The concepts strongly influenced the construction of national accounts in the Soviet Union and other Soviet-type societies (see Material Product System).
Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master's profit.
The labour of the latter, however, has its value, and deserves its reward as wellAs Edwin Cannan observes,[3] Smith’s view of annual reproduction and as a consequence the distinction of productive and unproductive labor stems from his meeting, and the influence of, the French economists have known as the Physiocrats.
Within an enterprise, for example, there were many tasks that had to be performed, such as cleaning, record keeping, and bookkeeping, and repairs, which did not directly contribute to producing and increasing wealth in the sense of making a net addition to it – in other words, such tasks represented a net cost to the enterprise which had to be minimized.
Many different economic and moral arguments were made to either justify or else criticize the incomes gained from different activities, on the ground that they were "productive" or "unproductive", "earned" or "unearned", "wealth-creating" or "wealth-consuming".
In neoclassical economics, the distinction between productive and unproductive labour was however rejected as being largely arbitrary and irrelevant.
A persisting management preoccupation, particularly in large corporations, also concerns the question of which activities of a business are value adding.
In what has become popularly known as "value-based management", these problems are pragmatically tackled with the accounting concepts of market-value added (MVA) and economic value-added (EVA).
This style of management focuses very closely on how assets and activities contribute to maximum profit income.
Both in Das Kapital and in Theories of Surplus-Value, Marx devoted a considerable amount of attention to the concept of "productive and unproductive labour".
This didn't necessarily mean that unproductive functions are not socially useful or economically useful in some sense; they might well be, but they normally did not directly add net new value to the total social product, that was the point, they were a (necessary) financial cost to society, paid for by a transfer of value created by the productive sector.
It is argued neoclassical economics can understand the value of anything (and therefore the costs and benefits of an activity) only if it has a price, real or imputed.
The Marxian view is also dismissed by ecologists, because it argues only human labour-time is the substance and source of economic value in capitalist society[disputed – discuss].
In part, this misses Marx's own point, namely that it was not him, but the growth of commercial trade which made labour-exploitation the fulcrum of wealth creation.
Nevertheless, the ecological argument is that for the sake of a healthy future and a sustainable biosphere, a new valuation scheme for people and resources needs to be adopted.
The core of this critique is clearly an ethical one: all the existing economic theories provide no healthy norms that would ensure correct stewardship for the environment in which all people have to live.
Behind the MPS was a modernization theory according to which the criterion of progress consisted of the physical quantity of material goods being produced.
Dissident socialists objected to this approach, because they felt that in a socialist society, "productive" labour should really be defined by such things as: Since the end of communist rule in the USSR and Eastern Europe, however, the material product system has been abandoned, and new GDP-based accounts have been implemented following international standards recommended by the International Monetary Fund, the World Bank, and the United Nations System of National Accounts (UNSNA).
The advantage of this change is that economic activity is more comprehensively valued and visible in monetary terms; a possible disadvantage is that no national accounting is done anymore of physical product units (e.g., x tons of steel produced, or y number of tractors assembled).