Classical Political Economy
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 labour" are commodities and services which are not inputs to the next economic circle and are therefore lost to economic growth. In contrast, theories with no such time horizon tend to understand Smith's unproductive labour as referring to services, and productive labour as meaning vendible goods. Smith’s distinction between productive and unproductive labour 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.
As Edwin Cannan observes, Smith’s view of annual reproduction and as a consequence the distinction of productive and unproductive labour stems from his meeting, and the influence of, the French economists known as the Physiocrats. To the Physiocrats artisans and manufacturers are considered as "classe sterile" or unproductive labour because as a result of French income distribution they worked primarily for the nobles and the church. Before his visit to France in his Theory of Moral Sentiments Adam Smith sees the gluttony of the landlords as an "invisible hand" which helps the poor to partake in the landlords wealth. In The Wealth of Nations it is seen as the consumption of unproductive labour, limiting the growth of wealth.
Smith's view that human labour – but not unproductive labour – is the source of wealth reflects the classical position that all commodities can be reduced to actual labour and produced inputs which in turn resolve into labour and former inputs. In competitive economies, i.e. in economies without "rents" because of monopolies, the value of a commodity is determined by the amount of embodied labour: direct labour and "dated" labour, indicating the difficulties of production plus interest for past labour. This contrasts to neoclassical economics where the price is the addition of the productive contribution of various factors of production.
Within an enterprise, for example, there were many tasks which had to be performed, such as cleaning, record and bookkeeping or repairs, which did not directly contribute to producing and increasing wealth in the sense of making a net addition to it - in other words, such tasks represented a net cost to the enterprise which had to be minimized.
There were also whole occupations such as domestic servants, soldiers, schoolteachers etc. which, although necessary, did not seem "productive" in the sense of increasing the material wealth of a society.
Part of the population consumed wealth but did not create it. To maximize economic growth, therefore, "unproductive costs" which consumed part of the total national income rather than adding to it should be "minimized; productive labour had to be maximized.
The question was also looked at in terms of "earned" versus "unearned" income. In a market-based economy based on trade and exchange, people can obtain incomes from all manner of activities. Some of these incomes could be seen as making net additions to the national income, while others represented only a transfer of income. Some activities created new wealth, others only transferred wealth created somewhere else or appropriated wealth.
Many different economic and moral arguments were made to either justify or else criticise the incomes gained from different activities, on the ground that they were "productive" or "unproductive", "earned" or "unearned", "wealth-creating" or "wealth-consuming".
Read more about this topic: Productive And Unproductive Labour
Other articles related to "classical political economy, classical, economy, political":
... The pair (i.e ... Vladimir and Estragon) is often played with Irish accents, as in the Beckett on Film project ...
... Main article Classical economics Publication of Adam Smith's The Wealth of Nations in 1776, has been described as "the effective birth of economics as a separate discipline ... Malthus also questioned the automatic tendency of a market economy to produce full employment ... He blamed unemployment upon the economy's tendency to limit its spending by saving too much, a theme that lay forgotten until John Maynard Keynes revived it in the 1930s ...
... America written by Michael Barkun, professor emeritus of political science at the Maxwell School of Citizenship and Public Affairs Barkun argues New age beliefs ... and could have a devastating effect on American political life ...
Famous quotes containing the words economy, classical and/or political:
“It enhances our sense of the grand security and serenity of nature to observe the still undisturbed economy and content of the fishes of this century, their happiness a regular fruit of the summer.”
—Henry David Thoreau (18171862)
“Compare the history of the novel to that of rock n roll. Both started out a minority taste, became a mass taste, and then splintered into several subgenres. Both have been the typical cultural expressions of classes and epochs. Both started out aggressively fighting for their share of attention, novels attacking the drama, the tract, and the poem, rock attacking jazz and pop and rolling over classical music.”
—W. T. Lhamon, U.S. educator, critic. Material Differences, Deliberate Speed: The Origins of a Cultural Style in the American 1950s, Smithsonian (1990)
“The real grounds of difference upon important political questions no longer correspond with party lines.... Politics is no longer the topic of this country. Its important questions are settled... Great minds hereafter are to be employed on other matters.... Government no longer has its ancient importance.... The peoples progress, progress of every sort, no longer depends on government. But enough of politics. Henceforth I am out more than ever.”
—Rutherford Birchard Hayes (18221893)