4. Adam Smith’s Second Explanation: the View of Productive Labour as Labour Which Is Realised in a Commodity
It is the fact that capitalist development leads to a situation where all commodities are produced capitalistically, as it brings about a simultaneous rise in productivity, whilst it is only those personal services, which with minor exceptions, comprise only various types of concrete labour, which leads Smith to introduce these additional and incorrect conceptions into his definition of productive labour.
Describing this train of thought of Smith, Marx writes,
“It (the labour of the unproductive labourer) is “unproductive of […] value”, “adds to the value of nothing”, “the maintenance” (of the unproductive labourer) “never is restored”, “[it] does not fix or realise itself in any particular subject or vendible commodity”. On the contrary, “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”. Finally, his labour “does not fix or realise itself in any permanent subject or vendible commodity”.” (p 161)
As Marx says, Smith's terminology here is different from that he used initially. Rather than productive of surplus value being the determinant, it is merely productive of value. Now, productive means only then an amount of new value is created equal to what the worker has received as wages.
“In this case it is the same as if the labourer himself owned his conditions of production. He must each year deduct the value of the conditions of production from the value of his annual product, in order to replace them. What he consumed or could consume annually would be that portion of the value of his product equal to the new labour added to his constant capital during the year. In this case, therefore, it would not be capitalist production.” (p 162)
On the one hand, Smith falls into the error, because he wants to oppose the Physiocrats conception that it is only agricultural labour that is productive. So, in opposition to them, he writes,
“The superior produce of the one class, however, does not render the other barren or unproductive” ([Wealth of Nations O.U.P. edition, Vol. II, pp. 294-95], [Garnier], l.c., t, III, p. 530).” (p 163)
But, the basis upon which he makes this argument itself falls into the Physiocratic error, because he also writes that the agricultural labour is superior, in other words it produces a surplus value, whereas the manufacturing labour is productive because it merely reproduces value. As Marx points out, in using this argument, Smith also effectively abandons his own definition of surplus value itself as surplus labour-time, and sinks back into the Physiocratic definition of surplus value as a surplus of use values.
If a farmer grew sufficient food to meet their necessary requirement, any food they produced above this was a surplus value. This surplus food could then sustain a number of manufacturing workers. The value of the labour-power of those workers was equal to this quantity of use values. It was only this value – their wages – which they added to any production. If they took a quantity of say flax from the farmer, and spun it and wove it into linen, which they then sold back to the farmer, for the Physiocrats, the value of the linen was equal to the quantity of flax used in the production, plus the quantity of food consumed by the manufacturing worker.
The latter, thereby, only reproduced in the linen the use values required for its production – a quantity of flax and a quantity of food for the worker. Smith in his argument basically accepts this conception – which is also one reason why he gets into a muddle over labour and labour-power, himself concluding that the value of the commodity is comprised of the value of material and the value of wages, which makes it then impossible to derive surplus value.
But, because Smith conceives that manufacturing labour is productive – in part because he recognises that the Wealth of Nations, particularly Britain, has arisen on the back of a massive expansion of this manufacturing production – he has then to include this false definition of productive as merely reproductive of value, rather than productive of surplus value.
“He therefore drops the definition by social form, the definition of what a “productive labourer” is from the standpoint of capitalist production; and asserts, in opposition to the Physiocrats, that the non-agricultural, industrial class reproduces its own wages, that is, it does after all produce a value equal to the value it consumes, and thereby “continues, at least, the existence of the stock of capital which employs it”. Hence arises, under the influence of and in contradiction to the Physiocrats, his second definition of what is “productive labour.” (p 163)