who command the Trade of Shipping, can build “ different sorts of vessels for different purposes, “one sort of vessels for the turbulent Sea, another for Inland Waters and Rivers … one sort for War … another for Burthen”, etc.  … And this “is” the chief of several Reasons, why the Hollanders can go at less Freight than their Neighbours, viz., because they can afford a particular sort of Vessels for each particular Trade”* (l.c., pp. 179-80).

Here too Petty strikes quite a Smithian note when he continues:

If taxes are taken from industrialists, etc., in order to give [money] to those who in general are occupied in ways “which produce no material thing, or things of real use and value in the Commonwealth:  In this case, the Wealth of the Publick will be diminished:  Otherwise than as such Exercises, are Recreations and Refreshments of the mind; and which being moderately used, do qualify and dispose Men to what in it self is more considerable” (l.c., p. 198).  After computing how many people are needed for industrial work “…The Remainder […] may safely and without possible prejudice to the Commonwealth, be employed in the Arts and Exercises of Pleasure and Ornament: the greatest whereof is the improvement of natural Knowledge” (l.c., p. 199).  “There is much more to be gained by Manufacture than Husbandry; and by Merchandize than Manufacture…” (l.c., p. 172).  “… a Seaman is in effect three Husbandmen…“ (p. 178).  |VII-318||

***

||VIII-346| Petty, Surplus-Value.  In one passage of Petty’s there can be seen an anticipation of the nature of surplus-value, although he treats it only in the form of rent.  Especially when it is put alongside the following passage, in which he determines the relative value of silver and corn by the relative quantities of each that can be produced in the same labour-time.

“If a man can bring to London an ounce of Silver out of the Earth in Peru, in the same time that he can produce a Bushel of Corn, then one is the natural price of the other; now if by reason of new and more easier Mines a man can get two ounces of Silver as easily as formerly he did one, then Corn will be as cheap at ten shillings the Bushel, as it was before five shillings, caeteris paribus*.”

“…let a hundred men work ten years upon Corn, and the same number of men the same time, upon Silver; I say, that the neat proceed of the Silver is the price of the whole neat proceed of the Corn, and like parts of the one, the price of like parts of the other.”

“Corn will be twice as dear where** are two hundred Husbandmen to do the same work which an hundred could perform…” ( [William Petty], On Taxes and Contributions, 1662) (in the edit. of 1679, pp. 32, 24, 67).

The passages to which I alluded above are the following:

“… as Trades and curious Arts increase; so the Trade of Husbandry will decrease, or else the Wages of Husbandmen must rise, and consequently the Rents of Lands must fall” (p. 193).

“… if Trade and Manufacture have increased in England … if a greater part of the People, apply themselves to those Faculties, than there did heretofore, and if the price of Corn he no greater now, than when Husbandmen were more numerous, and the Tradesmen fewer: it follows from that single reason .., that the Rents of Land must fall: As for Example, suppose the price of Wheat be 5s. or 60d. the Bushel; now if the Rent of the Land whereon it grows be the third Sheaf”; (i.e., part, share) “then of the 60d. 20d. is for the Land, and 40d, for the Husbandman; but if the Husbandman’s wages should rise one-eighth part, or from 8d. to 9d. per Diem,*** then the Husbandman’s share in the Bushel of Wheat rises from 40d. to 45d. and consequently the Rent of the Land must fall from 20d. to 45d. for we suppose the price of the Wheat still remains the same; especially since we cannot raise it, for if we did attempt it, Corn would be brought in to us, ||347| (as into Holland) from Foreign Parts, where the State of Husbandry was not changed.” ([William Petty], Political Arithmetick [in Several Essays in Political Arithmetick], London, 1699, pp. 493-94.) |VIII—347||

***

||VIII-364| <Petty.  The following passage, where rent in general is treated as a surplus-value, a net product, should be compared with the one quoted above from Petty:

“Suppose a man could with his own hands plant a certain scope of land with Corn, that is, could Dig, or Plough: Harrow, Weed, Reap, Carry home, Thresh, and Winnow so much as the Husbandry of this Land required […].  I say, that when this man hath subducted his seed out of the proceed of his Harvest, and also what himself hath both eaten and given to others in exchange for Clothes, and other Natural necessaries; that the Remainder of Corn is the natural and true Rent of the Land for that year; and the medium of seven years, or rather of so many years as makes up the Cycle, within which Dearths and Plenties make their revolution, doth give the ordinary Rent of the Land in Corn.  But a further, though collateral question may he, how much English money this Corn or Rent is worth; I answer so much as the money, which another single man can save, within the same time, over and above his expense, if he imployed himself wholly to produce and make it; viz. Let another man go travel into a Countrey where is Silver, there Dig it, Refine it, bring it to the same place where the other man planted his Corn; Coyne it, etc. the same person, all the while of his working for Silver, gathering also food for his necessary livelihood, and procuring himself covering, etc.  I say, the Silver of the one must he esteemed of equal value with the Corn of the other” (Traité des taxes, pp. 23-24).  [William Petty, A Treatise of Taxes, and Contributions…, London, 1662, pp. 23-24.  Marx quotes the passage from Charles Ganilh, Des Systeme d’économie politique…, t. II, Paris, 1821, pp. 36-37.]> |VIII-364||

[(c) John Stuart Mill, an Adherent of Smith’s Second View of Productive Labour]

||VII-318| Mr. John Stuart Mill, in Essays on Some Unsettled Questions of Political Economy, London, 1844, also struggled with the problem of productive and unproductive labour; but in so doing he in fact added nothing to Smith’s (second) definition except that labours which produce labour-power itself are also productive.

