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The Complex Taxonomy of the Factors

Natural Resources, Human Action, and Capital Goods

Authors

  • Fred E. Foldvary

    1. Santa Clara University
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      The author is a lecturer in economics at Santa Clara University. His book include The Soul of Liberty, Public Goods and Private Communities, and Beyond, Neoclassical Economics. Foldvary’s research areas include real estate economics, social ethics and public finance.


Abstract

Abstract Contemporary neoclassical economics has reduced factor analysis to two homogenous inputs, K and L. This excessive simplification has led to a deficient understanding of economic reality and a misunderstanding of concepts such as the producer surplus. This paper presents a taxonomy of the factors, including the complexity of natural resources. A better understanding of the role that factors play will enhance an understanding of economic reality and policy.

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