Why do societies tend to label certain activities as "unproductive"? Or perhaps said another way, what's so special about "productive" endeavour? These questions matter in part, because they closely relate to sectors of the economy specific to equilibrium balance.
Activities considered most productive, are those which encourage further momentum and additional monetary gains. Whereas activities labeled "unproductive", regularly require other existing wealth sources for social continuity on economic terms. While some aren't convinced regarding this causation, ultimately it matters for the ability of mature economies to maintain productive economic complexity. When too many things go wrong, even the strongest economies can start to become fragile. And how can anyone really know where such tipping points exist? I believe it can't be stressed enough, how right Adam Smith was centuries earlier, to worry about the fragile nature of economic momentum. Otherwise, he might not have felt the need to describe "unproductive" activities in ways which can still offend readers of Wealth of Nations today.
Nations have always experienced political struggles regarding fiscal activity, so whatever is viewed as productive or unproductive, depends on cultural framing as well. Still: When it comes to wealth creation, "low productivity" maintenance services are necessary to preserve what people, businesses and nations build in the first place. Importantly, Adam Smith believed in the value of "unproductive" labour. For that matter he noted its worthiness in what was also a description of economic momentum:
A man grows rich by employing a multitude of manufacturers: he grows poor, by maintaining a multitude of menial servants. The labour of the latter, however, has its value, and deserves its reward as well as the former. But the labour of the manufacturer fixes and realizes itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past. It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion. That subject, or what is the same thing, the price of that subject, can afterwards, if necessary, put in motion a quantity of labour equal to that which had originally produced it. The labour of the menial servant, on the contrary, does not fix or realize itself in any particular subject or vendible commodity. His services generally perish in the very instant of their performance, and seldom leaves any trace or value behind them, for which an equal quantity of service could afterwards be procured.
Productivity is a macroeconomic concern, because excess resource aggregation in areas which are not direct wealth creation, can eventually pull down areas which most contribute to economic momentum. Despite the fact societies aren't directly aware of such tipping points, much depends on how populations feel in this regard. When economic momentum slows, citizens begin to feel the difficulty of getting ahead and making the most of their lives. Plus, when free markets are held back for too long, people begin to assume it is also okay to take away the freedoms of their neighbors.
Adam Smith lived when expanding economic momentum and free markets contributed to the hopeful expectations of citizens in his time. He observed that when people felt better about their own life options, they were more willing to give consideration and respect to other citizens.
In other words, economic dynamism made people more civilized. Whether or not our own economic times have become more fragile, we already see how people have lost some of this consideration for one another. Perhaps we could give more credit where credit is due, for the earlier freedoms we've lost in full market representation. In particular, where some forms of work are deemed "unproductive", we can assign more economic value to our own time use potential, so that ultimately, less money is necessary for those activities to take place. If we work to regain free markets for all income levels, citizens might hope again for continued progress, prosperity, and personal freedoms.
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