“Sources of enjoyment may he accumulated and stored up; enjoyment itself cannot.  The wealth of a country consists of the sum total of the permanent sources of enjoyment, whether material or immaterial, contained in it; and labour or expenditure which tends to augment or keep up these permanent sources, should, we conceive, be termed productive” (l.c., p. 82).  “If the mechanic who made the spinning-jenny laboured productively, the spinner also laboured productively when he was learning his trade: and what they both consumed productively, that is to say, its consumption did not tend to diminish, but to increase the sum of the permanent sources of enjoyment in the country, by effecting a new creation of those sources, more than equal to the amount of the consumption” (l.c., p. 83).

***

We will now briefly run over the twaddle written against Adam Smith in connection with productive and unproductive labour.

[7.]  Germain Garnier [Vulgarisation of the Theories Put Forward by Smith and the Physiocrats]

||319| The fifth volume [contains Garnier’s] Notes to his translation of Smith’s Wealth of Nations (Paris, 1802).

On “productive labour” in the highest sense Garnier shares the view of the Physiocrats; he only makes it somewhat weaker.  He opposes Smith’s view that “productive labour .., is that which realises itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past” ([Garnier] 1.c., t. V, p. 169).  |VII-319||

[(a) Confusion of Labour which Is Exchanged Against Capital with Labour Exchanged against Revenue.  The False Conception that the Total Capital Is Replaced through the Revenue of the Consumers]

||VIII-347| (Germain Garnier).  He brings forward various arguments against Adam Smith (which are in part repeated by later authors).

First.

“This distinction is false, inasmuch as it is based on a difference which does not exist.  All labour is productive in the sense in which the author uses this word productive, The labour of the one as of the other of these two classes is equally productive of some enjoyment, commodity or utility for the person who pays for it, otherwise this labour would not find wages.”

<It is therefore productive because it produces some use-value and is sold, has an exchange-value, and is thus itself a commodity.>

In developing this point, however, Garnier cites examples by way of illustration, in which the “unproductive labourers” do the same thing, produce the same use-value or the same kind of use-value as the “productive”.  For example:

“The servant who is in my service, who lights my fire, who dresses my hair, who cleans and keeps in order my clothes and my furniture, who prepares my food, etc., performs services absolutely of the same kind as the laundress or the seamstress who cleans and keeps in order her customers’ Linen: as the eating-house keeper, cook-shop proprietor or publican who carries on his trade of preparing food for persons whom it suits better to come and dine with him; as the barber, the hairdresser” (for Adam Smith, however, most of these fellows are as little reckoned among productive workers as the servants) “who perform immediate services; finally as the mason, the tiler, joiner, the glazier, the stove setter […], etc., and the multitude of building labourers who come when they are called to carry out restorations and repairs, and whose annual income depends as much on simple repair and maintenance work as on new construction.”

(Adam Smith nowhere says that the labour which fixes itself in a more or less permanent object cannot be equally well repairs as the making of new things.)

“This kind of labour consists less in producing than in maintaining; its aim is less to add to the value of the subjects to which it is applied than to prevent their decay.  All these labourers, including the servants, so ye the person who pays them the labour of maintaining his own things… “

(They can therefore be regarded as machines for maintaining value, or rather use-values.  Destutt de Tracy also asserts this view of the “saving” of labour.  See further on.  The unproductive labour of one does not become productive by saving the other unproductive labour.  One of the two performs it.  A part of Adam Smith’s unproductive labour—but only the part which is absolutely necessary in order to consume things, which so to speak belongs to the costs of consumption (and then, too, only when it saves this time for a productive worker)—becomes necessary as a result of the division of labour.  But Adam Smith does not deny this “division of labour”.  If everyone had to perform productive and unproductive labour, and through the dividing up of these kinds of labour between two persons both were better performed, according to Adam Smith this would in no way alter the circumstance that one of these labours is productive and the other unproductive.)

“It is for that and for that alone that they most often labour” (for one person to save the labour of looking after himself, ten have to look after him—a curious way of “saving” labour; besides “unproductive labour” of this kind is most often made use of by those who do nothing); “thus, either they are all productive, or none of them is productive” (l.c., p.172).

||348| Secondly.  A Frenchman cannot forget the ponts et chaussées.* Why, he says, call productive

“the labour of an inspector or director of a private enterprise in trade or manufacture, and non-productive, the labour of the government official who, watching over the upkeep of public highways, of navigable canals and ports, of monies and other important instruments destined to enliven commercial activity, watching over the security of transport and communications, the carrying out of conventions, etc., can with justice be regarded as the inspector of the great social manufacture? It is labour of absolutely the same nature, though on a vaster scale” (pp. 172-73).

In so far as such a lad takes part in the production (or conservation and reproduction) of material things which could be sold were they not in the hands of the State, Smith might call his labour “productive”.  “Inspectors of the great social manufacture” are purely French creations.

Thirdly.  Here Garnier falls into “moralising”.  Why should the “manufacturer of perfumery, who flatters my sense of smell”, be productive and not the musician, who “enchants my ear”?  (p. 173).  Smith would reply: because the former supplies a material product and the latter does not.  Morals and the “merits” of the two lads have nothing to do with the distinction.

Fourthly.  Is it not a contradiction that the “violin maker, the organ builder, the music dealer, the mechanic, etc.”, are productive, and the professions for which these labours are only “preparations” are unproductive?

“All of them have, as the final aim of their labour, a consumption of the same kind.  If the result which some of them have in view does not deserve to be counted among the products of the labour of society, why should one treat more favourably what is nothing but a means for attaining this result?”(l.c., p. 173).

