Chapter 9 Chapter III Production, Consumption, Labor, Necessities

Section 1 What human beings can produce and consume is utility, not material itself. Humans cannot create material things.It is true that in the spiritual and moral spheres man can generate new ideas; but when we say that he produces material things, he really only produces utility; or in other words, the result of his efforts and sacrifices is only the transformation of material form or arrangement, which makes it better suited to the gratification of desires.In nature, all he can do is to arrange matter to make it more useful, as out of wood to make a table, or to contrive that matter can be made more useful by nature, as by sowing a seed in the power of nature to make it grow The place.

It is sometimes said that the merchant does not produce: the carpenter who makes the furniture produces the furniture, and the furniture merchant only sells what has been produced.However, this distinction has no scientific basis.They both produce utility, and neither produces anything else: the upholsterer moves and rearranges matter to make it more useful than it was before, and the carpenter does no more than that.The sailors and railroad workers who carry coal on the ground produce coal as well as the miners extract it underground; the fishmonger helps move fish from where it is needed less to where it is needed more, and what fishermen do But that's all.Often, it is true, there are more merchants than there is need; and whenever this happens, it is a waste.However, it is also a waste if two people do the farming work that one person can do.In both cases all those who work produce, though they may produce little.Some writers repeat medieval attacks on trade on the grounds that trade is unproductive.However, they got the target wrong.It is the imperfect organization of trade, especially retail trade, that they should attack.

Consumption can be seen as negative production.Just as man can produce nothing but utility, so man can consume nothing but utility.He can produce services and other immaterial things, and he can consume them.But just as his production of material products is really nothing but a rearrangement of matter to give it a new utility, so his consumption of these products is nothing but a disorder of the arrangement of matter, lessening or destroying its utility.Indeed, often when we speak of a man consuming things, he merely holds them for his use.At the same time, as Senior puts it, these things "are destroyed by those many progressive forces which we collectively call time."

Another distinction, which was once quite important, but is now vague, and probably of little practical use, is that on the one hand there are consumer goods, also called consumer goods or first-order goods, such as food, Clothes, etc., are things that directly satisfy desire; and on the other hand, producer goods, also called production goods or also called instrumental or intermediate goods, such as ploughs, looms, and raw cotton, etc. It is the distinction between those things which contribute to the production of first-order goods and which indirectly satisfy desires. The word produced in Section II is misleading and should generally be avoided or interpreted.

All labor is employed to produce a certain result.For although some efforts are made only for the sake of effort, as a kind of competition for amusement, these efforts are not counted as labour.We may define labor as follows: Labor is any mental or physical exertion, in part or in whole, aimed at obtaining some advantage, rather than directly deriving pleasure from such effort.If we had to start over, we had better regard all labor as productive, except that which does not contribute to the end which it is intended to achieve and therefore does not produce utility.But among the many changes which the meaning of the word "productive" has undergone, its meaning has been especially concerned with accumulated wealth, and is more neglected, and sometimes even excluded, of immediate and momentary enjoyment.An almost unbreakable tradition compels us to regard the central concept of the word as meaning the satisfaction of desires in the future rather than in the present.It is true that all wholesome enjoyment, whether luxurious or not, is a just end of public and private activity; and it is true that luxurious enjoyment provides impetus to effort, and promotes progress in many respects.But, if there is no effect on the efficiency and energy of the industry, abandon the desire to acquire temporary luxuries, and devote yourself first to the acquisition of those more solid and permanent resources, which will assist the future work of the industry and will be used in every way. A richer life often advances a nation's real interests.This general idea seems to have been studied at all stages of economic theory; and to it various writers have drawn fixed distinctions according to which certain trades are classified as productive. , some industries are not productive.

For example, even many writers of recent times have stuck to Adam Smith's approach of classifying the labor of domestic servants as unproductive.No doubt there are too many servants in many large families, and some of their energies might be good for society if they were employed elsewhere: but so are the majority of those who distill whiskey for a living; Economists suggest calling them unproductive.The work of a baker who supplies bread for a family is not different in character from that of a cook who cooks potatoes.If the baker were a confectioner, or a good baker, he would spend as much time on unproductive labor—in the common sense labor that provides unnecessary enjoyment—as much time as Home cooks spend at least as much.

