Consumption of Wealth. Dr. Smith's Dr. Smith has given another criterion of productive and unproductive consumption; but his opinions on this subject, though exceedingly ingenious, and supported with his usual ability, apCriterion of pear to rest on no solid foundation. He divides society into two and Unpro- great classes. The first consist of those who fix, or, as he terms ductive Con- it,"realize their labour in some particular subject, or vendible Productive sumption. commodity, which lasts for some time at least after that labour is past;" the second of those whose labour leaves nothing in existence after the moment of exertion, but perishes in the act of performance. The former are said by Dr. Smith to be productive, the latter unproductive labourers. Not that, in making this distinction, Dr. Smith means to undervalue the services performed by the unproductive class, or to deny that they are often of the highest utility; for he admits that such is frequently the case: but he contends, that these services, however useful, do not augment the wealth of the country; and, consequently, that the commodities consumed by this class are unproductively consumed, and have a tendency to impoverish, not to enrich the society. But to avoid the chance of misrepresentation, we shall give Dr. Smith's opinions in his own words. "There is one sort of labour," says he, " 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, wealth. Franklin in his homely way illustrates the principle by the effect produced by "a fine bonnet" from Philadelphia, upon the habits of a retired village in Pennsylvania; it turned all the idle young women into industrious knitters and spinners, in order to procure the means of similar display. It has been often questioned whether Political Economy be a moral science; the decision of Adam Smith and his followers is against it; the production of material wealth is the only question they admit. National prosperity as it rests upon the higher sources of talent, learning, science, and virtue, is altogether excluded, together with all reference to individual enjoyment. According to the policy of this system, every man would labour like a slave, hoard like a miser, and live like an anchorite; and if this is not to be the result, it is because reason and propriety and prudence are overruling considerations, and these are moral motives. We may, therefore, regard Political Economy to be what all science must be, which has reference to the conduct and wellbeing of man, a moral science, governed by those limitations which are imposed by virtue and prudence, and including all those operating causes which influence his character and happiness. To this view of it, there lies indeed the objection, that it introduces many considerations of a general and moral nature, and therefore not easily estimated. But in answer, let it be observed, that it also gives to the science the greater advantage of truth of application, and forms the politician, not upon the rashness of theory, but upon the calm confidence of practical investigation. He alone who studies Political Economy as a moral science, brings into calculation all the elements upon which national prosperity depends; hence, the results at which he arrives are most likely to be found in accordance with fact, and the principles he deduces to be true, and practical, and operative, since they are derived from a joint examination of the nature of wealth and the nature of man who estimates it. The ground of this decision is a universal axiom. Every rule and law which is intended to be operative upon man, must be based upon the knowledge of that compound nature which it proposes to regulate, for otherwise it will in practice be found to be either inapplicable, inefficient, or injurious.-E. tion of and of his master's profit. The labour of a menial servant, on Consumpthe contrary, adds to the value of nothing. Though the manu- Wealth. facturer 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. 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 manufacturers fixes and realizes 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 afterward, if necessary, put into motion a quantity of labour equal to that which had originally produced it. The labour of the menial servant, on the contrary, does not fix or realize 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 afterward be procured.. "The labour of some of the most respectable orders in the society is like that of menial servants, unproductive of any value, and does not fix or realize itself in any permanent subject or vendible commodity, which endures after that labour is past, and for which an equal quantity of labour could afterward be procured. 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. Their service, how honourable, how necessary, or how useful soever, produces nothing for which an equal quantity of service can afterward be procured. The protection, security, and defence of the commonwealth, the effect of their labour this year, will not purchase its protection, security, and defence for the year to come. In the same class must be ranked some both of the greatest 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, &c. The labour of the meanest of these has a certain value, regulated by the very same principles which regulate that of every other sort of labour; and that of the noblest and most useful produces nothing which could afterward purchase or procure an equal quantity of labour. Like the declamation of the actor, the harangue of the orator, or the tune of the musician, the work of all of them perishes in the very instant of its production." (Wealth of Nations, II. p. 1.)