On this reasoning, a man who eats corn is just as productive as the man who produces it.  For with what aim is corn produced?  In order to eat it.  So if the labour of eating is not productive, why should the labour of cultivating corn be productive, since it is only a means for attaining this aim?  Besides, the man who eats produces brain, muscles, etc., and are these not just as worthy products as barley or wheat?—an indignant friend of humanity might ask Adam Smith.

In the first place, Adam Smith does not deny that the unproductive labourer produces a product of some sort.  Otherwise he would not be a labourer at all.  Secondly, it may seem strange that the doctor who prescribes pills is not a productive labourer, but the apothecary who makes them up is.  Similarly the instrument maker who makes the fiddle, but not the musician who plays it.  But that would only show that “productive labourers” produce products which have no purpose except to serve as means of production for unproductive labourers.  Which however is no more surprising than that all productive labourers, when all is said and done, produce firstly the means for the payment of unproductive labourers, and secondly, products which are consumed by those who do not perform any labour.

Of all these comments, No. II is that of a Frenchman who can’t forget his ponts et chaussées; No. III amounts only to morals; No. IV either contains the stupidity that consumption is just as productive as production <which is not true in bourgeois society, where one produces and another consumes> or that some productive labour merely produces the material for unproductive labour, which Adam Smith nowhere denies.  Only No. I contains the correct point that Adam Smith, by his second definition, calls the same kinds of labour ||349| productive and unproductive—or rather that according to his own definition he would have to call a relatively small part of his “unproductive” labour productive; a point therefore that does not tell against the distinction, but against the subsumption of certain activities under the distinction or the way it is applied.  After making all these comments, the learned Garnier finally comes to the point.

“The only general difference that can, it seems, be observed between […] the two classes assumed by Smith, is that in the class which he calls productive, there is or may always be some intermediary person between the maker of the object and the person who consumes it; whereas in the labour that he calls non-productive, there cannot be any intermediary, and the relation between the labourer and the consumer is necessarily direct and immediate.  It is evident that there is necessarily a direct and immediate relation between the person who uses the experience of the physician, the skill of the surgeon, the knowledge of the lawyer, the talent of the musician or actor, or finally the services of the domestic servant, and each of these different hired workers at the moment of their labour; while in the professions constituting the other class, the thing to be consumed being material and palpable, it can be the subject of many intermediary exchanges after leaving the person who makes it before it reaches the one who consumes it” (p. 174).

In these last words Garnier shows, in spite of himself, the concealed association of ideas that exists between Smith’s first distinction (labour which is exchanged against capital, and labour which is exchanged against revenue) and his second (labour which fixes itself in a material, vendible commodity and labour which does not so fix itself).  The latter by its nature cannot for the most part be subordinated to the capitalist mode of production; the former can.  To say nothing of the fact that on the basis of capitalist production, where the great majority of material commodities—material and palpable things—is produced by wage-labourers under the domination of capital, [unproductive] labours (or services, whether those of a prostitute or of the Pope) can only be paid for either out of the wages of the productive labourers, or out of the profits of their employers (and the partners in those profits), quite apart from the circumstances that those productive labourers produce the material basis of the subsistence, and consequently, the existence, of the unproductive labourers.  It is however characteristic of this shallow French cur that he, who wants to be an expert in political economy and so an explorer of capitalist production, considers inessential the feature which makes this production capitalist—the exchange of capital for wage-labour instead of the direct exchange of revenue for wage-labour or the revenue which the labourer directly pays to himself.  By so doing Garnier makes capitalist production itself an inessential form instead of a necessary—though only historically, that is, transiently necessary —form for the development of the social productive powers of labour and the transformation of labour into social labour.

“… it would also always be necessary to deduct from his productive class all labourers whose labour consists purely of cleaning, conserving or repairing finished articles, and consequently does not put any new product into circulation” (p. 175).

(Smith nowhere says that the labour or its product must enter into the circulating capital.  It can enter directly into fixed capital, like the mechanic’s labour repairing a machine in a factory.  But in this case its value enters into the circulation of the product, the commodity.  And the repairers, etc., who do this labour as servants, do not exchange ||350| their labour against capital but against revenue.)

“It is in consequence of this difference that the non-productive class, as Smith has observed, subsists only on revenues.  In fact, since this class allows of no intermediary between itself and the consumer of its products, that is to say, the person who enjoys its labour, it is paid immediately by the consumer; and he pays only from revenues.  As against these, the labourers of the productive class, being as a rule paid by an intermediary who intends to make a profit from their labour, are most often paid by capital.  But this capital is always in the end replaced by the revenue of a consumer, otherwise it would not circulate and therefore would not yield any profit to its possessor.“

This last “but” is quite childish.  In the first place, a part of the capital is replaced by capital and not by revenue, whether this part of the capital circulates or does not circulate (as in the case of seed).

[(b) Replacement of the Constant Capital by Means of the Exchange of capital against Capital]

When a coal-mine supplies coal to an ironworks and gets from the latter iron which enters into the operations of the coal-mine as means of production, the coal is in this way exchanged for capital to the amount of the value of this iron, and reciprocally the iron, to the amount of its own value, is exchanged as capital for coal.  Both (considered as use-values) are products of new labour, although this labour was produced with means of labour that were already in existence.  But the value of the product of the year s labour is not the product of the labour [newly added] in the year.  It also replaces the value of the past labour which was materialised in the means of production.  Therefore the part of the total product which is equal to this value is not a part of the product of the year’s labour, but the reproduction of past labour.

