ALLAMA IQBAL’S ECONOMIC THOUGHTS-II

LABOUR – AS FACTOR TO PRODUCE WEALTH

Translated from Urdu “ILM-UL-IQTISAD”

By: Abbas Ali

The second resource to produce wealth is labor. It refers to the physical or non-physical (mental) effort undertaken to achieve a goal, ignoring the pleasure and taste gained during the process of the effort. Nature provides the raw material or framework. But labor utilizes efforts upon its different types and, after transforming it into the required shape, makes it fit for fulfilling human need. Take the example of the shirt you are wearing. To bring it into the present useful shape, how much lengthy process of labour is required? On the same analogy, the writings of the scholars and writers, the intent of whom is the welfare of nations, and the dissemination of knowledge, etc., are examples of pure mental labor.

During the infant stage of culture and civilization, human needs are fulfilled automatically by the generosity of nature. Labor is not required, and so long as the situation lasts, commodities will not acquire the quality known as value. Man satisfies his needs with auto-grown fruits and hunting. The necessary result of this situation is that the population will remain limited, there will be continuous droughts, and to sustain life, there will be mutual wars among the human tribes. However, when man reaches pastoral mode from this savage state, labor comes into play in economic terms. In this state, humankind does not live on the generosity of nature but instead brings different wild animals under their control and digs canals for non-permanent sources of water.

As a preventive measure against draughts, humans also learn to store food and protect their animals. It implies that due to the above-mentioned types of labor, all those goods have become wealth, whereas they were devoid of this quality during man’s state of savagery. During this stage of civilization, populations increase day by day, and food not only becomes abundant but is also protected against external dangers because, due to the personal labor of humans, the frequency of draughts is checked and sustenance is guaranteed. Ultimately, this stage also passes and humans reach a developed stage, known as the agrarian stage, where they leave nomadism, populations continue to increase, and labor extracts the hidden treasures and other goods from land.

From the above discussion, it might have become clear that to produce wealth, labor is important. But we must remember that all the labor does not produce wealth; therefore, labor has been divided into two major types:

1. Profitable Labour
2. Non-Profitable Labour

Former type of labor implies that type of labor which directly or indirectly produces continuously additional wealth, and later type of labor implies that type of labor which does not produce additional wealth continuously. For example, the labor of builders, ironsmiths, soldiers, and teachers is profitable, whereas the labor of the manufacturer of firecrackers is not profitable. Because, instead of producing additional wealth, continuously manufacturing firecrackers decreases the nation’s wealth. For the sake of example, suppose there are two people living at a place. One has Rs. 10 and the other has Rs. 5.

It implies that their total capital equals Rs 15. Suppose the person having Rs 5 uses his capital in the manufacturing of firecrackers, and after the production of the said commodity, he takes it to his fun-loving friend, who buys the firecracker for Rs 10. Obviously, the total capital of the two, which was Rs 15 earlier, is now Rs 10, which is owned by the lover of the firecracker. Because fireworks provide temporary joy to their owners and disappear after a short time, all the non-profitable labor that is used for recreational purposes is, prima facie, profitable for others like the profitable labor. (As in the above-mentioned example, the firefighter considers Rs 5 as profit from his business; ultimately, it decreases the quantum of national wealth. Because the labor and capital utilized on such goods is like utilizing them in the manufacture of goods that after a short while lose their value and disappear, on this account they cannot become a source of creating additional wealth. If you ponder, you will come to know that the existence of both misers and hedonists is injurious to national wealth.

The misers like the hedonists destroy the wealth, because the wealth which is hidden in the boxes and is not used to create more wealth, its existence and non-existence has equal status. The point is that the use of labor and capital as profitable or non-profitable is dependent upon their capability of producing additional wealth. The labor of a teacher is profitable because he makes others capable of producing more wealth; likewise, the labor of a soldier is also indirectly profitable because he protects his country, which is an important condition for producing more wealth.

Likewise, the labor of other workers, such as builders, ironsmiths, etc., is profitable provided it is not used on the manufacture of recreational purposes. Because their labor produces such goods that keep producing additional wealth. Contrary to the labor of a lace manufacturer, the result of whose labor is a good that provides temporary joy or ease but, after a short while, gets destroyed, stopping the further creation of wealth. The above-mentioned distinction is based on the fact that in every country, there are certain workers and capitalists who use their labor and capital in the production of necessities of life, while others produce only for recreational and luxurious purposes.