* *The invidious distinction here drawn between the various classes of the community by arranging them as productive or unproductive labourers, is one of the narrow and imperfect views which is justly discarded in the liberal system of Political Economy. Consumption of Dr. Smith's To Such are the opinions of Dr. Smith, and it will not, we think, Wealth. be very difficult to show the fallacy of the distinction he has endeavoured to establish between the labour, and consequently Distinction also the consumption, of the different classes of society. between the begin with the case of the menial servant :-Dr. Smith says, that Classes of his labour is unproductive, because it is not realized in a vendible Society shown to be commodity, while the labour of the manufacturer is productive, ill-founded. because it is so realized. But of what, may we ask, is the la Different It is an early and natural prejudice, that some portions of society are idle, contribute nothing to public prosperity, and live solely upon the labour of others. This error meets us under different forms. 1. The vulgar prejudice against the rich as if they were supported by the poor, and themselves contributed nothing to the common sustenance of the whole. Science has put down this language of ignorance and envy, and shown that the capital of the rich man is as effective in the support of society, as the manual labour of the poor. Indeed if any distinction is to be drawn between them it is in favour of capital as the higher agent, which sets in motion, and so far supports all the productive industry of the country, that if it should be diminished one half, one half the labourers would immediately be driven away by starvation. 2. A more scientific, but not better founded opinion, is that of the French economists, who stigmatized as unproductive labourers all those who contributed not to the products of agriculture. This alone, according to them, furnished a surplus return to labour, which appeared in the form of rent paid to the landholder for the productive services of the soil. This prejudice is also exploded by advancing science, which shows-First, that rent is the result, not of the higher, but of the more stinted energies of nature in the processes of agriculture-Secondly, that all other classes are equally with the farmer raisers of grain, provided their labours enable him to devote himself unreservedly to its cultivation-and lastly, that raw produce is without value till manufacturing labour brings it into a form subservient to the use of man, and commercial labour has, by a series of exchanges, brought it to the hands of the consumer. 3. The most liberal form under which this prejudice exists, is that maintained by Adam Smith, as quoted in the text, excluding all from the productive class whose labour is not realized in a material form. This distinction arose necessarily from his definition of wealth, which he confined to material products. The result of these views, was the division of society, by Adam Smith, into the four following classes : 1. Labourers, who perform the work, and who live on wages. 2. Capitalists, i. e. holders of land or money, who furnish to the former the means of labour, and who live on rent. 3. Traders, who facilitate the exchanges necessary to society, and who live on profits. 4. Servants or drones of society, comprising the discordant assemblage of king, magistrates, professional men, players, house servants, and vagabonds. The question lies, not with regard to the correctness of his conclusions which are incontrovertible upon the principles on which he sets out, but to the expediency of the premises themselves. For a defence of the views of Adam Smith, see the Review of this article in the Quarterly, Vol. XXX. p. 299. The frequent anomalies which arise out of this limitation of wealth, would seem to show that there is something erroneous in the principle upon which it rests. As for instance, a musical instrument is a portion of wealth, and he who made it is a productive labourer, while he whose skill applies it to the only use for which it was made, and thereby prevents it from being wholly useless, he is an unproductive labourer. He who polishes boots to be sold is a productive labourer he who performs the same office in a family is an unproductive labourer. Indeed this inconsistency may be made to appear in a thousand instances, and is very well exemplified by our author in the text. tion of bour of the manufacturer really productive? Does it not consist Consumpexclusively of comforts and conveniencies required for the use Wealth. and accommodation of society? The manufacturer is not a producer of matter, but of utility only. And is it not obvious that the labour of the menial servant is also productive of utility? If, for example, the labour expended in converting the wool of the sheep into a coat be, as it unquestionably is, productive, then surely the labour expended in cleaning and brushing the coat, and rendering it fit to be worn, must be so too. It is universally allowed, that the labour of the husbandman in raising corn, béef, and other articles of provision, is productive; but if so, why is the labour of the menial servant who performs the necessary and indispensable task of preparing and dressing these articles, and fitting them to be used, to be stigmatized as unproductive? It is clear to demonstration, that there is no difference whatever between the two species of industry-that they are either both productive, or both unproductive. To produce a fire, is it not. In opposition to these exclusive views, appears the liberal system of Ganihl, Say, Malthus, &c. According to this system every man is a preductive labourer, if neither thief nor beggar. If he maintain himself, he must do it by producing either the direct means of subsistence, or what society considers 'as an equivalent, he exchanges equal values with those around him he gives either labour, or capital, or land, or skill, or talent of some kind or other, but of equal value in the eyes of the community, with that which he receives in exchange, But to this wide principle there are two exceptions-political and moral. 1. Political. When, left to the voluntary support of society, no order of men can become too numerous-arbitrarily supported, they may, and often do-as ecclesiastics in Romish countries, and officers of state under monarchical governments. 