Let us take for example the product of the daily labour of a coal-mine, an ironworks, a timber producer and a machine-building factory.  Let the constant capital in all these industries be equal to one-third of all the component parts of value in the product: that is, let the proportion of pre-existing labour to living labour be 1 : 2.  Then all these industries produce each a daily product of x, x', x'', x'''.  These products are certain quantities of coal, iron, timber and machinery.  As such products, they are products of the day’s labour (but also of the daily consumed raw materials, fuel, machinery, etc., which have all contributed to the day’s production).  Let the values of these be equal to z, z', z'', z'''.  These values are not the product of the day’s labour, since z/3, z'/3, z''/3, z'''/3 are only equal to the value which the constant elements of z, z', z'', z''' had before they entered into the day’s labour.  Therefore also x/3, x'/3, x''/3, x'''/3, or a third part of the use values produced, represent only the value of the pre-existing labour and continually replace it.  <The exchange which here takes place between pre-existing labour and the product of living labour is of quite a different nature from the exchange between labour-power and the conditions of labour existing as capital.>

x=z; yet z is the value of the total x, but one-third of z is equal to the value of the raw material, etc., contained in the total x, Thus is a part of the day’s product of the labour <but not at all the product of the day’s labour, but on the contrary of the previous pre-existing labour combined with it> in which the preexisting labour combined with the day’s labour reappears and is replaced.  Now it is true that each aliquot part of x, which is simply the quantity of actual products (iron, coal, etc.), represents in its value one-third pre-existing labour and two-thirds labour performed or added the same day.  Pre-existing labour and the day’s labour enter into the total product in the same proportion as they enter into each separate product of which the total product is made up.  But if I divide the total product into two parts, putting one-third on one side and two-thirds on the other, it is the same as if the one-third represents only pre-existing labour and the other two-thirds only the labour of the day.  In fact the first one-third represents all past labour which entered into the total product, the full value of the means of production consumed.  After deducting this one-third, therefore, the other two-thirds can represent only the product of the day’s labour.  The two-thirds in fact represent the total amount of the day’s labour that was added to the means of production.

The last two-thirds are therefore equal to the producer’s revenue (profit and wages).  He can consume them, that is, spend them on articles which enter into his individual consumption.  Suppose that these two-thirds of the coal produced daily were bought by the consumers or purchasers not with money, but with the commodities which they have previously transformed into money in order to buy coal with it.  A part of these two-thirds of the coal will enter into the individual consumption of the coal producers themselves, for heating, etc.  This part therefore does not enter into circulation, or if it does first enter into circulation it will be withdrawn again from it ||351| by its own producers.  Minus this part of the two-thirds which the producers of coal themselves consume, they must exchange all the rest of it (if they want to consume it) for articles which enter into individual consumption.

In this exchange it is a matter of complete indifference to them whether the sellers of the consumable articles exchange capital or revenue for the coal; that is to say, whether for example the cloth manufacturer exchanges his cloth for coal in order to heat his private dwelling (in this case the coal itself in turn is an article of consumption for him, and he pays for it with revenue, with a quantity of cloth that represents profit); or whether James, the cloth manufacturer’s footman, exchanges the cloth he has received as wages for the coal (in this case the latter is once more an article of consumption and exchanged for the revenue of the cloth manufacturer, who in turn however has exchanged his revenue for the unproductive labour of the footman); or whether the cloth manufacturer exchanges cloth for coal in order to replace the coal required in his factory that has been used up.  (In the latter case the cloth that the cloth manufacturer exchanges represents for him constant capital, the value of one of his means of production; and the coal represents for him not only the value but his means of production in kind, But for the coal producer the cloth is an article of consumption, and both cloth and coal represent for him revenue; the coal, revenue in its non-realised form; the cloth, revenue in its realised form.)

But as for the last one-third of the coal, the coal producer cannot spend it on articles which enter into his individual consumption; he cannot spend it as revenue.  It belongs to the process of production (or reproduction) and must be transformed into iron, timber, machinery—into articles which form the component parts of his constant capital and without which the production of coal cannot be renewed or continued.  He could, it is true, exchange also this one-third for articles of consumption (or, what is the same thing, for the money of the producers of these articles), but in fact only on the condition that he exchanges these consumption articles in turn for iron, timber, machinery—that they enter neither into his own consumption nor into the outlay of his revenue, but into the consumption and revenue outlays of the producers of timber, iron and machinery; all of whom, however, in turn find themselves in the position of not being able to expend one-third of their product on articles for individual consumption.

Now let us assume that coal enters into the constant capital of the producers of iron and timber, and of the machine builder.  On the other hand iron, timber, and machinery enter into the constant capital of the producer of coal.  In so far as these products of theirs enter [into their] mutual [constant capital] to the same amount of value, they replace themselves in kind, and one has to pay the other only the balance for the surplus that he has bought from him in excess of what he has sold to him.  In fact, in such a transaction money appears in practice (through the medium of bills of exchange, etc.) only as means of payment, not as coin, means of circulation; and only the balance is paid in money.  The producer of coal will need a part of this one-third of his coal for his own reproduction, just as he deducted from the product a part of the two-thirds for his own consumption.

The whole quantity of coal, iron, timber and machinery which are reciprocally replaced in this way by the exchange of constant capital for constant capital, of constant capital in one natural form for constant capital in another natural form, has absolutely nothing to do either with the exchange of revenue for constant capital or with the exchange of revenue for revenue.  It plays exactly the same role as seed in agriculture or the capital stock of cattle in cattle-rearing.  It is a part of the yearly product of labour, but it is not a part of the product of the year’s [newly- added] labour (on the contrary it is a part of the product of the year’s labour plus the pre-existing labour), which (conditions of production remaining the same) replaces itself annually as means of production, as constant capital, without entering into any circulation other than that between dealers and dealers and without affecting the value of the part of the product which enters into the circulation between dealers and consumers.

