Surely labor is as muddled a concept as capital.…
To me, at least, the old fashioned triad of inputs into the basic economic production equation – land, labor, and capital – are all so imprecise as to leave any output from those equations subject to enormous doubt.
What, exactly, do we mean by them?
What capital? What labor? and what land [land includes natural resources]?
It is no wonder, then, that even the most heroic attempts at understanding the great curve towards modern prosperity that began a couple of hundred years ago fall farcically short. They don’t take into account to drivers of such prosperity, they depend upon archaic notions and such imprecise measures that they cannot hope to succeed.…
I understand the desire to compress human endeavor into simple formulae in the attempt to trace the arc of progress, but I think we all would benefit from a clearer understanding of what needs to be compressed. For economics to fit more neatly within the same world as the more basic sciences it needs to look through the lens of energy conversion, at work, and at the flow of information that results from both. Using land, labor, and capital makes that next to impossible. Some combination of energy, raw material, and knowledge would be a step in the right direction.
But economics is too path dependent to make such a shift. So we are stuck with pointless controversies, and inputs so vague that they obscure rather than illuminate the basic economic process called growth.Peter Radford takes the business school approach to economics. Like what are the numbers actually, and what do they mean for meeting objectives according to plan.
The Radford Free Press
Why No Labor Controversy?Peter Radford
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