Bluffer’s guide to economics/ FACTORS


There are three types of inputs to a productive process: Land, Labour, and Capital. These are called the factors of production. Understanding the meaning and economic properties of these factors is essential to understanding political arguments. Most people do not understand them, some even refuse to understand them. As a result most people do not understand political arguments. One barrier to understanding is that the names of the factors have specialised meanings, and these meanings are quite different from common usage. Land is not just the surface of the planet, but includes anything which has a fixed supply. Anything which can not be made. Land is nature, but it is also legally granted exclusivity. Land is Intellectal Property, government licence and charter. Land is a priceless painting. Labour is all human effort, all work, including physical and intellectal work. Including factory workers and accountants, Including managers and artists. Capital, all inputs to production which can be produced, those, unlike Land, which do not have a fixed supply. Capital can be formed. Capital is tools and software. Capital is computers and shovels. Capital is tractors and factories. Capital is not money. However money intended to pay for buy or build Capital is called capital, financial capital. How these factors are employed, coupolled and distributed. And who has claim to what is in the end produced is the core subject of political economy.

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