Chapter LXX: Section CCXII: Unproductive Consumption

Moreover, unproductive consumption embraces not only every economic loss, every outlay for injurious purposes,[212-1] but also every superfluous outlay for useful purposes.[212-2] Yet, not to err in our classification here, it is necessary to possess the impartiality and many-sidedness of the historian, which enable one to put himself in the place of others and feel after them as they felt. The man, for instance, who, in cities like Regensburg and especially Rome, sees numberless churches often, so to speak, elbowing one another, cannot fail to recognize the difference between the buildings of to-day for business, political, educational and recreative purposes, and the medieval, for the satisfaction of spiritual wants. The latter also may, in their own sphere, and in their own time, have, as a rule, operated productively, as the former operate, often enough, by way of exception unproductively; as in the case of railway and canal speculations which have ended in failure. It would be difficult to decide between the relative value of the two kinds of wants, because the parties to the controversy do not, for the most part, share the want (_Bedürfniss_) of their respective opponents, frequently do not even understand it, and therefore despise it. Thus, there are semi-barbarous nations, who can entertain that respect for the laws which is necessary even from an economic point of view only to the extent that they see the person whose duty it is to cause them to be observed seated on a throne and surrounded by impressive splendor. Hence, such splendor here could not be considered merely unproductive consumption.[212-3]

We must, moreover, remark in this place as we did above, § 54, that it is easiest to pass the boundary line between productive and unproductive consumption in personal services. In 1830, the expenses of the state, in Spain, amounted to 897,000,000 of reals per annum; the outlay of municipal corporations, to 410,000,000, and that for external purposes of religion, 1,680,000,000. (_Borrego._) This is certainly no salutary proportion; but it is scarcely evidence of a worse economic condition than the fact that in Prussia it would require a basin one Prussian mile in length, thirty-three and eight-tenths feet broad, and ten feet deep to hold all the brandy drunk in the country (_Dieterici_); or this other, that the British people spend yearly £68,000,000 sterling for taxes and £100,000,000 yearly for spirituous liquors.[212-4] Berkeley rightly says that the course practiced in Ireland, with its famishing proletarian population, of exporting the means of subsistence and exchanging them against delicate wines, etc., is as if a mother should sell her children's bread to buy dainties and finery for herself with the proceeds.[212-5] [212-6]

[Footnote 212-1: Thus, for instance, food which spoils
unused, and food which is stolen and which puts a thief in a
condition to preserve his strength to steal still more.]

[Footnote 212-2: So far _Senior_, Outlines, 66, is right:
the richer a nation or a man becomes, the greater does the
national or personal productive consumption become.]

[Footnote 212-3: Such gigantic constructions as the palaces,
pyramids, etc. of Egypt, Mexico or Peru are a certain sign
of the oppression of the people by rulers, priests or
nobles. One of the Egyptian pyramids is said to have
occupied 360,000 men for twenty years. (_Diodor._, I, 63;
_Herodot._, II, 175; _Prescott_, History of Mexico, I, 153,
History of Peru, I, 18.)]

[Footnote 212-4: Edinburg Rev., Apr., 1873, 399.]

[Footnote 212-5: _Berkeley_, Querist, 168, 175, says that
the national wants should be the guiding rule of commerce,
and that besides, the most pressing wants of the majority
should be first considered.]

[Footnote 212-6: _Ricardo_, Principles, p. 475, was of
opinion that an outlay of the national or of private income
in the payment of personal services increased the demand for
labor and the wages of labor in a higher degree than an
equal outlay for material things. The error at the
foundation of this is well refuted by _Senior_, Outlines,
160 ff.

The first to zealously advocate and treat the theory of
productive consumption was _J. B. Say_, Traité, III, ch. 2,
seq.; Cours pratique, II, 265. But the germs of the doctrine
are to be found in _Dutot_, Réflexions politiques sur le
Commerce et les Finances, 1738, 974, _éd_. Daire. His
distinctions are in part drawn with great accuracy. Thus he
says that, among others, a manufacturer of cloth,
productively consumes the results of his workmen, but that
the workmen themselves who exchange these results for bread,
consume the latter unproductively. _Say_ is guilty of the
inconsistency of claiming that only that consumption is
productive which contributes directly to the creation of
material exchangeable goods, spite of the fact that he gave
the productiveness of labor a much wider scope. _Rau_,
Lehrbuch, I, § 102 ff., 323 seq., is more consistent in so
far as he applies the same limitation in both cases.
(Compare also § 333, 336.) _Hermann_, Staatsw.
Untersuchungen, 170 seq., 231 ff., would prefer to see the
idea of productive consumption banished from the science,
for the reason that if the value of the thing alleged to be
consumed continues, there can be no such thing as its
consumption. But, I would rejoin: in a good national
economy, there would be, according to this, scarcely any
consumption whatever, because the aggregate value of that
which I have called above productive consumption is
unquestionably preserved, and continues in the aggregate
value of the national products.

Productive consumption is ultimately a stage of production,
just as production itself is ultimately a means to an end,
consumption, and therefore a preparation for the latter.
Both ideas may be rigorously kept apart from each other,
just as the expenses and receipts of a private business man,
who makes a great portion of his outlay simply with the
intention of reaping receipts therefrom, may be. Every one
desires his production to be as large as possible, and his
productive consumption, so far it does not fail of its
object, as small as possible. _Riedel_ rightly says that the
theory of reproductive consumption serves Political Economy
as the bridge which closes the circle formed by the action
of production, distribution and consumption. (Nat. Oek. III,
49.) One of the chief fore-runners of the view we advocate
was _McCulloch_, Principles, IV, 3 ff. _Gr. Soden_, Nat.
Oek., distinguishes economic consumption, un-economic and
anti-economic consumption. (Nat. Oek., I, 147.)]