However, it must also be kept in mind that with the development of culture and civilization, there occurs a metamorphosis in the circumstances of human life, thoughts, and strengths. It gives rise to the possibility that a good considered to be a recreational good a hundred years ago is now counted as a necessity of life on account of current moral circumstances. Therefore, at higher levels of culture and civilization, it is a bit difficult to distinguish between necessities of life and recreational goods, or, in other words, profitable labor and non-profitable labor. In this context, it is pertinent to state that there can be two objections to the above-mentioned explanation:

1. Suppose a teacher provides education to twenty boys; out of them, ten students succeed in getting respectable positions and become prominent, but the other ten students, due to their comfortable situation, opt for some employment or business. Obviously, according to the definition of profitable labor, the part of the teacher’s labor that was used on the education of the first ten students is profitable. Because that is creating further wealth; however, the part of education used for the other ten students is non-profitable because it does not continuously create further wealth. How is it possible that the same type of labor is profitable in one situation but not profitable in another? The answer to this objection is that economics searches for the cause of a fact and discusses that if certain factors are absent, then a certain fact will appear in a certain way. The labor of a teacher has the propensity to be profitable in both cases; however, in the second case, the carelessness of the students or other factors have occurred, so it has turned non-profitable.
2. You might ask, if calling a good profitable implies that it keeps on generating more wealth, then the money given to the lame, handicapped, and disabled as alms, too, is spent in a non-profitable way because it does not produce further wealth. Off course this is a correct idea, and thinking so, a famous English author writes that the principles and results of economics are exactly opposite to the personal opinions of a man. However, it must be borne in mind that even if, according to the principles of economics, money given as alms is not profitable, we cannot conclude that we should not give alms. Economics discusses facts, not the duties of a man. Superficially, for a fact to be correct, it does not imply that the fact is excluded from your ambit of duties. The determination of human duties is not the job of economics; they are decided on the principles of ethics. Ethics as a branch of knowledge is separate from economics. If we ponder, we will come to know that for the survival of the system of civilization and its strengthening, it is important that some part of national wealth be spent non-profitably.

After having understood the real meaning of this distinction, it is imperative to know that the production of labor in a country is dependent upon the following causes: Be the country in the pastoral or agrarian stage, or be culture and civilization on the highest stage of industry and trade.

1. Productivity of craftsmen and laborers
2. Division of labor, or dividing different actions and parts of labor in such a way that their specialization and management occur.

• Productivity of labor

The productivity of laborers is dependent upon various factors:

1. His hereditary courage and strength, which nature has provided him. The gift of nature is different for different nations. Certain nations are naturally strong and firm; certain nations are naturally weak and lean and comparatively feeble. The same is the case with individuals; however, to discuss the reasons for this divergence is not the domain of economics.
2. Quality and quantity of the food of the laborer
3. Health care facilities for the laborer, clean air, and living in a well-ventilated house bring a visible change in his health, which enhances his skillfulness.
4. Natural intelligence of the laborer. An intelligent laborer, as compared to a dullard, is in many ways a better worker.
5. He does not need to be a student for a longer period.
6. He does not need to be monitored.

• He wastes much less during the manufacturing of goods.

1. He quickly learns to operate a machine.
2. His wishes to run the race of life, which develops with real self-esteem and honor, and his belief in the fact that, with the increase in production from labor, his share will also grow,

Out of the above-mentioned causes, three are physical, the fourth is logical, and the fifth is ethical. Do you know that the labor of the slave cannot be compared to the labor of a free man? What is its cause? Why is the labor of a slave devoid of productivity?

It is evident that, like a free laborer, he does not have nor can he have the wish to run the race of life and supersede his companions. The fear of the whip cannot bring into action those strengths that come into motion with the desire for wealth and restlessness of self-esteem.

In the case of free laborers, certainty of wages is the strongest driving force, and if he is not working for an owner but is working for himself, he will strive more to enhance his productivity. The reason being that he considers himself the sole owner of the production resulting from his labor. Somebody has aptly said:

“Ownership rights are an elixir that transforms copper into gold.”

…to be continued

Ilm-ul-Iqtisad

Hisa Doyem “Paidaish-e-Dowlat”

Baab “Mehnat”

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