ble for economic growth. It would appear then that K, the ratio of productive to unproductive labor, and P, the productivity rate are equally important factors in this determinance. However, Smith says that this is not so. The ratio of productive to unproductive labor does not change much over time, says Smith. The productivity rate is therefore almost entirely accountable for changes in a nations economic well being. The division of labor is the central factor in Smiths theory of economic growth and it is this development which leads to an increase in productivity and spurs the entire growth cicle. With this being the case and with K being more or less a constant, one wonders why Smith chose to include the ratio of productive to unproductive labor in this equation if not why he chose to make a distinction in productive and unproductive labor at all. The distinction between productive and unproductive labor is not a distinction that Adam Smith was the first to make. Smith was an admirer of the Physiocratic school of thought. He said of Physiocracy that, "with all its imperfections," it was, "the nearest approximation to the truth that has yet been published upon the subject of political economy." There were many representatives of the Physiocratic school of thought but the most modern of them all was surely Anne Robert Jaques Turgot. In chapter 8 of his great work, Reflections, Turgot too makes a distinction between laborers when he writes, "Here then we have the whole society dividedinto two classes, both which are occupied in work. But one of these, through its labour, produces or rather extracts from the land wealth which is continually renascent[T]he other, engaged in preparing the produced materials, sells its labor to the first and recieves its subsistence in exchange." In other words one class of workers actually produces something and another class provides services for those products as well as for the producers themselv...
