Labour, in Political Economy, may be defined as effort for the satisfying of human needs. It is one of the three leading factors in production, the other two being land (or natural objects) and capital; and it is more fundamental than capital, which originally is the result of labour. In the vast circle of industry labour has a great variety of functions, which may be thus classified: (1) Producing of raw materials, as in mining and agriculture; (2) manufacturing in the widest sense of the word, or transformation of raw materials into objects serviceable to man; (3) distribution, or transference of useful objects from one place to another, as determined by human needs; (4) personal services rendered by physicians, teachers, &c.
A distinction insisted on by many economists is that into productive and unproductive labour. The former consists of those kinds of exertion which produce utilities embodied in natural objects. Unproductive labour, like that of the musician, while both useful and honourable, does not add to the material wealth of the community. Though it has the appearance of undervaluing some of the highest services that can be rendered to the community, the distinction has a general validity. Labour directly employed in rendering natural objects serviceable to man may in the language of political economy be distinctively called productive. But in order to obviate a too narrow and abstract view of the subject it is hardly necessary to point out that the labour of the physician or teacher may be indirectly most productive, inasmuch as it increases the efficiency of the workman by promoting his health and intelligence. And apart from the special services rendered by great teachers and artists, and which cannot be measured in material wealth, they raise the general level of production, and even of material civilisation, by inspiring men with finer tastes and higher needs. For the wants to which productive labour ministers vary at different stages of social development, and grow more refined as the human race advances.
The social and legal forms in which labour has appeared have also varied with the progress of civilisation. In the early stages the labour of the chase, fishing, &c. was performed by the men, while the drudgery devolved on the women and slaves. But at that stage few slaves existed. It was not till the agricultural stage was reached that conquering tribes spared the conquered in order to utilise their services as workers. Ancient civilisation was based almost entirely on compulsory labour. The pyramids and other great works of Egypt and Babylonia were possible only because governments could command forced labour on a colossal scale. The more highly developed societies of Greece and Rome rested on the same basis.
It is a disputed question how far free labour existed in the early Teutonic settlements of England and other countries. The question is evidently one of degree, for the Germans possessed slaves long before the great emigrations began, and even in England they did not entirely exterminate the natives. The medieval organisation of society, where definitely constituted, rested on serfdom—i.e. the mass of the workers were attached to the soil, and rendered fixed services in labour, in kind, and latterly in money. While the condition of serfdom greatly varied, there can be no doubt that its tendency was to depress the free and raise the servile cultivators to something like a common level. The free workers of the towns organised themselves in Guilds (q.v.). In the course of the 14th century serfdom began to pass away in England. Its disappearance was followed by enact- ments for the regulation of labour in the interest of the ruling classes. The first, and one of the greatest, examples of this was the Statute of Labourers occasioned by the scarcity of labour consequent on the Black Death. The main object of this statute, which was passed in 1349 and was repealed only in the early years of Elizabeth, was to fix the amount of wages; and it was superseded by a statute of Elizabeth which, besides ordaining an apprenticeship of seven years, empowered the justices in quarter sessions to fix the rate of wages both in husbandry and handicrafts. This act of Elizabeth was not repealed till 1814. The poor law enacted at the close of her reign in 1601 may be described as a method of supplementing the low wages fixed by the justices (see POOR LAW).
Towards the close of the 18th century the effect of the industrial revolution was to organise labour in large factories and similar undertakings; and in the early decades of the 19th the growing ideas of freedom had begun to make other great changes in the condition of the workers. The right of combination received in 1824 was utilised in the formation of trades-unions and co-operative societies, and the admission of the working-men to the franchise has given them a share in the political life of the country. Changes similar to those in England have taken place, only much later, in the countries of the European continent. The emancipation of agricultural labour from serfdom, which was effected in France at the Revolution of 1789, was not completed in central Europe till 1848, and in Russia not till 1861. Laws for the regulation of labour are now intended not to fix wages as formerly, but to protect the weaker class of workers. Such are the Factory Acts in England, which also have been followed by a corresponding development abroad. Efforts for the international organisation of labour proceeding from socialism have been followed by the international conference for the regulation of labour, which met at Berlin in 1890.
Another great result of social evolution in the most advanced countries of the world has been the more or less conscious and definite constituting of the labouring class as a separate class, with interests at variance with those of the possessors of land and capital. The solution of the questions connected therewith is now universally regarded as the most pressing duty of statesmen and economists (see SOCIALISM). In this connection it is maintained on the basis of the old political economy that labour, thus narrowly defined as the attribute of a special class, is the source and measure of value. For treatment of this fallacy, see VALUE. See also DIVISION OF LABOUR.
See Professor Thorold Rogers' Six Centuries of Work and Wages; also popular edition, Work and Wages; and the chapters on labour in the various systematic works on political economy.