We might expect to find some discussion of Adam Smith's theory in James Mill's Commerce Defended, since William Spence, against whom Mill was writing, was a thoroughgoing physiocrat, and maintained that agriculture alone is productive. But neither in Commerce Defended nor in his Elements (1821) does James Mill enter into the question. Doubtless he accepted Adam Smith's doctrine. In one place he says 'the dogs, the horses of pleasure, and the menial servants produce nothing.'1 Ricardo quotes with approval Adam Smith's dictum that a man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life, but is otherwise quite silent on the subject. Malthus, desirous as usual of supporting Adam Smith, says: I should define wealth to be those material objects which are necessary, useful, or agreeable to mankind.' But he was not, apparently, altogether satisfied with this definition, for he thought it worth while to put forward a plan for calling all labour productive, but productive in different degrees, if we do not confine wealth to tangible and material objects.'5 Agricultural labour would be the most productive labour because it produces rent and profits as well as wages; next would come other labour assisted by capital, which produces profits as well as wages; and last would come Adam Smith's 'unproductive' labour, which produces wages only. Malthus rejects his own suggestion, because 'it makes the circumstance of the payment made for any particular kind of exertion, instead of the quality of the produce, the criterion of its being productive'; but it is far from clear what he means by this. M'Culloch, in his article, 'Political Economy,' in the Supplement to the fourth edition of the Encyclopædia Britannica (1823), said that political economy treats of wealth, 'if by wealth be meant those material products which possess exchangeable value and which are necessary, useful, or agreeable to man,' but 1 Commerce Defended, p. 69. * Principles, 1st ed. p. 377 ; 3d ed. in Works, p. 165. In one of his Letters to Malthus, p. 158, he says: 'If by wealth you mean, as I do, all those things which are desirable to man'; but this only means 'if you think manufacturing labour productive.' • Political Economy, p. 28. 1 Ibid. p. 38. • Ibid. p. 41. 7 Supplement, vol. vi. p. 217 a. in the enlarged edition of this article, published as Principles of Political Economy in 1825, 'material products' are replaced by articles or products,'1 the word material being thus omitted; and towards the end of the work there occurs a vigorous attack on Adam Smith's theory of productive and unproductive labour. To begin,' says M'Culloch, 'with his strongest case, that of the menial servant': 'Dr. Smith says that his labour is unproductive because it is not realised in a vendible commodity, while the labour of the manufacturer is productive because it is so realised. But of what is the labour of the manufacturer really productive? Does it not consist exclusively of comforts and conveniences required for the use 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? It is universally allowed that the labour of the husbandman who raises corn, beef, 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 set down 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, it is 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 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 one to determine what proportion of these comforts he will have in the shape of menial services, and what in the shape of material products.' 2 If this was not enough, the question ought to have been settled finally by the remarks of Senior in his treatise on Political Economy in the Encyclopædia Metropolitana (1836). Senior declined to confine wealth to material objects, and explained, with some skill, that the difference between the 1 P. 5. See also p. 1, where the same alteration is made. 3 products of Adam Smith's productive labourers and those of his unproductive labourers is, for the most part, merely verbal : 'It appears to us that the distinctions that have been attempted to be drawn between productive and unproductive labourers, or between the producers of material and immaterial products, or between commodities and services, rest on differences existing not in the things themselves which are the objects considered, but in the modes in which they attract our attention. In those cases in which our attention is principally called, not to the act of occasioning the alteration but to the result of that act, to the thing altered, economists have termed the person who occasioned that alteration a productive labourer, or the producer of a commodity or material product. Where, on the other hand, our attention is principally called, not to the thing altered, but to the act of occasioning that alteration, economists have termed the person occasioning that alteration an unproductive labourer, and his exertions services or immaterial products. A shoemaker alters leather, and thread, and wax into a pair of shoes. A shoeblack alters a dirty pair into a clean pair. In the first case our attention is called principally to the things as altered. The shoemaker, therefore, is said to make or produce shoes. In the case of the shoeblack, our attention is called principally to the act as performed. He is not said to make or produce the commodity-clean shoes, but to perform the service of cleaning