The four 18th century streams on productive labour

Cosimo Perrotta

doi:10.5209/rev_ijhe.2014.v1.n2.47726

Abstract

This article first recalls our previous research on the original approach on productive labour, which goes from Petty to Genovesi (1767). That approach, being mainly empirical, divided jobs into more or less productive. The other most important approaches came later: Quesnay founded productive labour on surplus, Condillac on utility, Smith on exchange value. All of them gave the concept a more rigorous, but also more rigid shape: jobs were divided into productive or unproductive once and for all. Moreover social utility and productive nature of labour became separated qualities. Smith’s concern was to fight the waste of the aristocrats, which fed unproductive labour and subtracted resources from investment and productive labour. But for Smith public services and intellectual labour are unproduc-tive because their product is not material. So, he puts the seeds of the dissolution of his own theory. The following decades witness a confrontation between the physiocratic and the Smithian approach. In the end the latter prevails, but its inconsistencies emerge.

Highlights

This article first recalls our previous research on the original approach on productive labour, which goes from Petty to Genovesi (1767)
Maybe our reader is thinking: “Why should we bother about a wrong distinction, which does not help in understanding real economy? Insofar as a certain labour can to get an income, it is anyway productive”. Such an idea, accepted by most economists, implies some neoclassical principles: exchange and prices are the basis of economic processes; microeconomics and individual behaviour determine the macro-processes, while the reverse does not happen. In the end this approach implies that growth is the natural effect of free trade, and economic policy only consists in removing the obstacles to the spontaneous market forces
The economists who used the distinction productive/unproductive labour had another view. They were mainly concerned with development, even when treating of exchange and prices

Summary

Introduction

The economic distinction between productive and unproductive labour is not born with Quesnay and Smith, as most economists still believe It originates with Petty, whose long reflections on the issue started as early as 1644. Quesnay connects the concept to the production of surplus; Smith defines it through the production of (exchange) value. Quesnay provides for the first time a rational explanation of the general process of production, exchange, distribution and reproduction of wealth. Non-agricultural activities can yield a profit, because of the increase in the price of their products, but they cannot generate a surplus, because they only transform the products generated in agriculture16 They represent a mere exchange between present and future goods Graslin and Condillac’s versions will be the most influential in the following literature

Adam Smith

Conclusions