Productive and unproductive labour

Productive and unproductive labour are concepts that were used in classical political economy mainly in the 18th and 19th centuries, which survive today to some extent in modern management discussions, economic sociology and Marxist or Marxian economic analysis. The concepts strongly influenced the construction of national accounts in the Soviet Union and other Soviet-type societies (see Material Product System). The classical political economists, such as Adam Smith and David Ricardo, raised the economic question of which kinds of labour contributed to increasing society's wealth, as against activities which do not increase wealth. In the introduction to The Wealth of Nations, Smith spoke of the "annual labour" and "the necessaries and conveniences" a nation "annually consumes" before explaining that one of the two steps to increase wealth is reducing the amount of "unproductive labour". "Annual" and "annually" refer to a cyclical reproduction process; "unproductive labor" are commodities and services which are not inputs to the next economic cycle and are therefore lost to economic growth. In contrast, theories with no such time horizon tend to understand Smith's unproductive labor as referring to services, and productive labor as meaning vendible goods. Smith’s distinction between productive and unproductive labor corresponds to Sraffa’s (1960) distinction of basic and non-basic goods, as basic goods re-enter the productive process, whereas non-basic goods are destined for consumption, with no value for reproduction. There is one sort of labour 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, and of his master's profit. The labour of a menial servant, on the contrary, adds to the value of nothing.