Let us assume that the whole one-third of the coal is thus exchanged in kind for its own elements of production, iron, timber, machinery.  <It might be possible for example to exchange the entire amount direct for machinery; but the machine builder in turn would exchange it as constant capital, not only for his own but for that of the producers of iron and timber.> In fact, each hundredweight of the two-thirds of his product in coal ||352| which he exchanged for articles of consumption, exchanged as revenue, would, from the standpoint of value, consist of two parts, as the total product does.  One-third of a hundredweight would be equal to the value of the means of production used up in the hundredweight, and two-thirds of the hundredweight would be equal to the labour newly added to this third by the producers of the coal.  But if the total product is for example equal to 30,000 hundredweight he exchanges only 20,000 hundredweight as revenue.  On the assumption made, the other 10,000 hundredweight would be replaced by iron, timber, machinery, etc., etc.; in a word, the whole value of the means of production used up in the 30,000 hundredweight would be replaced in kind by means of production of the same sort and of equal value.

The buyers of the 20,000 hundredweight thus do not pay a single farthing for the value of the pre-existing labour contained in the 20,000 hundredweight; for the 20,000 represent only two-thirds of the value of the total product in which the newly-added labour is realised.  It comes to the same thing, therefore, as if the 20,000 hundredweight represented only labour newly added (during the year, for example) and no pre-existing labour.  The buyer therefore pays the whole value of each hundredweight, pre-existing labour plus newly-added labour, and yet he pays only for the newly-added labour; and that is because the quantity he buys is only 20,000 hundredweight, only that quantity of the total product which is equal to the value of all the newly-added labour.  Just as little does he pay for the farmer’s seed in paying for the wheat which he eats.  The producers have mutually replaced this part for each other; therefore they do not need to have it replaced a second time.  They have replaced it with the part of their own product which it is true is the year’s product of their labour, but is not at all the product of their year’s labour, but on the contrary is the part of their annual product that represents the pre-existing labour.  Without the new labour the product would not be there; but in the same way it would not be there without the labour materialised in the means of production.  If it were merely the product of the new labour, then its value would be less than it now is, and there would be no part of the product to be returned to production.  But if the other method of labour [using means of production] were not more productive and did not yield more product in spite of a part of the product having to be returned to production, it would not be used.

Although no part of the value of the one-third of the coal enters into the 20,000 hundredweight of coal sold as revenue, any change in the value of the constant capital which the one-third or 10,000 hundredweight represented would nevertheless bring about a change of value in the other two-thirds which are sold as revenue.  Let production in iron, timber, machinery and so on, in a word, in the elements of production of which the one-third of the product is composed, become more costly.  Let the productivity of mining labour remain the same.  The 30,000 hundredweight are produced with the same quantity of iron, timber, coal, machinery and labour as before.  But since iron, timber and machinery have got dearer, cost more labour-time than before, more coal than before must be given for them.

||353| As previously, the product would be equal to 30,000 hundredweight.  The coal-mining labour has remained as productive as it was before.  With the same quantity of living labour and the same amount of timber, iron, machinery, etc., it produces 30,000 hundredweight as before.  The living labour, as before, is represented by the same value, say £20,000 (reckoned in money).  On the other hand timber, iron, etc., in a word, the constant capital, now cost £16,000 instead of £10,000; that is to say, the labour-time contained in them has increased by six-tenths, or 60 per cent.

The value of the total product is now equal to £36,000; it was £30,000 before; it has therefore risen by one-fifth, or 20 per cent.  So also every aliquot part of the product costs one-fifth, or 20 per cent, more than before.  If a hundredweight cost £1 previously, then now it costs £1 plus one-fifth of £1=£1. 4s. Previously, ¹/₃ or ³/₉ of the total product was equal to constant capital, ²/₃ equal to labour added.  Now the proportion of the constant capital to the value of the total product is as 16,000 : 36,000 = ¹⁶/₃₆ = ⁴/₉.  It amounts therefore to one-ninth [of the value of the total product] more than before.  The part of the product which is equal to the value of the labour added was formerly ²/₃ or ⁶/₉ of the product, now it is ⁵/₉.

So we get:

The coal miners’ labour would not have become less productive; but the product of their labour plus the pre-existing labour would have become less productive; that is, ¹/₉ more of the total product would be required to replace the component part of the value ||354 | formed by the constant capital.  ¹/₉ less of the product would be equal to the value of the labour added.  Now as before the producers of iron, timber, etc., would only pay for 10,000 cwt. of coal.  Previously these cost them £10,000.  They will now cost them £12,000.  A part of the costs of the constant capital would therefore be made good, since they would have to pay the increased price for the part of the coal which they get in replacement of iron, etc.  But the producer of coal has to buy raw material, etc., from them to the amount of £16,000.  There remains therefore a debit balance of £4,000, that is, 3,333 ¹/₃ cwt. of coal.  He must therefore, as before, supply 16,666 ²/₃ + 3,333 ¹/₃ cwt. = 20,000 cwt. of coal = two-thirds of the product to the consumers, who would now have to pay £24,000 for it instead of £20,000.  In so doing they would have to replace for him not only labour, but also a part of the constant capital.

As regards the consumers, the matter would be very simple.  If they wished to consume the same quantity of coal as before, they must pay one-fifth more for it and so must spend one-fifth of their revenue less on other products, if the production costs have remained the same in every branch of production.  The difficulty lies only in this: how does the producer of coal pay for the £4,000 of iron, timber, etc., for which their producers do not want coal in exchange?  He has sold the 3,333 ¹/₃ cwt., equal to this £4,000, to the consumers of coal, and has received in exchange commodities of all kinds.  But these cannot enter into his consumption or that of his labourers, but must pass into the consumption of the producers of iron, timber, etc., for he must replace in these articles the value of his 3,333 ¹/₃ cwt.  It will be said: it’s quite a simple matter.  All consumers of coal have to consume ¹/₅ less of all other commodities, or each of them has to give ¹/₅ more of his commodities for coal.  The producers of timber, iron, etc., consume exactly this ¹/₅ more.  However, it is not prima facie evident how the lowered productivity in the ironworks, machine building, timber-felling, etc., is to enable their producers to consume a larger revenue than before, since the price of their articles is supposed to be equal to their values, and, consequently, to have risen only in proportion to the diminished productivity of their labour.

