I’ve read On The Wealth of Nations, Adam Smith’s most influential writing. While I don’t proclaim to be an expert on the man, I think I’ve read enough to write a short blog article quoting some of his thoughts.

-Scott

Blogging about Adam Smith when one has not read Adam Smith is non-productive.

As I said, this is Smith’s definition, not mine. I also believe exercising is important.

Ideal Ratio? Not sure. It would depend on what you define as productive.

100% probably isn’t ideal. There are things worth doing that aren’t productive at all.

-Scott

I agree with several of the above, and must disagree with your conclusion that, by the definitions you provided, eating, sleeping, and exercising are unproductive activities.

First, these definitions (“Productive labor, according to Smith, was any work which fixed itself in a tangible object. Unproductive labor, was any work where the value was consumed as soon as it was created.”) do not cover all cases. It is possible to create intangibles whose value are not immediately consumed — see Mark’s comments about software above.

Second, let us recall that in Smith’s day, slavery was still an accepted practice, and as such, some human beings were considered goods to be traded. A healthy human being was more useful and thus worth more than an unhealthy one, so I suspect activities that maintain one’s health (and more particularly, activities that maintain the health of one’s slaves) would be considered very productive! The end product of a healthy, strong laborer was more valuable than the end product of a sickly, weak servant.

Third, setting aside the idea of slavery, as we now recognize that it is an unacceptable way of treating other human beings, I believe the key points Smith was getting at were the permanence of the result and its economic value, not its tangibility. As a healthy, happy human being, you are capable of creating much more value for others and of deriving more income from the sale of that value than if you exhaust yourself, malnourish yourself, or fail to keep yourself in shape. Time invested in yourself creates a very tangible benefit: a healthier body, which can be measured in several ways.

Similarly, finishing assignments should eventually result in a tangible result (a degree), and reading (depending on the material) can result in a better-educated mind capable of more economically feasible activities. Answering emails is tougher to defend, but even that can result in a stronger business network which has its own economic benefits.

I find it extremely difficult to claim that in any of these cases, “The effort spent doesn’t fix itself in an investment.” And I certainly don’t believe that in any of these cases, “the value was consumed as soon as it was created.”

I certainly agree, however, that it is an interesting subject of discussion, and I enjoyed reading your post and seeing the comments that it prompted. And I certainly agree with your thoughts about the differing amounts of value that can be derived from your time — I wrote about wasting, spending, or investing time in my LiveJournal at http://talonstrike.livejournal.com/76033.html last year (and followed up at http://talonstrike.livejournal.com/78216.html). I consider even recreation to be time well-invested if done in moderation — time invested in avoiding burn-out.

Question: What do you think is the ideal ratio of productive work? Do you think a productivity ratio of 100% should be the goal?

I’m sure I’ve probably made some misleading statements about Adam Smith.

I wasn’t really trying to explain his thoughts on the difference between productive and unproductive labor as it affects an economy. I was just using his somewhat interesting definition as a starting point for my own discussion.

But thanks for clarifying.

-Scott

However, it is a useful hook upon which to account for what Adam Smith was talking about in respect of the categories of productive and unproductive labour, which is relevant for his understanding of how economies work.

“Productive labor, according to Smith, was any work which fixed itself in a tangible object. Unproductive labor, was any work where the value was consumed as soon as it was created. Smith contrasted the role of laborers in a manufacturing plant (productive work) with the tasks of a servant (unproductive work).”

This is about where most people impute conclusions about misleading distinctions.

So what was Adam Smith getting at? I have explained this on my blog, http://www.adamsmithslostlegacy.com but it may be too long to reproduce here as a comment.

Gavin Kennedy
Emeritus Professor, Heriot-Watt University

Many other books about wealth and economics were written before Smith made an appearance, and many other economists admit this. But, The Wealth of Nations was the book that happened to spur on the academic discipline.

Diego,

Just be glad you didn’t have to read the entire 900 pages…

-Scott

Look into it.