Goods which_ possess value are known as wealth. Such goods are sometimes furnished freely by nature, but the fact that they are furnished freely by nature does not make them free goods. They are free goods only when they are at hand in such quantities as to satisfy all desire for them. Meteoric iron which falls from the heavens is furnished by nature without effort on man's part. But the supply is limited in relation to the desire for it and therefore it constitutes wealth. Seaweed, valuable as fertilizer, is in some places washed up on the coast in limited quantities. Such seaweed, where the desire for it exceeds the supply, is valuable even though man has as yet expended no effort upon it. But most of the economic goods, or wealth, with which we are familiar are economic goods because man has cooperated with nature in their production; that is, human exertion has been added to the bounty of nature to produce the goods. Labor is human exertion applied in the production of wealth. Human exertion is sometimes pleasurable and sometimes arduous, but whether pleasurable or arduous, if it is directed towards the production of wealth, it is called labor. On the other hand, human exertion directed to some other end, for example, exertion for the sake of the pleasure which it gives to the one undergoing the exertion, as in the case of play, is not labor. The distinction between work and play depends therefore not upon the pleasurable or disagreeable character of the exertion but upon the purpose of the exertion.

51. Labor Mental As Well As Physical

In assisting nature in the production of wealth man cooperates with head as well as with hand. The effort of mind as well as the effort of muscle is labor in the economic sense. In fact it will be found upon investigation that there is no clear-cut distinction between brain work and hand work. The lowest class of physical labor contains some element of mental effort, while the highest grade of mental labor is not without some accompanying physical effort. Between these two extremes there is a large field of effort where it is impossible to say how much is physical and how much mental.

52. The Social Versus The Individual Viewpoint In Production

Labor may be employed in the production of wealth with the result that the total of wealth in the world is larger than it would otherwise be. In that case there is production from the social viewpoint as well as from the viewpoint of the individual. On the other hand, labor may be employed in producing wealth for the individual, but with the result that the total wealth in the world is smaller or is not increased because of the production. For example, a lawyer succeeds by the exertion of much effort in having the legal title to property diverted from one person to another without recompense to the earlier owner. Here one individual has benefited at the expense of another. Production in this sense is acquisitive production. This is production only from the standpoint of the individual who is benefited. It is not production from the social viewpoint.

53. The Physiocrats On Labor

A group of economists who flourished in France in the second half of the eighteenth century and who have since been known as Physiocrats held that labor is productive only when employed in the extractive industries, i.e. in agriculture, mining, fishing, etc., where the raw material is taken from nature to be worked up into wealth. In manufacturing and trade and transportation, on the other hand, according to the Physiocrats, labor is not productive.

54. The Socialists On Labor

The so-called scientific socialists hold that labor not only is productive but that it is the only thing which is economically productive. Capital and land are material means of production, they say, but are not themselves productive. As we shall see later, the socialists use this claim to show that labor should receive the whole of the product of industry.

55. The Productivity Of Labor

Anything, the presence of which increases, or the absence of which decreases, the amount of wealth produced, may be said to be productive. Labor whether employed in agriculture or manufacturing or trade or transportation does increase the amount of wealth through the creation of form, place, time, and possession utilities, and therefore, labor in all of these lines is productive.

56. Other Things Productive

But there are other things than labor which are productive. Without land there can be no production, and, other things being equal, the more land there is the more production there is. A country without capital is a less productive country than a country with capital. A country in which industry is well organized is a more productive country than one where it is poorly organized. Therefore, not only is labor productive in the extractive industries, and in manufacturing, trade, and transportation, but so also are land and capital as well as business organization or enterprise.