The Wealth of Nations

The Wealth of Nations

by

Adam Smith

Productive Labor Term Analysis

Productive labor is work that adds value to the economy by yielding a finished product that is worth more than the capital spent creating it. There are four kinds of productive laborers: farmers, manufacturers, wholesalers, and retailers.

Productive Labor Quotes in The Wealth of Nations

The The Wealth of Nations quotes below are all either spoken by Productive Labor or refer to Productive Labor. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
Labor, Markets, and Growth Theme Icon
).
Book 2, Chapter 5 Quotes

No equal capital puts into motion a greater quantity of productive labour than that of the farmer. Not only his labouring servants, but his labouring cattle, are productive labourers. In agriculture, too, Nature labours along with man; and though her labour costs no expense, its produce has its value, as well as that of the most expensive workmen. [...] The labourers and labouring cattle, therefore, employed in agriculture, not only occasion, like the workmen in manufactures, the reproduction of a value equal to their own consumption, or to the capital which employs them, together with its owner’s profits, but of a much greater value. Over and above the capital of the farmer, and all its profits, they regularly occasion the reproduction of the rent of the landlord. This rent may be considered as the produce of those powers of Nature, the use of which the landlord lends to the farmer.

Related Characters: Farmers, Landlords
Page Number: 462–463
Explanation and Analysis:
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Productive Labor Term Timeline in The Wealth of Nations

The timeline below shows where the term Productive Labor appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 2, Chapter 3
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Some labor is productive, because it adds value to the object it acts upon, and some labor is unproductive... (full context)
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
The more a country’s laborers are productive, the more it will produce in the future. Indeed, its annual produce must maintain all... (full context)
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
Thus, the proportion of revenue that goes to replace capital helps determine the ratio of productive to unproductive labor. This portion is high in 18th century Europe, both in agriculture and... (full context)
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Mercantilism and Free Trade Theme Icon
Money and Banking Theme Icon
...saving a portion of their annual revenue to invest. This enables them to employ more productive labor and increases the value of their annual produce. Rich people may spend some of... (full context)
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
...avoid bankruptcy. The same isn’t true of public funds, which tend to be spent on unproductive workers. When their number grows too high, the economy starts to shrink. But responsible private... (full context)
Capital Accumulation and Investment Theme Icon
...class. Buying durable things is easier to stop and employs more people than simply paying unproductive laborers. (full context)
Book 2, Chapter 5
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
...to customers. People who work in these four kinds of activity—farmers, manufacturers, wholesalers, and retailers—are productive laborers. (full context)
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Mercantilism and Free Trade Theme Icon
Different kinds of wholesale trade also employ productive labor and add to the annual produce to different extents. Rather than sending their ships... (full context)
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Institutions and Good Governance Theme Icon
Mercantilism and Free Trade Theme Icon
In general, then, it is more productive for a country to invest in domestic trade than foreign trade or the carrying trade.... (full context)
Book 4, Chapter 9
Labor, Markets, and Growth Theme Icon
Capital Accumulation and Investment Theme Icon
Mercantilism and Free Trade Theme Icon
The agricultural system is wrong to call artisans, manufacturers, and merchants unproductive. Even if they don’t produce a surplus like farmers, they still generate enough revenue to... (full context)
Book 5, Chapter 2
Institutions and Good Governance Theme Icon
...increase the state’s revenue by taking away capital stock that would otherwise be invested in productive labor. Transfer taxes are unequal, since some people transfer property more often than others, but... (full context)