them. In each case there is, of course, an act and a result; but in the one case our attention is called principally to the act, in the other to the result.'1 Whether our attention is called chiefly to the act or the result depends principally, Senior adds, on the question whether the thing altered still retains the same name, and also on the mode in which the payment is made: 'In some cases the producer is accustomed to sell, and we are accustomed to purchase, not his labour, but the subject on which that labour has been employed; as when we purchase a wig or a chest of medicine. In other cases, what we buy is not the thing altered but the labour of altering it, as when we employ a haircutter or a physician. Our attention in all these cases naturally fixes itself on the thing which we are accustomed to purchase; and, according as we are accustomed to buy the labour, or the thing on which that labour has been expended—as we are, in fact, accustomed to purchase 1 8vo od. pp. 51, 52. a commodity or a service, we consider a commodity or a service as the thing produced.' Borrowing, without acknowledgment, M'Culloch's comparison of the labour of the coal-miner and of the servant who carries coals to the drawing-room, he concludes: 'The consumer pays for the coals themselves when raised and received into his cellar, and pays the servant for the act of bringing them up. The miner, therefore, is said to produce the material commodity, coals; the servant the immaterial product, or service. Both, in fact, produce the same thing, an alteration in the condition of the existing particles of matter; but the attention is fixed in the one case on the act, in the other on the result of that act.'1 Probably no more would now have been heard of attempts to exclude from the annual produce, 'the real wealth' of a nation, an important part of its income, if J. S. Mill had not put forward in 1844 and 1848 views of the subject which he had acquired in his early youth many years before. After the success of his Logic, he published the Essays on some Unsettled Questions of Political Economy (1844), which he had written fourteen or fifteen years earlier, at the age of twenty-three, and before Senior's work was published. In Essay III., 'On the words Productive and Unproductive,' he declares that all labour should be considered unproductive if it does not produce 'permanent sources of enjoyment.' It is, he says, ' subversive of the ends of language' to say that the labour of Madame Pasta was as well entitled to be called productive labour as that of a cotton spinner.' '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 to keep up these permanent sources should, we conceive, be termed productive.' It is clear that these remarks have no bearing on the question of what constitutes the annual produce, 'the real wealth,' of the country. Mill is thinking exclusively of the capital-wealth. Indeed at the end of the essay he uses the term, 'the permanent sources of enjoyment,' which is said, in the passage just quoted, to be 1 8vo ed. pp. 52, 53. 3 2 P. 76. 2 P. 82. equivalent to 'the wealth of the country,' as an alternative expression for 'the national capital.' But in the Principles, instead of profiting by Senior's observations, he excludes, not only from capital but also from produce, all 'utilities not fixed or embodied in any object, but consisting in a mere service rendered; a pleasure given, an inconvenience or a pain averted during a longer or a shorter time, but without leaving a permanent acquisition in the improved qualities of any person or thing': 2— 'The three requisites of production, as has been so often repeated, are labour, capital, and land. . . . Since each of these elements of production may be separately appropriated, the industrial community may be considered as divided into landowners, capitalists, and productive labourers. Each of these classes, as such, obtains a share of the produce; no other person or class obtains anything, except by concession from them. The remainder of the community is, in fact, supported at their expense, giving, if any equivalent, one consisting of unproductive services.' 8 This implies, of course, that in adding up the national income we must exclude all wages of unproductive_labour. The author of an elementary manual, writing forty years after J. S. Mill, actually accepted this doctrine, saying that if we include in the national income the incomes both of a landowner and his butler, 'we have counted twice over what the butler receives.' We have, of course, done nothing of the kind. The butler has an income consisting of the necessaries, conveniences, and amusements, which he obtains by means of the board, lodging, and money furnished him by his employer, and his employer has an income consisting of the necessaries and conveniences produced for him by the butler. Fortunately few or none of the economists who have expressed themselves in favour of excluding the produce of 'unproductive' labour from the annual produce have attempted to adhere consistently to the exclusion. When they divide the annual produce into wages, profits, and rent, they mean, and their readers understand them to mean, all rent, all profits, and all wages. 1 P. 89. 2 Book 1. ch. iii. § 2, 1st ed. vol. i. pp. 57, 58; People's ed. p. 29 b. 3 Book II. ch. iii. § 1, 1st ed. vol. i. p. 279; People's ed. p. 145 a. |