1.13 Products Consumed at the Moment of Production
The author uses the term "immaterial product" for what is currently regarded as a service: a musician, an actor, and a doctor all provide value to the customer that arises from their actions. This value is not stored in a material object, so it cannot be transferred or stored for future use.
Smith considers work of this nature to be "unproductive labor," because of the lack of a physical artifact, but JBS feels this to be a mistake: products are valued not because of their physical manifestation, but because of the benefit they deliver. (EN: And even further, the physical product is in most instances a temporary manifestation, which is often destroyed by consumption. A person who buys a bottle of wine can store it or trade it without consuming it, but if he uses it, it no longer exists. Even durable objects are worn down by use over time.)
Smith himself considered that the value of a physical artifact is greater than that of its raw materials by virtue of the labor performed upon it to fashion it for consumption. In this sense, value is an abstract that is not limited to physical material but from the experience of its consumer. If a man takes as much pleasure from listening to a musician as he would from eating a pastry, the benefit he derives is the consequence of the labor applied to each action, and not the physical materials that may (or may not) be required to deliver the benefit.
The nature of immaterial products makes it impossible to accumulate them. They might be considered to increase the wealth of a nation, as the citizens of a nation well-supplied with musicians, doctors, clergymen, an the like will find their needs and desires well-attended and enjoy the benefits of their services, but they cannot be considered to increase the capital resources of a nation.
There is some validity to the argument against immaterial products, in that overconsumption is wasteful. An individual who constantly hires persons to provide amusement is consuming rather than exchanging value. Likewise, a company overstocked with lawyers will find that there is a great deal more activity in its courts over trifling matters, which is highly wasteful activity. IT is neither wholly good or wholly ill, but a matter of degree to asses the point at which resources are misspent on "too much" of a good thing.
Capital investment is also necessary to provide an immaterial product. The value of services is in the talent of the performer, and study and practice to gain proficiency consume capital. The tuition paid to a college to train a doctor to practice medicine is similar to the sum paid by a farmer to purchase land to practice agriculture.
Pause to consider this is also true of professions that deal with material products. The value of a chair is derived more from the skill of a carpenter than the price of wood, and to become proficient, the carpenter must invest capital during a long period of apprenticeship on his way to mastery.
The degree to which investment must be made in training, for both material and immaterial products, depends on the profession in question. It requires very little training to become a prostitute or a porter, and as such these professions command very little compensation. As the result, the lowest classes of society consist of people whose professions require little knowledge or skill. The notion of wages will be considered in more detail later.
(EN: It may be splitting hairs, but it's also a matter of supply and demand. There are more people who can be a porter than can be a doctor. But Say may ultimately be correct because the cost of training is what prevents more people from becoming doctors and swelling the ranks of capable medical practitioners.)
The next few paragraphs seem a bit oblique: they refer to individuals who engage in activities for the mere pleasure of doing them. A person who dances or plays a musical instrument may do so for their own pleasure rather than to be paid for their performance. From a perspective of economics, this is little different from a person who plants a vegetable garden for their own consumption: the activity produces value for the actor, and may substitute for trading with others to obtain the same value, but it is not itself a product in the economic sense.
In the same sense, any item purchased for use that is durable has value to its owner, but is not part of the economy. The young couple purchases cooking pots and table service intend to gain years of use from it and, if it is of quality, may even hand it down to their children. Such implements represent a value to their owners, but are likewise not considered part of the economy, but they are a part of the national wealth. When one considers a society to be wealthy, it is because the people have such things in their possession.
In terms of durable items, their cost and benefit should be considered in light of their durability: a man who pays 20,000 dollars for a house and expects it to serve as his dwelling for 50 years is in effect paying 400 dollars per year for the use of it. The same is true of a city that builds a bridge that is expected to stand for 20 years. The same is true of a manufacturer who pays 500 for a mill-stone that will be in service for five years.
There's a rather long passage about trees being planted for ornamental purposes that bear fruit, or which in time are harvested for their timber. I don't follow Say's point at all, unless perhaps it is to indicate there are some objects that have a dual purpose of providing pleasure to their owners as well as producing value.
While on the topic of trees, he also mentions timber that is cultivated, but which may take decades to grow to a size that can be harvested. This involves a significant outlay of capital that will not provide a return for many years, but is nonetheless an investment in a productive activity.