Now it is assumed that iron, timber, machinery have risen in value by three-fifths, by 60 per cent.  There are only two causes which can give rise to this.  Either the iron, timber, etc., production has become less productive, because the living labour used in it has become less productive, that is, a greater quantity of labour must be used to produce the same product.  In this case the producers must use three-fifths more labour than before.  The rate of wages has remained the same, because the lowered productivity of labour has only a passing effect on individual products.  Therefore the rate of surplus-value also has remained the same.  The producer needs 24 days’ labour where he needed 15 before; but he pays the labourers, as before, only 10 hours’ labour on each of the 24 [working-days], and makes them work 2 [hours] for nothing on each of these days, as previously.  If the 15 [labourers] have therefore done 150 hours’ labour for themselves and 30 for him; so the 24 work 240 hours for themselves and 48 for him.  (Here we don’t worry about the rate of profit.) Wages have only fallen in so far as they are spent in iron, timber and machinery, etc., which is not the case.  The 24 labourers now consume ³/₅ more than the 15 did before.  So the coal producers can set aside correspondingly more for them from the value of the 3,333 ¹/₃ cwt, (i.e., for their master, who pays out the wages).

Or the reduced productivity in the production of iron, timber, etc., arises from the fact that parts of their constant capital, of their means of production, have become dearer.  Then the same alternative applies, and finally the reduced productivity must result in the use of a greater quantity of living labour; therefore also in increased wages, which the coal producer has partly received from the consumers in the £4,000.

In the branches of production where more labour is employed, the amount of the surplus-value will have risen because the number of workers employed is greater.  On the other hand, the rate of profit will have fallen in so far as all component parts of their constant capital into which their own product enters [have risen]; whether they themselves use a part of their own product as means of production, or, as in the case of coal, their product enters as a means of production into their own means of production.  However, if their circulating capital laid out in wages has increased more than the part of the constant capital that they have to replace, their rate of profit will also have risen, and they ||355| will participate in the consumption of a part of the £4,000.

An increase in the value of the constant capital (arising from lowered productivity in the branches of labour which supply it) raises the value of the product into which it enters as constant capital, and reduces the part of the product (in kind) which replaces the newly-added labour, thus making it less productive in so far as this is reckoned in its own product.  For the part of the constant capital which is exchanged in kind, the position is the same as it was.  The same quantity of iron, timber and coal as before will be exchanged in kind in order to replace the iron, timber and coal that has been used up, and in this transaction the higher prices will balance each other.  But the surplus of coal which now forms a part of the constant capital of the coal producer and does not enter into this exchange in kind is, as before, exchanged for revenue (in the case given above, in part not only for wages but also for profit); this revenue, however, instead of going to the former consumers, accrues to the producers in whose spheres of production a greater quantity of labour is used, that is, the number of labourers has increased.

If a branch of industry produces products which enter only into individual consumption, and neither into other industries as means of production (by means of production constant capital is always meant here) nor into their own reproduction (as for example in agriculture, cattle-raising, or the coal industry, into which coal itself enters as auxiliary material), then the annual product of this branch<any possible surplus over the annual product making no difference in this connection> must always be paid for out of revenue, wages or profit.

Let us take the case of the linen given earlier.  Three yards of linen consist of: two-thirds constant capital and one-third labour added.  One yard of linen therefore represents labour added.  If the surplus-value is 25 per cent, then one-fifth of the 1 yard represents the profit, the other four-fifths represent the reproduction of the wages.  The manufacturer himself consumes the one-fifth, or what is the same thing, others consume it and pay him the value, which he consumes in their own or in other commodities.  <To simplify matters, here the whole profit is—wrongly—considered as revenue.> But he expends the four-fifths of a yard again in wages; his labourers consume them as their revenue either directly or in exchange for other consumable products, whose owners consume the linen.

This is the total part of the 3 yards of linen—the 1 yard—which the linen producers can themselves consume as revenue.  The other 2 yards represent the manufacturer’s constant capital; they must be reconverted into the conditions of production for linen—yarn, machinery, etc.  From the standpoint of the manufacturer, the exchange ‘of the 2 yards of linen is an exchange of constant capital; but he can only exchange it against the revenue of other people.  So he pays for the yarn, say, with ⁴/₅ of the 2 yards or ⁸/₅ yards, and for the machinery with ²/₅ of a yard.  The spinner and machine builder in turn can each consume ¹/₃ of what they get, that is, the former, out of ⁸/₅ yards, ⁸/₁₅ of a yard; the latter ²/₁₅ out of the ²/₅ of a [yard].  Added together, ¹⁰/₁₅ or ²/₃ of a yard.  But ²⁰/₁₅ or ⁴/₃ yards must replace for them the raw material, flax, iron, coal, etc., and each of these articles in turn consists of one part which represents revenue (labour newly added), and another part which represents constant capital (raw materials and fixed capital, etc.).

