Talk:Factors of production

Untitled

guhkj

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

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

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

Laissez Faire

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

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)

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)

In Classical economics "profit" is the return to proprietorship -- the return to the user of real capital --. If an entrepreneur/contractor rents a back hoe and produces a proper grading of land to accommodate a cement formed basement on the side of a hill then profit is the difference in labor costs between using and not using the back hoe minus the rent paid for the back hoe. Profits are earned and retained by firms (even a single person) whether or not they own the real capital (machinery (or even knowledge)) used to produce the final output. Land rent is not part of the discussion,

Further:

The rent paid for the back hoe is seen as true "rent" by the proprietor, but in classical economics and to the owner of the back hoe it is styled as "interest" which is the return to the owner of capital. The terms "rent" and "interest" are used to label the distribution of or return to ownership. If the ownership is of land or natural resource then the flow is called "rent". If the ownership is of capital then the flow is called "interest". Accounting profits lump all of this together and profess that profit is the simple difference between income and costs of the underlying factors. The accounting done in the phraseology in question (the factors in the production of wealth....) is actually reasonably correct whether you see entrepreneurship as a distinct factor or just a special case of labor. Human action is essential to the production of wealth and unless it is paid it will not contribute and there will be no production regardless of the existence of land and capital. This view is what makes capital the next factor in the pecking order in that all real capital (machinery and structures) is formed from labor and land. Last but not least is "land" which requires no human action to exist. Land simply exists regardless of any remuneration or human action.The Trucker (talk) 18:11, 15 November 2010 (UTC)

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)

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.

Austrian and Marxist theories should be removed from the introduction

Austrian and Marxist theories are only useful for understanding the history of economic thought. Neither school has much following among today's professional economists. Both are popular among non-economists, but the article introduction should reflect the current state of knowledge. The two big schools of thought among contemporary economists are the New Keynesian and New Classical schools. Today, Marxist and Austrian schools are irrelevant. --JHP (talk) 23:05, 20 February 2011 (UTC)

I agree with the above proposal. That material could be moved down (where it's not redundant). Arguably, singling them out as to their research programs is not needed in the Lead. This article might have many links in other WP:Econ-or-related articles on which Marxist and Austrian approaches have no bearing. P.S. On another matter, yes, sometimes trying to clarify (with alternative phrasings in parenthesis) may have unintended effects. Thanks. --Thomasmeeks (talk) 20:46, 21 February 2011 (UTC)