Chap. 3a: Productive Labour

Chap. 3a: The Accumulation of Capital (Productive vs Unproductive Labour)

1 Productive labour adds value while unproductive labour does not.

  • The labour of a manufacturer adds to:
    • The value of the materials which he works on
    • The value of his own maintenance
    • The value of his master’s profit
  • “The labour of a menial servant, on the contrary, adds to the value of nothing.”
  • The manufacturing worker costs nothing to his employer even though the employer pays his wages.
    • Because the value of his wages is generally restored with a profit in the improved value of his manufactured products.
  • “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”
  • However, the labour of servants has its value.
    • It deserves its reward as well as the manufacturers.
    • But the labour of the manufacturer realizes itself in some vendible commodity which lasts for some time after that labour is past.
      • It is a certain amount of labour stored up to be employed for another time.
    • The price of that vendible commodity can afterwards mobilize labour equal to the labour which originally produced it.
  • On the contrary, the labour of the menial servant, does not realize itself in any vendible commodity.
    • His services generally perish after their performance.
    • It seldom leaves any value behind for which an equal quantity of service could afterwards be procured.


2 The labour of some of the most respectable orders in the society is like the labour of menial servants.

  • It is unproductive of any value.
  • It does not fix or realize itself in any permanent subject or vendible commodity.
  • It does not endure after that labour is past to command an equal quantity of labour afterwards.

Examples of unproductive labourers:

  • The sovereign and all his officers
  • The whole army and navy
  • Servants of the public

They are maintained by a part of the produce of the industry of other people.

  • Their honourable, useful, or necessary service produces nothing for which an equal amount of service can afterwards be procured.
  • The protection, security, and defence of the nation which they bring this year will not purchase its protection, security, and defence next year.

The gravest, most important, and some of the most frivolous professions are unproductive:

  • Churchmen, Lawyers, Physicians, all Men of letters
  • Players, buffoons, musicians, opera-singers, opera-dancers, etc.

Their labour has a certain value regulated by the same principles which regulate other kinds of labour.

  • The noblest and most useful professions produces nothing which could afterwards buy an equal amount of labour:
    • The actor’s declamation
    • The orator’s harangue
    • The musician’s tune
  • Their work perishes in the very instant of its production.


3 Productive and unproductive labourers, and those who do not labour at all, are all equally maintained by the national produce.

  • This national produce must have certain limits and can never be infinite.
    • It rises or falls depending on how much of it is employed to maintain productive or unproductive hands.
  • The whole annual produce, except for the spontaneous productions of the earth, is the effect of productive labour.


4 The whole annual produce of the land and labour of every country is ultimately destined for:

  • Supplying the consumption of its inhabitants
  • Procuring a revenue to them

When the produce first comes from the ground or from the productive labourers, it naturally divides itself into two:

  1. The produce destined for replacing a capital
    • This is for renewing the provisions, materials, and finished work withdrawn from a capital.
  2. The produce for the revenue of:
    • the owner of this capital as the profits, or
    • some other person, as the rent of his land.

Thus, of the produce of land:

  • One part replaces the farmer’s capital.
  • The other part pays the farmer’s profit and the landlord’s rent
    • It brings a revenue to the owner of this capital, as profits
    • It brings a revenue to some other person, as rent

The largest part of the produce of a great manufactory always replaces its undertaker’s capital.

  • The other pays his profit.


5 That part of the national annual produce which replaces capital, immediately only pays for the maintenance of productive hands.

  • It pays the wages of productive labour only.
  • The part of the national annual produce which immediately pays for profit or rent, may maintain productive or unproductive hands indifferently.

6 A man who employs his stock as capital always expects it to be replaced with a profit.

  • Therefore, he employs it in maintaining only productive hands to bring in revenue.
  • Whenever he employs his stock to maintain unproductive hands, the stock is immediately withdrawn from his capital and placed in his stock for immediate consumption.

7 Unproductive labourers and those who do not labour at all, are all maintained by revenue:

  • Part of this revenue is from the annual produce originally destined as revenue either as rent or profits to some persons.
  • Another part of this revenue comes from the annual produce originally destined for replacing a capital and for maintaining productive labourers only.
    • The revenue received by those productive labourers in excess of their necessary subsistence may be employed in maintaining either productive or unproductive hands indifferently.
      • Thus even the common worker who has high wages may maintain a menial servant.
      • He may sometimes go to a play or a puppet show and contribute to maintain unproductive workers.
      • He may pay some taxes and help maintain a more honourable and useful set of equally unproductive workers.
  • However, none of the annual produce destined to replace a capital is ever directed towards maintaining unproductive hands until it has mobilized all the productive labour it could employ.
    • The worker must have earned his wages before he can use his spare revenue to maintain unproductive labour.
      • This spare revenue is generally a small one.
  • In the payment of taxes, their great numbers may compensate the smallness of their contribution.
  • “The rent of land and the profits of stock are everywhere, therefore, the principal sources from which unproductive hands derive their subsistence.”
    • Owners generally have rent and profits to spare.
      • They might maintain productive or unproductive hands indifferently.
      • They seem to have some predilection for unproductive hands.
      • A great lord’s expence generally feeds more idle than industrious people.
      • The rich merchant only maintains industrious people with his capital.
        • But he commonly spends to feed unproductive hands as the great lord.

8 The proportion between the productive and unproductive hands depends very much on the proportion between the annual produce destined for replacing a capital, and the annual produce destined for rent or profit.

  • This proportion is very different in rich countries from that in poor countries.