The last ⁴/₃ yards, however, can only be consumed as revenue.  What therefore ultimately appears as constant capital in yarn and machinery and is used by the spinner and machine builder to replace the flax, iron and coal (except for the part of the iron, coal, etc., which the machine builder replaces with machines) can only represent the part of the flax, iron and coal which forms the revenue of the flax, iron and coal producers, so that there is no constant capital to be replaced in this; that is to say, it must belong to the part of the product into which, as shown above, no part of the constant capital enters.  But these producers consume what is their revenue in iron, coal, flax, etc., in linen or in other consumable products, because their own products do not enter in that form, or only to a small extent, into their individual consumption.  Thus a part of the iron, flax, etc., can be exchanged for a product which only enters into individual consumption, that is linen, and in exchange for it replace for the spinner all, and for the machine builder part, of his constant capital; while in turn the spinner and machine builder, with the part of their yarn and machinery that represents revenue, consume linen and thereby replace the weaver’s constant capital.

Thus in fact the whole of the linen is resolved into the profits and wages of the weaver, spinner, machine builder, flax-grower and producers of coal and of iron, while at the same time they replace the whole of the constant capital for the linen manufacturer and the spinner.  The account would not balance if the final producers of raw materials had to replace their own constant capital by exchange with the linen, since this is an article for individual consumption, which does not enter into any sphere of production as means of production, ||356| as part of the constant capital.  The account balances, because the linen bought by the flax-grower, producers of coal and of iron, machine builder, etc., with their own product, replaces for them only the part of their product which consists in revenue for them, but in constant capital for those who buy their products.  That is only possible because they replace the part of their product which does not consist of revenue and which therefore cannot be exchanged for consumable products, in kind or by the exchange of constant capital for constant capital.

In the example given above it may seem strange that it is assumed that the productivity of labour in a given branch of industry has remained the same, and yet that it has fallen, if the productivity of the living labour employed in this branch of industry is reckoned in its own product.  But this is very simply explained.

Suppose the product of a spinner’s labour is equal to 5 lbs. of yarn.  Assume that he needs for this only 5 lbs. of cotton (that is, there is no waste); and that an lb. of yarn costs 1 shilling (we leave the machinery out of account; that is, we suppose that its value has neither fallen nor risen; for the case we are considering, therefore, its value is equal to nil).  [Let] cotton [cost] 8d. an lb.  Of the 5s, which the 5 lbs. of yarn costs, 40d. (5x8d.)=3s. 4d. is for the cotton, and 5x4d.=20d.=1s. 8d, is the newly-added labour.  Of the total product, therefore, constant capital amounts to 3s. 4d., [that is,] 3 ¹/₃ lbs, of yarn, and labour to 1 ²/₃ lbs. of yarn, Hence two-thirds of the 5 lbs. of yarn replace constant capital and one-third of the 5 lbs, of yarn, or 1 ²/₃ lbs., is the part of the product which pays for the labour.  Assume that the price of an lb. of cotton now rises by 50 per cent, from 8d. to 12d., or 1s.  Then we have for 5 lbs, of yarn, first, 5s. for 5 lbs. of cotton, and 1s. 8d. for labour added, whose quantity, and therefore whose value expressed in money, remains the same.  Thus the 5 lbs. of yarn now costs 5s, plus 1s. 8d.=6s, 8d.  Of this 6s. 8d., however, raw material is now 5s, and labour 1s. 8d.

6s. 8d.=80 d., of which 60d, is for raw material and 20d. for labour.  Labour now only forms 20d, of the value of the 5 lbs., 80d., or ¹/₄=25 per cent; previously, 33 ¹/₃ per cent.  On the other hand the raw material is 60d = ³/₄ = 75 per cent; previously it was only 66 ²/₃ per cent.  As the 5 lbs. of yarn now costs 80d., 1 lb. costs ⁸⁰/₅d.=16d.  For his 20d.—the value of the [newly-added] labour—[the spinner] will therefore get 1 ¹/₄ lbs, of the 5 lbs, of yarn, and [the other] 3 ³/₄ lbs. [go for] raw material.  Previously, 1 ²/₃ lbs. were for labour (profit and wages) and 3 ¹/₃ lbs, for constant capital.  Reckoned in its own product, therefore, the labour has become less productive, although its productivity has remained the same and only the raw material has got dearer.  But it has remained equally productive, because the same labour has transformed 5 lbs. of cotton into 5 lbs. of yarn in the same time, and the actual product of this labour (considered as use-value) is only the form of yarn which has been given to the cotton.  The 5 lbs. of cotton have been given the form of yarn as before, with the same labour.  The actual product, however, consists not only of this form of yarn but also of the raw cotton, the material which has been put into this form, and the value of this material now forms a greater part of the total product than it did before, in proportion to the labour which gives it the form.  Consequently the same quantity of spinning labour is paid for in less yarn, or the part of the product which replaces it has become smaller.

So much for that.

[(c) Vulgar Assumptions of Garnier’s Polemics against smith, Garnier’s Relapse into Physiocratic Ideas.  The View of the Unproductive Labourers’ Consumption as the source of Production—a step Backwards as Compared with the Physiocrats]

So in the first place Garnier is wrong when he says that the whole capital is in the end always replaced by consumer’s revenue, since a part of the capital can be replaced by capital and not by revenue.  Secondly, it is in itself a silly statement, since revenue itself, in so far as it is not wages (or wages paid by wages, revenue derived from wages), is profit on capital (or revenue derived from profit on capital).  Finally, it is silly to say that the part of capital which does not circulate (in the sense that it is not replaced by consumer’s revenue) “yields no profit to its possessor”.  In fact— conditions of production remaining the same—this part yields no profit (or rather, no surplus-value).  But without it capital could in no case produce its profit.

||357| “All that can be deduced from this difference is that, in order to employ productive people, what is required is not only the revenue of the person who enjoys their labour, but also a capitol which yields profit to intermediaries, while to employ non-productive people the revenue which pays them is most often sufficient” (l.c., p. 175).

