The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Agents of Production

  • F. Y. Edgeworth
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_421

Abstract

The causes or requisites of production, often called ‘agents of production’, may be divided into two classes: human action and external nature; commonly distinguished as ‘labour’, and ‘natural agents’. The first category comprises mental as well as muscular exertion; the second, force as well as matter. To the second factor is sometimes applied the term land: in a technical sense, denoting not only the ‘brute earth’, but also all other physical elements with their properties. But this term is more frequently employed in another classification, according to which the agents of production are divided into three classes – land, labour, and capital. Of the two classifications which have been stated the former appears the more fundamental and philosophical. That ‘all production is the result of two and only two elementary agents of production, nature and labour,’ is particularly well argued by Böhm-Bawerk in his Kapital und Kapitalzins, pt. ii. p. 83. ‘There is no room for a third elementary source,’ he maintains. This view is countenanced by high authorities, of whom some are cited below. Even J.S. Mill, who is disposed to make capital nearly as important as the other members of the tripartite division, yet admits that ‘labour and natural agents’ are ‘the primary and universal requisites of production’ (Political Economy, bk. i, ch. iv, §; 1). Prof. Marshall, dividing the subject more closely, thinks ‘it is perhaps best to say that there are three factors of production, land, labour, and the sacrifice involved in waiting’ (Principles of Economics, p. 614, note).

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • F. Y. Edgeworth
    • 1
  1. 1.