Productive activities and time
andrea.parisi | Published: 5 Dec 2025, 1:05 p.m.
The Oxford, Cambridge and Collins dictionaries agree that economics is the science studying how money, trade and industry are organized in a society. This definition explicitly references money, which from my point of view, makes it a weak definition: as discussed earlier, money is never properly defined in economic theory. Additionally, owing to the above definition, economics would not be able (strictly speaking) to describe a society based on barter. The Encyclopedia Britannica defines economics as a science that studies the production, distribution and consumption of wealth. The Merriam-Webster dictionary uses a similar definition where, however, the object of the study is not wealth, but goods and services.
Of the above three definitions, I find the Merriam Webster's the most appropriate. It does not reference money nor wealth: they are both not scientifically well defined as discussed in previous posts. Economics indeed deals with production of goods and distribution: how goods are produced, exchanged among individuals, and "consumed". From this point of view, in my posts to date I have been discussing approaches that fit well with this definition. Goods are produced, exchanged and consumed: this is made possible through the actions of individuals who engage in activities, producing goods, exchanging goods, and consuming goods. I discussed how these exchanged are carried on, what is actually exchanged behind the lines, and how productivity influences our ability to produce them.
Productivity is often linked to the ensemble of productive activities: but what are productive activities? I must warn that in what follows I will take what might be considered, at first sight, a strongly esoteric approach. However, I hope to show that this approach is not esoteric at all, and is actually what we embrace every day in our lives without really thinking about it.
The distinction between productive and unproductive activities was raised by Adams Smith and reprised once again by Karl Marx. In neoclassic and modern economics, this distinction is considered irrelevant: any activity, as long as it produces goods, is productive. However, when economic theory needs to quantify productivity, it inevitably needs to measure the worth of the good in monetary terms: what is the value of the goods produced? Goods have value and enter economic calculations once they are traded. For instance, GDP accounts for all transactions. However, if I produce tomatoes and eat them, these are not included in the GDP. This might seem a minor point: after all, most goods are traded and thus reflect the underlying economic outlook. On the other hand, this approach is somehow lacking coherence and, once again, fails science. If you look at other domains in science, self-interaction is never ignored unless there is a mathematical reason to do so. For instance, an object is made of atoms, but at the scale of the solid object we do not really care about how atoms interact. Yet, if science had not investigated the interaction of atoms (the individual constituents of a solid), we would not have been able to understand conductivity. And if science had not investigated self-interactions, we would not have been able to understand and develop a plethora of useful things like colloids, lasers, atomic clocks. Yet, in economic theory this path is never followed. As discussed in earlier posts, understanding the economics of individuals (an approach which is not taken into account in current economic theory) requires going beyond certain assumption and approximation silently introduced into the economic framework by economists.
Let us consider the point of view of an individual: using the famous example of Robinson Crusoe, the individual uses his time to produce capital goods (a spear, a fishing net) that increase his productivity and thus his economic worthiness. He works, but the exchange of time is with himself. We cannot understand his increase in productivity if we do not include this transaction in the description. For all we know, he may very well have bought the spear from someone else, thus exchanging time with someone else's time. To us this makes no difference: thus it is clear that, despite being a self-transaction, we should take it into account. As described above, this is a common approach in other sciences like Physics. It is in economic theory that self-interaction is discarded, but once again there is no mathematical reason, and no scientific reason to do that: it is only a precise choice made by economists to only follow a certain set of interactions. Mostly, this choice comes from the fact that economists like to follow interactions where money is being exchanged, but we are back to base: as money is ill defined in economic theory, this choice is also ill defined.
An individual does many things in his/her life: he/she eats, sleeps, relaxes on the river banks. These are not productive activities in the modern and traditional economic sense. However, they are valuable activities for the individual. In fact, anything we do has use: even sleeping. Correct sleeping makes sure, among other things, that our performance is optimal the next day, and that our cognitive abilities are not impaired. From an economic point of view, sleeping resembles a daily investment which grants an optimal production the next day.1 Relaxing on the river banks allows us to savour the sweetness of life, making us positively tuned towards our daily activities. And even if we drop any attempt to justify what is positive about relaxing on ther river banks, the simple fact that we can do it and we appreciate it, means that it is productive to us: we are willing to use time for it (thus, produce it) and consume it. The whole point here is to move away from a concept of "productive" = "tradable good with market" to "productive" = "something we use our time for, which can be consumed", like the time spent relaxing on the river banks.
Indeed, each moment of our life is productive to some extent. When we are ill, we use our time to get healthy again: this is still a job for us, requiring energies, and sometimes external help. When we spend time with our kids, we are not only receiving a benefit, but we are also contributing to their well-being and, thus, their future.
All of this might indeed seem esoteric: this is not exactly how things are handled in economics. Playing with your kids and spending time with your family does not produce any tradable good: does this have anything to do with economics? It turns out that it actually has a lot to do with it, and many professionals intuitively follow this approach. Once we consider all activities in our personal economy, we may discover that our time is valuable, and that we need to choose at each moment within different activities, each giving us some return.
Troy Hunt is a renown professional and major name in the world of cyber security: he has nothing to do with economic theories. Yet, in one of his must read posts he shows an enlightening attitude towards the use of his time, and seems to have very clear ideas about its value. Just to mention one sentence from his post:
Every activity draws down on my time and every one has its own reward. Some are monetary and immediate (running a workshop), others have longer term financial upside (Pluralsight courses), some build profile (blogging and speaking) and others reward in ways that are very hard to measure, such as playing with the kids. But each costs time and each pays something back, the trick is recognising this and prioritising appropriately.
This is not just wisdom: it is an economic statement. Each person has to use his time for different activities: when he/she chooses which activities to do, he is making a choice with respect to the only scarce commodity he truly owns and consumes, which is time. And yet, this basic understanding does not appear in economic textbooks. The equivalence between time and money is exemplified by the famous phrase "time is money". In its usual interpretation, the sentence means that time spent on trading activities can lead to monetary gain, whilst staying idle implies renounce to such gains, and does not imply any equivalence. Yet, as I have been discussing in other earlier posts, time is actually our underlying currency – what we exchange when we trade. And once we start using this approach, most of the distinctions discussed here (like, productive vs unproductive activities, self-trade vs trade, etc) appearing in economic theory start to fall down.
There is also a beauty that any scientist would recognize immediately: time is measurable – and easily so! For instance the total productive time for the United Kingdom, considering its population of 67,800,000 individuals in 2023, is about 593.93 Gh (giga-hours). This amount of time is of course used in different actions, each with its own productivity resulting in the total production for the country. If we were to know the time-worthiness of each individual for his different activities, we could calculate the total production. Happily, we have surveys and studies that can help with that, but this will have to be handled separately in some other post.
- One could also look at this like a sort of tax we need to pay to ensure correct functioning of our body. For some reason we are comfortable in understanding a tax on property that needs to be payed for a house we own, but uncomfortable with a daily tax ensuring our health.