This one sentence is such a bundle of nonsense that it makes it clear that Garnier, the translator of Adam Smith, in fact understood nothing of what Adam Smith wrote, and in particular had no conception whatever of the essence of the Wealth of Nations—namely, the view that the capitalist mode of production is the most productive mode (which it absolutely is, in comparison with previous forms).

First, it is an extremely silly objection to raise against Smith, who declared that unproductive labour was labour paid directly from revenue, that “to employ non-productive people the revenue which pays them is most often sufficient”.  Now however the antithesis:

“in order to employ productive people, what is required is not only the revenue of the person who enjoys their labour, but also a capital which yields profit to intermediaries.  “

(How productive then must agricultural labour be for Monsieur Garnier, which in addition to the revenue which enjoys the product of the land, requires a capital which not only yields profit to intermediaries, but in addition a rent to the landowner!)

In order “to employ these productive people”, what is necessary is not first capital that employs them, and secondly revenue that enjoys their labour, but nothing other than capital, which produces the revenue, which enjoys the fruit of their labour.  If as a capitalist tailor I lay out £100 in wages, this £100 produces for me say £120.  It produces for me a revenue of £20, with which I can then, if I want to, also enjoy tailoring labour in the form of a “frockcoat”.  If on the other hand I buy clothes for £20 in order to wear them, it is obvious that these clothes have not created the £20 with which I buy them.  And the case would be the same if I got a jobbing tailor to come to my house and made him sew coats for me for £20.  In the first case I received £20 more than I had before, and in the second case, after the transaction, I have £20 less than I had before.  Moreover, I would soon realise that the tailor whom I pay directly from revenue does not make the coat as cheaply as if I bought it from the intermediary.

Garnier imagines that the profit is paid by the consumer.  The consumer pays the “value” of the commodity; and although it contains a profit for the capitalist, the commodity is cheaper for him, the consumer, than if he had spent his revenue directly on labour causing it to produce on a small scale for his personal requirements.  It is obvious here that Garnier has not the slightest idea of what capital is.

He continues:

“Do not many unproductive workers, such as actors, musicians, etc., as a rule only receive their wages through the channel of a manager w ho draws profits from the capital placed in this kind of enterprise?” (l.c., pp.175-76).

This observation is correct, but it only shows that a part of the labourers whom Adam Smith in his second definition calls unproductive are productive according to his first definition.

“It follows therefore that in a society in which the productive class is very numerous, it must be supposed that a large accumulation of capitals exists in the hands of the intermediaries or entrepreneurs of labour” (l.c., p. 176).

In fact, wage-labour on a mass scale is only another expression for capital on a mass scale.

“It is therefore not, as Smith maintains, the proportion existing between the mass of capitals and that of revenues which will determine the proportion between the productive class and the non-productive class.  This latter proportion seems to depend much more on the customs and habits of the people; on the more or less advanced degree of its industry” (l.c., p. 177).

If productive labourers are such as are paid from capital, and unproductive such as are paid from revenue, the proportion of the productive class to the unproductive is obviously that of capital to revenue.  The proportional growth of the two classes, however, will not depend only on the existing proportion of the mass of capitals to the mass of revenues.  It will depend on the proportion in which the increasing revenue (profit) is transformed into capital or expended as revenue.  Although the bourgeoisie was originally very thrifty, with the growing productivity of capital, i.e., of the labourers, ||358| it imitates the retainer system of the feudal lords.  According to the latest report (1861 or 1862)* on the factories, the total number of persons (managers included) employed in the factories properly so called of the United Kingdom was only 775,534,* while the number of female servants in England alone amounted to 1 million.  What a convenient arrangement it is that makes a factory girl to sweat twelve hours in a factory, so that the factory proprietor, with a part of her unpaid labour, can take into his personal service her sister as maid, her brother as groom and her cousin as soldier or policeman!

Garnier’s last sentence is trite tautology.  He makes the proportion between the productive and the unproductive classes depend, not on the proportion of capital and revenue—or rather on the mass of existing commodities which are expended in the form of capital or of revenue—but (?) on the customs and habits of the people, on the degree of development of its industry.  In fact, capitalist production first appears at a certain stage of development of industry.

As a Bonapartist senator, Garnier naturally waxes enthusiastic over lackeys and servitors in general: “No class with an equal number of individuals contributes more than domestic servants to the conversion into capital of sums originating from revenue “(p. 181).

In fact, no class provides a more worthless section of recruits for the petty bourgeoisie.  Garnier does not understand how Smith, “a man who has observed things with such sagacity”, does not value more highly “this intermediary, placed close to the rich, in order to gather up the scraps of revenue which the latter so thoughtlessly dissipates” (l.c., pp. 82, 183).  He himself says in this sentence that he merely “gathers up” the scraps of “revenue”.  But of what does this revenue consist?  Of the unpaid labour of the productive labourer.

After all these extremely worthless polemics against Smith, Garnier, relapsing into Physiocracy, declares agricultural labour the only productive labour!  And why?  Because it “creates another new value, a value which did not exist in society, even as an equivalent, at the moment when this labour began to be performed; and it is this value which provides a rent to the owner of the land” (l.c., p. 184).

So what is productive labour?  Labour which produces a surplus-value, a new value over and above the equivalent which it receives as wages.  Smith is not to blame for Garnier’s failing to understand that the exchange of capital for labour means nothing but the exchange of a commodity of a given value—equal to a given quantity of labour—for a greater quantity of labour than it itself contains, and thus creates “a new value, a value which did not exist in society, even as an equivalent, at the moment when this labour began to be performed”.  |VIII-358||