2. Moral. This exception is twofold.-1. Exclusive. 2. Limiting. 1. Excluding those who live by preying upon the vices of men and the corruptions of society. The kidnapper, the gambler, the provider of the means of gaming, intemperance, and vice, all fall under this head. They are self supported, but at the same time ruinous members of the community. Among these specifications as a prominent evil of our country, and more especially of the city of New-York, may be mentioned the facilities given to intemperance by a needless multiplication of licensed retailers of spirituous liquors. It is an evil great and manifold, moral, political, and economical, striking at the root of national prosperity, and filling society with poverty and crime. 2. Limiting by the rules of moderation and prudence those who furnish the means of public amusement. This is a check, however, which lies not in the laws but in the manners of society, and is a further proof of the moral character of the science which requires it The division which Say makes of the various classes of society is as follows. He brings into the rank of productive labourers, all who fall within the following classification: 1. Holders of land or of any other natural agent. 2. Capitalists who furnish the means of supporting the labourer. And, 3. The industrious class which, includes all who live upon labour, mental or corporeal. This class comprehends the excluded labourers of Adam Smith, and is subdivided as follows: 1. Those who obtain the raw materials, or agriculturists. 2. Who give to it utility by change of form, or manufacturing labourers. 3. Who bring it to the hands of the consumer, or commercial labourers. 4. Who increase the power of the preceding labourers, direct their efforts, or secure the fruits of their labour. This includes, 1. Government in all its branches,, who preserve the peace, safety, and good order of society. 2. Education in all its forms, intellectual, moral, and religious. 3. Science in all its modifications.-E. tion of Wealth. Consump- just as necessary that coals should be carried from the cellar to the grate, as that they should be carried from the bottom of the mine to the surface of the earth? And if it is said, that the miner is a productive labourer, must we not also say the same of the servant, who is employed to make and mend the fire? The whole of Dr. Smith's reasoning proceeds on a false hypothesis. He has made a distinction where there is none, and where there can be none.* The end of all human exertion is the same-that is, to increase the sum of necessaries, comforts, and enjoyments; and it must be left to the judgment of every man to determine what proportion of these comforts he will have in the shape of menial services, and what in the shape of material products. It is an error to suppose that a man is impoverished by maintaining menial servants, any more than by indulging in any other species of expense. It is true he will be ruined if he keeps more servants than he has occasion for, or than he can afford to pay; but his ruin would be equally certain were he to purchase an excess of food or clothes; or to employ more workmen in any branch of manufacture than are required to carry it on, or than his capital could employ.. To keep two ploughmen when one only might suffice, is just as improvident and wasteful expenditure as it is to keep two footmen to do the business of one. is in the extravagant quantity of the commodities we consume or of the labour we employ, and not in the particular species of commodities or labour, that we must seek for the causes of impoverishment.t It *For an able defence of Smith against this heavy charge, see the Review of this article, already quoted, in the Quarterly, No. 60; where the reviewer has the accidental advantage of pressing upon our author the inconsistency of these sentiments, with the definition with which he commences, viz., that Political Economy is "the science of the laws which regulate the production, distribution, and consumption of material products." This, however, is foreign to the merits of the decision. The real question turns upon this single consideration-whether the science relates to exchangeable value in general, or solely to that value which exists in material products. It is, in short, a question of consistency of definition, rather than of truth of reasoning. The conclusions of Adam Smith are equally logical with those of Ricardo. The choice is to be made in the premises from which they set out, and that choice is to be determined by comparing them, and the results which flow from them, with the truth and nature of things. If there be such a portion of national wealth as skill, science, and learning, then is the definition to be rejected which excludes the consideration of them: If from certain premises we arrive at the conclusion that such men as Watt, and Whitney, and Fulton, were unproductive labourers, then are the premises to be denied from which follows so unjust a conclusion.-E. †The principle here laid down, is not only true in theory, but highly valuable in practice. It affords a solution of the anomalous case of ill success combined with economy,-poverty resulting, not from extravagance, but from want of good management. Such persons are economical, perhaps penurious in their habits; live miserably and yet succeed ill,-while others, with no greater advantages, afford themselves all reasonable comforts, and yet go on and prosper. The reason may be stated in the words of our author, "they keep two ploughmen to do the work of one;" whatever be their business, there is a wastefulness of time, of labour, or of capital, in all their arrangements, which increases to them the cost of production, and renders the natural price of the commodity which they furnish, an insufficient return for that which it costs them. The natural price of the commodity, whether it be the result of mental or manual labour, is always regulated by the cost at which the industrious and skilful can fur |