““Thirdly, it seems, upon every supposition, improper to say, that the labour of artificers, manufacturers, and merchants, does not increase the real revenue of the society. Though we should suppose, for example, as it seems to be supposed in this system, that the value of the daily, monthly, and yearly consumption of this class was exactly equal to that of its daily, monthly, and yearly production; yet it would not from thence follow, that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the society. An artificer, for example, who, in the first six months after harvest, executes ten pounds worth of work, though he should, in the same time, consume ten pounds worth of corn, and other necessaries, yet really adds the value of ten pounds to the annual produce of the land and labour of the society.”” (p 168)
Smith's argument is that an individual worker may take £10's worth of material, and during the year, they will add to its value, as a result of their labour. As described earlier, this added value, of their labour, he confuses with their wages. So, he says that if their wages amount to £10's worth of corn during the year, they will have added £10's worth of value by their labour. Now, a product with a value of £20 exists, where previously £10 of material existed, and £10 of corn. In this Smith fell into a Physiocratic error.
However, Smith says the productive nature of this labour is witnessed by the fact that this new product, with a value of £20 exists. By contrast, he says, if this corn had gone as food to a soldier or servant, it would have been consumed without anything to show for it. There would be no new product or value, he continues.
“Though the value of what the artificer produces, therefore, should not, at any one moment of time, be supposed greater than the value he consumes, yet, at every moment of time, the actually existing value of goods in the market is, in consequence of what he produces, greater than it otherwise would be” ([Wealth of Nations, O.U.P. edition, Vol. II, pp. 295-96], [Garnier], l.c., t. III, pp. 531-33).” (p 168)
But, Marx says, this is quite clearly false, because although unproductive labour is unproductive of surplus value, it may be productive of value, in so far as it produces a use value.
“Is not the [total] value of the commodities at any time in the market greater as a result of the “unproductive labour” than it would be without this labour? Are there not at every moment of time in the market, alongside wheat and meat, etc., also prostitutes, lawyers, sermons, concerts, theatres, soldiers, politicians, etc.? These lads or wenches do not get the corn and other necessaries or pleasures for nothing.” (p 168)
The actor who gives a performance thereby creates additional value as a consequence of the expenditure of their labour. As a commodity, it has an exchange-value, and thereby exchanges for other commodities of equal value, either directly or via the mediation of money.
“Since here, as in every exchange of commodity for commodity, equal value is given for equal value, the same value is therefore present twice over, once on the buyer’s side and once on the seller’s.” (p 169)