Goods and services

History

Physiocratic economists categorized production into productive labour and unproductive labour. Adam Smith expanded this thought by arguing that any economic activities directly related to material products (goods) were productive, and those activities which involved non-material production (services) were unproductive. This emphasis on material production was adapted by David Ricardo, Thomas Robert Malthus and John Stuart Mill, and influenced later Marxian economics. Other, mainly Italian, 18th-century economists maintained that all desired goods and services were productive.

Service-goods continuum

The division of consumables into services is a simplification: these are not discrete categories. Most business theorists see a continuum with pure service at one endpoint and pure tangible commodity goods at the other. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambience, the setting and clearing of the table, etc. Although some utilities, such as electricity and communications service providers, exclusively provide services, other utilities deliver physical goods, such as water utilities. For public sector contracting purposes, the electricity supply is defined among goods rather than services in the European Union, whereas under United States federal procurement regulations, it is treated as a service.

Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service, once delivered cannot. Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.

Marketing theory makes use of the service-goods continuum as an important concept which "enables marketers to see the relative goods/services composition of total products".

In international law

Distinctions are made between goods and services in the context of international trade liberalization. For example, the World Trade Organization's General Agreement on Tariffs and Trade (GATT) covers international trade in goods and the General Agreement on Trade in Services (GATS) covers the services sector.

References

References

1. Shubik, Martin. (23 June 2014). "Proceedings of the Conference Accounting and Economics: In Honour of the 500th Anniversary of the Publication of Luca Pacioli's Summa de Arithmetica, Geometria, Proportions et Propotionalita, Siena, 18-19 November 1992". Taylor & Francis.
2. UK Legislation. [http://www.legislation.gov.uk/uksi/2006/5/pdfs/uksi_20060005_en.pdf "The Public Contracts Regulations 2006"] {{Webarchive. link. (11 December 2014 . Regulation 2(1) ''s.v.'' "goods". Retrieved 25 June 2015)
3. [https://www.acquisition.gov/sites/default/files/current/far/html/Subpart%2041_2.html Federal Acquisition Regulation, Subpart 41.2 — Acquiring Utility Services] {{Webarchive. link. (29 January 2018 , accessed 12 May 2018)
4. (March 3, 2016). "Difference Between Goods and Services: Visual Guide". Inevitable Steps.
5. Indiaclass, [http://www.indiaclass.com/goods-service-continuum/ "Goods Service Continuum"]. Accessed 25 June 2015. {{webarchive. link. (25 April 2015)
6. Bachelors of Management Students Portal (BMS.co.in). [http://www.bms.co.in/explain-the-goods-service-continuum/ "Explain the Goods-Service Continuum"] {{Webarchive. link. (1 April 2015 , accessed 25 June 2015)
7. [[World Trade Organization. WTO]], [https://www.wto.org/english/tratop_e/gatt_e/gatt_e.htm GATT and the Goods Council] {{Webarchive. link. (18 November 2015 accessed 17 November 2015)
8. WTO, [https://www.wto.org/english/tratop_e/serv_e/serv_e.htm Services trade] {{Webarchive. link. (10 January 2016 , accessed 17 November 2015)