The most scientific classification of pro ductive and unproductive descriptions of labour and expenditure which we have met with is that of Mr. Mill. Accord ing to his definition the following are always productive :—When their " direct object or effect is the creation of some material product useful or agreeable to mankind," or "to endow human or other animated beings with faculties or quali ties useful or agreeable to mankind, and possessing exchangeable value:' or "which, without having for their direct ob ject the creation of any useful material product, or bodily or mental faculty or quality, yet tend indirectly to promote one or other of those ends, and are exerted or incurred solely for that purpose." La bour and expenditure are said to be un productive when they are " directly or exclusively for the purpose of enjoyment, and not calling into existence anything, whether substance or quality, but such as begins and perishes in the enjoyment ;" or when they are exerted or incurred " uselessly or in pure waste, and yielding neither direct enjoyment nor permanent sources of enjoyment." (Essays on Unmet tied Questions of Political Economy, Essay III.) Examples of these several classes would transgress our limits, but a study of the above definitions may serve to correct an erroneous impression, that no expendi tiireasen2010tivtamlliffudf The most common form in which this error appears, is in a comparison of the ordinary expenditure of a gentleman living upon his income, with that of a person employing workmen in a produc tive trade. It is hastily assumed that the expenditure of the former is unproductive, but it is, in fact, of a mixed character. His servants, for instance, perform many labours of a productive character. His cook prepares food for his table, and thus adds the last process of a manufacture. In point of productiveness it is impossi ble to distinguish this necessary labour from that of a butcher or baker. His gardener is an agriculturist and directly productive. The upholsterer who makes his furniture is productive : and in what manner is the labour of his housemaid less productive, who keeps it fit for use? In the same manner, why is the labour of his butler less productive than that of the silversmith ; or of his coachman than that of the coach-builder and the breeder of horses? All are engaged, alike, in in creasing or continuing permanent sources of enjoyment. But the most important economical use of domestic servants is the division of labour which it creates. While they are engaged upon household services their employer is free to follow his own more important duties—the ma nagement of his estates, the investment of his capital, or the labours of his pro fession. It is not, therefore, in the em ployment of servants that expenditure is unproductively incurred, but in the employment of excessive numbers ; for then they are used directly and exclu sively for the purpose of an enjoyment " which begins and perishes in the enjoy ment." We will now briefly examine the na ture of productive and unproductive con sumption of perishable articles, and the effects of consumption, generally, upon production. Those who produce any thing have one object only in devoting their labour to it—that of ultimately con suming the thing itself, or its equivalent, in the form of some other product of labour. If the exchange be made in goods, each consumer is obviously also a produour, and adds to the common stock of enjoy ment as much as he withdraws from it. But money is the representative of the products of labour, and if given in ex change for them, the character of the transaction would appear to be the same as the direct interchange of the products themselves. In the case of productive labourers, it would be admitted to be pre cisely the same • but a distinction is taken when the labour of the consumer is itself unproductive. It is true that he offers the results of past labour, but his imme diate end in consuming is enjoyment. He parts with his money, which is an equi valent to the seller, but he produces no new source of enjoyment for society. But the consumption of a productive labourer may also be unproductive. Such part of his consumption as is necessary to keep him in health, to render him perfectly fit, in mind and body, for his employ ment, and to rear his children suitably, is all clearly productive. If any re sidue remain, and he spend it upon imme diate enjoyment—such as spirits, for ex ample, which vanish with the enjoyment —that portion of his consumption is un productive.
It must not be iniagined, however, that the only result of money spent upon un productive labour, or of unproductive consumption, is necessarily waste. The results of a man's labour may be unpro ductive to society, but a great part of his gains may be productively expended : and again, the maker and seller of commodities unproductively consumed are productive, and their profits may be productively ap plied. The distiller and the publican are productive labourers, but the consumption of spirits is itself unproductive.
We are now enabled to confine our attention to the uses of capital, as applied to its most important end, the employ ment and aid of productive industry. Its
first and most important use is the divi sion of employments, which, though necessary for any advance in arts, is im practicable without some previous mu mulation of capital. Until there is a fund for employing labour, every man's business is the seeking of his own daily food ; but as soon as the capital of another secures that for him, his labour is avail able for the general good. The more capital is accumulated, the more extended are the fkcilities for indefinite distribution of employments, according to the wants of the community.
Capital may be applied either directly in the employment of labour, or directly in aid of labour : it may be spent in the food and clothes of labourers, or in tools and other auxiliary machinery, to assist their labour and increase its productive ness. The former is usually termed cir culating capital, and the latter fixed ca pital. Both are equally essential to the progress of the arts and national wealth, and are used in combination ; but the effects produced by each are not always the same. If a farmer employs three labourers, and his capital is afterwards doubled, it is a very important question whether he expend his increased stock in the payment of three additional labourers, or in providing auxiliary machinery to increase the power of the three labourers already employed. In the latter case we may be assured that his machinery will do the work of more than three men ; for otherwise no ingenuity would have been applied to its contrivance. It is truly said by Professor Jones, that " when, in stead of using their capital to support, fresh labourers in any art, (a people) prefer expending an equal amount of capital in some shape in which it is assistant to the labour already employed in that art, we may conclude with per fect certainty, that the efficiency of human industry has increased relatively to the amount of capital employed." (Distri bution of Wealth, p. 222.) The same able writer has pointed out another differ ence in the results of auxiliary capital, viz. " that when a given quantity of ad ditional capital is applied, in the results of past labour, to assist the labourers actually employed, a less annual return will suffice to make the employment of such capital profitable, and therefore permanently practicable, than if the same quantity of fresh capital were expended in the support of additional labourers." (Ibid.g. 224.) This circumstance arises from the greater durability of the fixed capital, which may not require renewal for several years, while the direct expen diture on labour must be renewed an nually. Thus 100/. spent in labour to muse a profit of 10 per cent. must pro duce results amounting in value to 110l.; but the same sum expended upon any machinery calculated to last for five years would be equally well repaid by a return of 30/. a year ; being 10/. for profit upon the outlay, and 20/. for the annual wear and tear of the capital.
Not only does capital facilitate divi sions of employment, and increase the productiveness of industry, by which the enjoyments of man are multiplied, but it' actually produces many sources of power and enjoyment, which without it could have no existence. It is the foundation of all social progress and civilization, for without it man is but a savage. It must precede his mental culture, for until it exists his noble endowments are idle or misemployed. Without it, his mind is a slave to 'the wants of his body : with it, the strength of others becomes subservient to his will, and while he directs it to in crease the physical enjoyments of his race, his intellect ranges beyond the common necessities of man, and aspires to wisdom—to government and laws—to arts and sciences. In all the nations of the world riches have preceded and in troduced intellectual superiority. Con nected with the progress of the human intellect, the printing press is an apt example of the creations, ao to speak, effected by capital. No dexterity of fin gers, no ingenuity of contrivance, unaided by the results of former labour, could multiply copies of books. Without abun dance of types and flames and other appliances of the art, secured by ca pital, the bare invention of printing would be useless ; and its wonderful efficacy, in the present age, may be ascribed as much to the resources of capital as to human ingenuity. In num berless other processes of art capital en ables work to be executed which could not otherwise be performed at all, or en ables it to be performed better and in less time. In all ways it multiplies indefi nitely the varied sources of enjoyment that are offered to civilized man ; but never more conspicuously than when it stimulates and encourages invention. Look at the railways of Great Britain. What created them ? The abounding capital of the people, which, overflowing the ordinary channels of investments, found a new channel for itself. In ten years the land was traversed by iron roads, and millions of people were borne along by steam with the speed of the wind.