Adam Smith's Concept of Productive and Unproductive Labour: an Interpretation

This note explores Smith's employment of the concept of 'productive labour', a concept which
commentators have frequently found problematic. We suggest that Smith’s difficulty in
formulating a satisfactory definition of ‘productive labour’ stems from the fact that he seems to
have had in mind - and to have tried to combine - two different (but only independently valid),
concepts of productive labour: one (anticipating Marx) in respect of labour whose employment
yields surplus value to the capitalist, the other (presaging Sraffa) focusing on labour employed
in certain necessary or ‘basic’ industries within the economy.