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Adam Smith on the service sector

January 8th, 2004 (03:18 pm)

current mood: surprised

A startling line from Adam Smith:

"The sole use of money is to circulate consumable goods."

Yes, really! He believed that any work which did not create or enhance some consumable good was unproductive. He spends pages on this. His main beef seems to be with wealthy people being profligate, e.g., by hiring large numbers of servants; but he even includes doctors in the category of unproductive labor.

Given this viewpoint, he (and his adherents) naturally categorize all government as unproductive. Smith admits that it may be honorable, even necessary, but never productive. So, next time you hear a Republican class warrior cite Adam Smith on government, remember that Smith had a very narrow point of view.