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Understanding our Political Economy. LESSON THREE Essential Elements of Political Economy. LAND. LABOR. CAPITAL. LAND. LABOR. CAPITAL GOODS. LAND. Cost of Production = ZERO. Forms of Labor PRIMARY to Production. Resource extraction Agriculture Timber harvesting Fishing Hunting.
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Understanding our Political Economy LESSON THREE Essential Elements of Political Economy
LAND LABOR CAPITAL
LAND LABOR CAPITAL GOODS LAND
Forms of Labor PRIMARYto Production • Resource extraction • Agriculture • Timber harvesting • Fishing • Hunting
Forms of Labor SECONDARYto Production • Milling • Refining • Combining • Processing
Forms of Labor TERTIARYto Production • Manufacturing • Assembly • Transportation
Services Services Services
Architects and Engineers • Accountants and Lawyers • Bankers and Financial Advisers • Insurers
“Labor always produces either wealth (which may or may not be capital) or services. Only in an exceptional case of misadventure is nothing produced.” Progress and Poverty, p.33.
Be the product of labor with or without the assistance of other (capital) goods • Have exchange value in the marketplace; and • Satisfy some human desire
Capital goods Environmental capital Financial capital Human capital Industrial capital Intellectual capital Natural capital
“The factors of production may be said to be land, labor and capital. …Other writers class land with capital, but we have already found reason to consider land separately from goods produced by mankind.” Harry Gunnison Brown, Economic Science and the Common Welfare, 1925
“… theorists after [John Bates] Clark have made land just another kind of machine. The economic world was thenceforth divided into just two elements, labor and capital.” Mason Gaffney, University of California (Riverside), 1994
“When bright people say stupid things, the question inevitably arises, why is their perception of reality so blurred? Good economists are bright men and women. …”
“All the same, economists do make the oddest statements and promulgate undue quantities of faulty prophecy and policy prescription.” Robert Lekachman, Economists At Bay, 1976, pp. 1,2
LAND SPECULATORS WANTED