The Myth of the Productive Class

Turn on any conservative talk radio show or scan through a few conservative blogs and you’re likely to find references to the over-taxing and planned extinction of the “productive class”. To the champions of this so called productive class, it seems that every politician who favors increasing taxes to fill recession induced budget craters is a mindless left-wing lunatic with a severe case of Cranial Rectal Inversion(1).

Although I may be in violent agreement that many of our elected officials and their media lap dogs have acute cases of CRI, I think the belief that a limited number of the citizenry are the sole producers of economic wealth is laughable.

The notion of a productive class was first put forward by a group of quasi-economists known as the Physiocrats. The Physiocrats believed that the wealth of nations was derived solely from the value of land used for agriculture or for development, as long as that development meant more agriculture. In the ultra-hip salons of eighteenth century France the belief that wealthy landowners were masters of the universe and without them economic development would devolve to the level of hunter gatherers must have been comforting, especially to wealthy landowners who were the only people with time enough to hang out in ultra-hip salons.

Among the Pysiocrats Francois Quesnay (1694 – 1774) is probably the best known through his magnum opus Tableau Economique. To sum it up (believe me, trying to read this stuff in a book called The Pillars of Economic Understanding is searingly painful even for your beloved shade tree uber-nerd) Quesnay divided economic players into three groups to explain how wealth is created and transferred:

The Productive or cultivator class who were the sole generators of wealth and made the economy hum.

The Proprietor or landowning class who although not thoroughly described in the four or five pages of Pillars I was able to get through seem to fill the role of Mr. Potter in It’s a Wonderful Life.

The Sterile or the artisan and manufacturing class, think of Fred G. Sanford or Mr. Brown from Chico and the Man, who were the poor slobs who made stuff and did all the work around your chateau.

Quesnay’s defense of the productive class centered on the belief that without their contribution the power of the state would diminish and the natural balance of society would be upended. The productive were all that stood between the righteous order of the day and chaos. A little series of events called the French Revolution would prove Quesnay either right or wrong depending on what side of history you fall on.

OK, so where am I going with all this? Well, first, it seems we have quite a few Quesnayists in our midst these days. And B, I believe the need to protect a productive class, if you agree that one exists, is ludicrous. If you accept my first point then allow me to focus on the second.

I agree that certain people in our society should be afforded levels of protection, be they economic or legal, that others don’t need. Take for example children or people with risky jobs like strippers (but only the ones that really like you. You know, the ones that tell you they really like you.) The risk with protecting a specific economic class in a capitalist economy is that it defeats the benefits of capitalism. By nature a capitalist economy is complex and dynamic. You don’t get dynamic if you don’t have complex. By isolating a specific group of participants through legal or economic protections not allowed others, you risk retarding the dynamism of the system. Laws and regulations should apply across the board. Favorable or punitive taxation and regulation is a sure path to economic stagnation.

From another perspective, one could argue that in our current highly diverse, complex economic system there are many ‘productive’ classes all contributing to national wealth. Who’s more productive? The entrepreneur who develops the idea for a product? The financier who funds development of the idea? The manufacturer or service provider who produces or provides the product? The consumer who purchases the product? Try getting something done without anyone of them and you’ll find yourself not being very productive.

Maybe instead of trying to identify who are society’s most productive in order to protect them, we should instead focus on identifying society’s least productive. I recommend the Lloyd Dobler classification as a start:

“I don't want to sell anything, buy anything, or process anything as a career. I don't want to sell anything bought or processed, or buy anything sold or processed, or process anything sold, bought, or processed, or repair anything sold, bought, or processed. You know, as a career, I don't want to do that.”

- Later

(1) Cranial Rectal Inversion – The condition of having one’s head up their ass.