Productive vs. Unproductive Labour

Edinburgh Victoria Street 2026

Capitalism was never a word Adam Smith used, despite being attributed as its patron saint. Indeed the word didn’t surface until after his death. Even under the pen of Karl Marx, considered a major antagonist of Capitalism, it was a word even he rarely used.

Both men did however refer to capital as seen here, in The Wealth of Nations, ‘In the midst of all the exactions of government, this capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their universal, continual, and uninterrupted effort to better their own condition.’

In Das Kapital Marx had a different angle, ‘Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.’

Which brings us to productive and unproductive labour. Smith was not making a moral judgement suggesting one was good and the other bad or even to suggest one was morally better than the other. He was merely trying to distinguish and define different types of labour, although when you read Smith’s quote on Unproductive Labour you might initially assume otherwise.

Productive labour leaves something tangible, that we can touch. A repaired wall, an item that can be sold on, built upon, and will be there tomorrow.

Smith wrote, ‘There is one sort of labour which adds to the value of the subject upon which it is bestowed… The former, as it produces a value, may be called productive… 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.’

Unproductive labour, however skilled, is different. It is enjoyed in the moment then vanishes the moment it’s finished like an evening’s entertainment at a theatre. Something to applaud and then gone.

Smith wrote, ‘The labour of a menial servant, on the contrary, adds to the value of nothing… A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude of menial servants.’

Mitigating the risk of being misquoted as making a moral point, Smith went on and wrote, ’In the same class must be ranked, some both of the gravest and most important, and some of the most frivolous professions: churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.’

He meant the noblest judge or bravest soldier or holiest bishop provided nothing to capital. The same for the best Edinburgh Fringe performance, however much we admire and cherish such contributions to society.

Given that his book was entitled The Wealth of Nations his definitions were designed to draw a clear line between labour that adds to a nation’s capital, and labour that consumes it.

If Smith were writing today, his word choice about menial servants would have undoubtably been different. Times and attitudes may well have changed; his underlying economic point endures.