““The demand for productive labour, by the increase of the funds which are destined for maintaining it, grows every day greater and greater. Labourers easily find employment; but the owners of capitals find it difficult to get labourers to employ. Their competition raises the wages of labour, and sinks the profits of stock” ([ibid., p. 395], [Garnier], l.c., t. II, p. 359).” (p 264)
Smith's concept of accumulation can perhaps be glimpsed from this comment also, that its basis is the fact that the means of consumption annually increase, and given that he argues that commodities can always command more labour than that required for their production, this steadily rising mass of commodities provides the basis for a continued rise in the labour commanded.
As Marx notes, Smith equates accumulation with the increase in the variable capital, a mistake also made by Ricardo. But, as Marx notes, at the time Smith was writing, the amount of constant capital used by workers, in production, was much smaller. But, Smith's comment here, about this steadily rising level of demand causing wages to rise, is also at the root of the Law of Falling Profits developed by Smith, Ricardo, Malthus and others, which Marx demolished in Capital III, and more specifically in Theories of Surplus Value II, Chapter 17.
Marx notes that Smith here develops yet a further definition of productive labour. Smith divides capitals into those which employ more or less productive labour and consequently raise the exchange value. There is an element here, perhaps, of Marx's development of the organic composition of capital, and the recognition of its role in relation to the value of commodities and rate of profit.
Smith orders these capitals as agriculture, manufacture, commerce and retail.
“On the whole he sees their productivity in the fact that they put into motion productive labour.” (p 264)
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