Talk:Factors of production

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[edit] 2002

I tried to deal evenly with the two different tracks of extension of the classic analysis, by capitalist parties and socialist parties. I am deliberately not getting into the debate between modern libertarian parties and green parties which is covered in political economy.

I bridged to "means of production" which is the Marxist term, and "means of protection" which is used in some libertarian analyses. —Preceding unsigned comment added by 24.150.61.63 (talk) 10:54, March 26, 2002


Good changes, they improve readability a lot. The micro-economic factors are under a bit of challenge, but probably not mature enough to note here...

The distinction between non-human capital vs. human capital is assumed to be rigid in macro-economics as far as I know... macro is seemingly only about this distinction now... "balanced production" is its goal... but this ignores the various micro-distinctions now made...

The "four to six types of capital" could be challenged, but I doubt it... at most there are seven in the current art, an issue dealt with in intellectual capital. Also, the only analysis I've seen that claims only four is Natural Capitalism... which lumps all human capital into one lump without differentiating even social capital which has its own clear literature - and which doesn't admit that instruction/imitation is not the same as enterprise/leadership/creativity... there really seem to be *six*, period, in the modern analysis, with some mavericks claiming four (Hawken), five (Acquisti), seven (Lev). I don't know if we can do more than list those three guys... —Preceding unsigned comment added by 24.150.61.63 (talk) 13:33, March 26, 2002

Modern economic theory doesn't really distinguish between these things anyway. It's a fairly arbitrary division, and rough around the edges. I certainly wouldn't want to be caught claiming there "are" exactly N factors, for some integer N. Land can be improved, and presumably the improvements would be capital, and not a natural resource, right? But exactly what counts as an improvement? If an earthquake clears away the building between my hotel and the beach, is the additional money I can now collect rent or interest? (Or maybe a transfer payment from my neighbor?) If I own a house in a drained swamp or lake which would flood if whoever operates the pumps turns them off, does that mean that part of the rent I charge the tenant is really interest on the pump? Does this depend on whether the local tax arrangements actually make me pay it to the pump owner? These questions can be answered with some sophistry, but these days, economists tend to only bother doing so if it would actually make a difference to the predictions made by their theories. In macroeconomics, sometimes it does, because population growth influences both how much money can be made and how many mouths it must feed.Sjeng 23:36, 13 February 2007 (UTC)


It's a little clearer now. It could use a diagram. I saw one somewhere on the web but it seems to be gone now... —Preceding unsigned comment added by 24.150.61.63 (talk) 17:03, April 5, 2002

[edit] 2005

I am going to add a hopefully NPOV blurb on the end about Henry George and his theories that briefly gained significant currency in the progressive era of politics. Feel free to massage it if it offends. —Preceding unsigned comment added by 165.247.226.6 (talk) 03:44, January 1, 2005

[edit] need help please

what is a smart way to use factors of production? —Preceding unsigned comment added by 68.109.190.137 (talk) 20:17, March 27, 2006

[edit] Differences

"Prior to the Information Age the land, labour, and capital were used to create substantial wealth due to their scarcity. Following the Information Age (circa 1971-1991), and the Knowledge Age (circa 1991 to 2002) and the current Intangible Economy (circa 2002+)"

What is the difference between information, knowledge, and intangibles? What happened in 1971, 1991, and 2002 that marked the beginning of a whole new AGE? It seems like this was pulled out of a second-rate management book. Madcoverboy 17:54, August 31, 2006

[edit] Laissez Faire

Inserted a link to laissez faire free trade theory John D. Croft 09:57, 14 October 2006 (UTC)

[edit] Factor Payments

I'm not completely certain, which is why I'm putting it here rather than in the article, but aren't profits also considered a factor payment for capital? Interest is the payment to non-owners who contribute capital and profit is the payment to owners. Pop Secret 11:38, 13 December 2006 (UTC)

Profits are the factor payment for business capital, and stay internal to the business. They don't become personal factor incomes until paid out to owners, either in the form of dividends for corporations or drawings/distributions for sole-proprietorships/partnerships. These latter are factor payments for financial capital. That part of profits that isn't paid out is retained profits, and the owners get this in the form of capital gains, which are not factor incomes. I have updated the article to reflect all this.

Don't get too upset if that is confusing, as the professional academic economists themselves have been arguing about this distinction about capital for centuries now. I expect a sysop will either revert my edit or slap an NPOV warning tag on it :)

JJMcVey 11:26, 14 September 2007 (UTC)

[edit] What on earth is this?

The factors in the production of wealth, income, or services which can be sold for money. The factors are: (1) labor, (2)entrepreneurship, (3) capital, and (4) land (or natural resources).
Of the gross income from any enterprise, labor has the first claim. After labor are the costs of coordination, and the costs of capital, not including land. Then last, and least in order of preference, is the claim of land to the residual portion of the income.

I have no idea where this comes from, or in what way it could possibly be true, even "in real estate." Is this a normative communalist view of some variety I'm unfamiliar with? And why do the "wealth, income, or services" need to be sold for money? If I barter them, does the rule not apply? As far as I know, each factor tends to command its marginal product unless something weird is going on. I'm not going to delete it just yet, in case I'm missing something, but if this turns out to be an oddball normative opinion, please attribute it to somebody and summarize their arguments for it. (If it turns out that the person I just called an oddball is somebody famous, like Karl Marx, I still mean it ;-) ). Sjeng 23:26, 13 February 2007 (UTC)

[edit] This page being used for Google spam?

I went to Google and typed in define:resource, and it came up with a link for this page ("Factors of Production", not the talk page), but with a definition that was an ad for a warez site. Looking at the page I can't see where it is, and looking at the page's history doesn't clear things up either. Not sure if this is isolated or not either, but I wanted to let someone know.Mbourgon 15:12, 2 April 2007 (UTC)

There was until recent Edits a clog of management-related references, since deleted. That may have been the problem. If something looks way of of whack on an article, there's usuaally a good reason for that, even without spamming motivation, e.g., an idea that s/he thinks explains everything. I did not find what you did, but I can see how it might have happened. Also, Google might have had a temporary glitch. --Thomasmeeks 18:23, 2 April 2007 (UTC)

[edit] Differentiating profit better

I've clarified the kind of profit that is pursued "as a fourth factor". It is economic profit that entrepreneurs seek to gain, where the normal profit is treated in economics theory as a type of cost (it's a precursor to dividends, which is one of the three traditional factors).

JJMcVey 11:43, 14 September 2007 (UTC)

Ash3faq (talk) 04:01, 5 May 2008 (UTC)The basic idea of posting is to provide basic, classical and fundamental information to new readers. This will helpful to new reader to have fundamental concepts of Factors of Production.