9 In opulent European countries, the largest portion of the produce of the land is destined for replacing the capital of the rich and independent farmer.

  • The other portion is destined for paying his profits and the landlord’s rent.

But during the feudal government, a very small portion of the produce was sufficient to replace the capital employed in cultivation.

  • It commonly consisted in a few wretched cattle maintained by the spontaneous produce of uncultivated land.
    • That spontaneous produce might not even be considered part of the annual produce.
  • All the produce of land generally belonged to the landlord.
    • It was advanced by him to the occupiers of the land.
      • The occupiers of land were generally bondmen owned by the landlord.
    • Those who were not bondmen were tenants-at-will.
      • The tenants at will paid rent which was nominally a little more than a quit-rent.
      • The quit-rent really amounted to the land’s whole produce.
      • Their lord could always command their labour, in peace or war.
      • They were equally dependent on him as the retainers who lived in the landlord’s house.

But the whole produce of the land undoubtedly belongs to him who can dispose of the labour and service of all those whom it maintains.

  • Presently in Europe, the landlord’s share seldom exceeds 1/3, sometimes not 1/4 of the whole produce of the land.
  • The rent of land in all the improved parts of the country has tripled and quadrupled since those ancient times.
  • This third or fourth part of the annual produce is three or four times greater than the whole produce before.
  • In the progress of improvement, rent diminishes in proportion to the produce of the land.
    • Though rent increases in proportion to the extent.

10 In the opulent European countries, great capitals are presently employed in trade and manufactures.

  • The present interest rate in the improved parts of Europe is never higher than 6%.
  • In the ancient state, very small capitals were needed for the little trade and the few homely and coarse manufactures.
    • However, these must have yielded very large profits.
    • The interest rate was never less than 10%
    • Their profits must have been sufficient to afford this great interest.
    • In some of the most improved parts, it is as low as 2-4%
  • The profits of stock is always much greater in rich than in poor countries because the stock is much greater.
    • In proportion to the stock, the profits are generally much less.

11 That part of the annual produce destined for replacing a capital is much greater in rich than in poor countries.

  • It bears a much greater proportion to the part of the annual produce which is immediately destined for rent or profit.
  • The funds destined for the maintenance of productive labour are much greater in rich countries than in poor countries.
  • The funds for maintaining productive hands in rich countries are also bigger than the funds maintaining unproductive hands.


12 The proportion between those different funds determines the industry or idleness of a country’s inhabitants.

  • The inferior ranks such as the elderly, are maintained by the expence of the courts of justice and of those who plead before them.
    • They are generally idle and poor.
  • In towns principally supported by the residence of a court, the poor are chiefly maintained by the spending of revenue.
    • The inferior ranks are generally idle, dissolute, and poor as in Rome, Versailles, Compiegne, and Fontainebleu.
    • There is little trade or industry in any of the French parliament towns, except for Rouen and Bordeaux.
  • In mercantile and manufacturing towns, the inferior ranks of people are chiefly maintained by the employment of capital.
    • The inferior ranks are generally industrious, sober, and thriving as in many English and in most Dutch towns.
  • “Our ancestors were idle for want of a sufficient encouragement to industry.”
    • “It is better, says the proverb, to play for nothing than to work for nothing.”
  • We are more industrious than our forefathers.
    • Because the funds presently destined to maintain industry are much greater than the funds maintaining idleness, compared with the funds 200-300 years ago.
  • The great trade of Rouen and Bordeaux seems to be owing to their own location.
    • Rouen is the entrepôt of almost all the goods destined for Paris.
      • These are brought from:
        • foreign countries or
        • the French maritime provinces.
    • Bordeaux is also the entrepôt of the wines from the Garonne river.
      • It is one of the richest wine countries in the world.
      • It produces the wine fittest for exportation or for the taste of foreign nations.
  • Such advantageous locations attract a great capital by the great employment they afford.
    • The employment of this capital is the cause of the industry of those two cities.
  • In the other French parliament towns, a little more than the smallest capital is employed above what is needed for their own consumption.
    • The same thing may be said of Paris, Madrid, and Vienna.
      • Paris is by far the most industrious of those three cities
        • It is the principal market of all the manufactures of Paris.
        • Its own consumption is the principal object of all its trade.
  • London, Lisbon, and Copenhagen, are perhaps the only three European cities which are both trading cities and the constant residence of a court.
    • Trading cities trade for the consumption of other countries and their own.
    • The location of those three cities is extremely advantageous.
      • It naturally fits them to be the entrepôts of most of the goods destined for distant places.
  • It is probably more difficult to productively employ a capital in a city where a great revenue is spent for consumption, than in a city where the inferior ranks of people must find their own ways to employ their capitals to maintain themselves.
    • The idleness of people maintained by the expence of revenue probably corrupts the industry of productive people.
      • It probably makes it less advantageous to employ a capital there.
  • There was little trade or industry in Edinburgh before the union.
    • When the Scotch Parliament was no longer to be assembled in it, it ceased to be the residence of the principal nobility and gentry of Scotland.
    • It became a city of some trade and industry.
    • It is still the residence of the principal courts of justice in Scotland, of the Boards of Customs and Excise, etc.
    • A big revenue is still spent in it.
    • It is much inferior to Glasgow in trade and industry.
  • Glasgow’s inhabitants are chiefly maintained by the employment of capital.
  • A large village, which has progressed in its manufactures, becomes idle and poor after a great lord takes up his residence in it.


Words: 2,200

Next: Book 2, Chapter 3b: Capital Accumulation

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