READING IV.

SHOULD THE PERSONS WHO PERFORM SERVICES BE CALLED PRODUCERS?

The question, who ought to be called producers, and the closely related question, what should be included under wealth, have been the occasion of very considerable differences of opinion from the beginning of economic science. In fact unanimity as to the proper answers to these questions is still lacking. A considerable number continue to follow Mill in limiting wealth to objects, commodities, and so restricting the term producer to a person who contributes directly or indirectly to the bringing into existence of commodities. Of course all admit that the persons who perform true services are highly useful people and deserve compensation; but, according to many writers, such persons can not properly be called producers.

But, while not a few cling to the earlier conception of wealth as including only commodities, probably the more general practice of our day, anyhow in America, is to include services under the term wealth and to include those who perform services under the term producers. Doubtless this broader use of the terms, particularly of wealth, seems in some connections rather forced. Services obviously can not constitute a part of accumulated wealth; and all of us probably mean by a rich man one who has large commodity wealth. Still a definition of producer which permits its application to the man who makes a lawn mower, but not to the man who uses that mower to cut the grass on a customer's lawn, is also very forced;—such a definition seems, in fact, highly unreasonable. Manifestly the ultimate end

of the efforts of both men is the mowed lawn. To that end both contribute and in ways which present no vital differences. Both are equally necessary. Both, it would seem, should receive the same designation.

A further reason for the more liberal interpretation is to be found in the fact that, if the men who furnish services are denied the title producer, they are quite likely to be thought of as in some way economically inferior to the true producers the people who contribute to the furnishing of commodities. The uninstructed public, anyhow, find it very easy to make non-producer synonomous with parasite,—one who takes but does not give. Even trained public teachers, not economists, often refer to the service-producing classes as "making a living out of the true producers."

The following passages from McCulloch furnish a quite early presentation of the case for a broad use of producer.

*Most writers on Political Economy have entered into lengthened discussions with respect to the difference between what they have termed productive and unproductive labor. But it is not easy to discover any real ground for most of those discussions, or for the distinctions that have been set up between one sort of labor and another. The subject is not one in which there is apparently any difficulty. It is not at the species of labor carried on, but at its results, that we should look. So long as an individua! employs himself in any way not detrimental to others, and accomplishes the object he has in view, his labor is obviously productive; while, if he do not accomplish it, or obtain some sort of equivalent advantage from the exertion of the labor, it is as obviously unproductive. This definition seems sufficiently clear, and leads to no perplexities; and it will be shown, in another chapter, that it is not possible to adopt any other without being involved in endless difficulties and contradictions.

*McCulloch-Principles of Political Economy, 4th ed. 1849: Part I, Chapter I, p. 74.

*Dr. Smith has given another criterion of productive and unproductive consumption; but his opinions on this subject, though ingenious, and supported with his usual ability, appear to be destitute of any solid foundation. He divides society into two great classes; the first consisting of those who fix, or, as he terms it, "realise their labor in some particular subject, or vendible commodity, which lasts, for some time at least, after that labor is past"; and the second, of those whose labor leaves nothing in existence after the moment of exertion, but perishes in the act of performance. The former are said by Smith to be productive, the latter unproductive, laborers. Not that, in making this distinction, he meant 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, add nothing to 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. But, to avoid the chance of misrepresentation, we shall give Smith's opinions in his own words.

"There is one sort of labor," says he, "which adds tc 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 labor. Thus, the labor 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 labor 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 labor 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 labor of the latter, however, has its value, and deserves its reward,

*McCulloch, Part IV, pp. 583-586.

as well as that of the former. But the labor 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 labor 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 labor equal to that which had originally produced it. The labor of the menial servant, 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 labor 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 realise itself in any permanent subject or vendible commodity which endures after that labor is past, and for which an equal quantity of labor 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 laborers. 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 afterwards be procured. The protection, security, and defence of the commonwealth, the effect of their labor 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 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. The labor of the meanest of these has a certain value, regulated by the very same principles which regulate that of every other sort of labor; and that of the noblest and most useful produces nothing which could afterwards purchase or procure an equal quantity of labor. 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."

But though these statements be plausible, it will not, we apprehend, be difficult to show the fallacy of the distinction Smith has endeavored to establish. To begin with his strongest case, that of the menial servant: He says, that his labor is unproductive, because it is not realized in a vendible commodity, while the labor of the manufacturer is productive, because it is so realised. But what, may we ask, are the results of the labour of the manufacturer? Do they not consist 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 menial servant belongs to the same class, and is also a producer of utility? It is universally allowed that the husbandman who raises corn, beef, and other articles of provision, is a productive laborer; but if so, why is the cook or menial servant who prepares and dresses these articles, and fits them for use, to be set down as unproductive? It is clear there is no difference whatever in the nature of their services-that they are either both productive, or both unproductive. To have a fire, it is quite as indispensable 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 be said that the miner is a productive laborer, must we not say as much of the servant employed to make and mend the fire? The whole of Smith's reasoning proceeds on a false hypothesis: he has made a distinction where there is none, and where it is not in the nature of things there can be any. 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 production of these he will have in the shape of menial services, and what in the shape of material products. [In the remainder of McCulloch's discussion he unfortunately shifts his ground, arguing that the man who furnishes services is a true producer because he contributes indirectly to the production of commodities. The true ground for including service furnishers among the producers is the one