Whenever we use the word production by itself, we should know that it refers to the production of means of production and permanent sources of enjoyment.But it is an elusive term and should not be used where precision is required. If we want to use the word in a different sense, we must explain it: for example, we can speak of labor producing necessities, etc. Consumption of production, when used as a term, is usually interpreted to mean the use of wealth in order to produce more wealth.It should include not all the consumption of the productive workers, but that which is necessary to maintain their efficiency.

The term may be useful when studying the accumulation of material wealth.But it's misleading.For consumption is the end of production; all useful consumption produces profit, and many of the most valuable benefits do not contribute directly to the production of material wealth. The third section is about the necessities of life and the necessities of efficiency. This brings us to the term necessities.The distinction between necessities, comforts, and luxuries is simple; the first class includes everything necessary to satisfy desires that must be satisfied, and the latter two classes include things that satisfy desires that are not so urgent as the first class.But here again there is a troublesome ambiguity.When we say that a desire must be satisfied, what is the result in our mind if it is not satisfied?Does this result include death?Or is the result simply a loss of strength and energy?In other words, are necessities what is necessary to sustain life, or what is necessary to maintain efficiency?

The term necessities, like that of production, is used elliptically, and what it signifies is for the reader to add; things, thus misunderstood the author's intention.Here, as in the above cases, the chief source of confusion can be eliminated by stating clearly at every point what is to be understood by the reader. The older usage of the term necessities was limited to those things which are sufficient to enable the laborer in the main to maintain himself and his family. Adam Smith, and the more cautious of his followers, did see a difference in the standards of comfort and "elegance": and they recognized that differences of climate, of customs, made things necessary in some cases, In other cases it is redundant.Adam Smith, however, was influenced by the theory of the Physiocrats: a theory based on the condition of the French people in the eighteenth century, when the majority of the French knew nothing except what was merely necessary for survival. What else is necessary.In happier times, however, a more careful analysis has made it clear to us that, at any time and place, for every industry, there is a more or less definite revenue which maintains only the persons in that industry. necessary for subsistence; at the same time, another, larger income is necessary to maintain the full efficiency of the industry.

It may be true to say that the wages of the laborers of any industrial class, if they spend their wages very wisely, may be sufficient to maintain a high degree of efficiency.But all estimates of necessities must be made with reference to a definite place and time; and, barring special statements to the contrary, we may presume that they spent their wages with the same degree of sagacity, foresight, and disinterestedness as the industry in question The same is true of the actual prevalence of class.Knowing this, we may say that, where the income of any industrial class is below its necessary level, an increase in the income of the laborers will over time lead to a more than proportional increase in their efficiency.A change of habit may save consumption, but saving in necessaries is uneconomical.

Section 4. There is a loss when anyone consumes less than is strictly necessary to maintain efficiency.customary necessities. When we study the causes which determine the supply of efficient labour, we must make a detailed study of the necessities for maintaining the efficiency of the various kinds of workers.But our ideas may be clarified here if we consider what is necessary for the maintenance of the efficiency of the average agricultural or unskilled urban laborer and his family in England in this generation.We may say that the necessities consist of the following: a dwelling with several rooms and a good sewer, warm clothing with some change of underwear, clean water, a plentiful and properly replenished supply of meat and Milk and a little tea, etc., a little education and entertainment, and finally, his wife has enough freedom after other jobs to do her motherly and housekeeping duties properly.An unskilled workman who is anywhere wanting either of these things is as injurious to his efficiency as a badly bred horse or a steam engine without an adequate supply of coal.All consumption up to this limit is strictly productive consumption: any savings in this consumption are not economical but result in losses. Moreover, some consumption of liquor and tobacco, and a fondness for fashionable dress, may be so customary in many places that they may be said to be customary necessities, for the common man and woman will sacrifice some maintenance of efficiency in order to acquire them. necessary things.Their wages, therefore, will be less than are actually necessary for the maintenance of efficiency, unless their wages cover not only strictly necessary consumption, but also a certain amount of customary necessities. The consumption of the customary necessities of the productive worker is usually included in the category of productive consumption: but strictly speaking, it should not be included in this category of consumption; special explanatory sentences should be added to explain the customary consumption at critical points in the article. Whether the above necessities are included. We should also note, however, that many things which are rightly called superfluous luxuries are also to some extent considered necessities; , their consumption is also produced.