Deconstructing an Economics Text

by Lindy Davies

I came to the study of political economy along the route that we here at the Henry George Institute urge you, too, to travel: by reading the work of a classical economic thinker, Henry George, first -- and then going back and relating the clear logic of what you've learned to what you thought you knew -- and what pundits seem to think they know. This is not, of course, the way "economics" is taught in schools and universities today -- and more's the pity. It helps, it really does, to start with basic observable relationships and trace clear logical connections. For example, consider the old economic concept of the "Factors of Production". How can we meaningfully group, or classify, those things that contribute to the creation of the things we want? George, with his classical mind, observed the obvious and named three basic factors: 1) human beings (labor); 2) the things they make (wealth); 3) the natural world out of which those things are made (land). These categories are neat; they're intuitive. It's really not possible for a sensible observer to confuse one with another. As a basic structure to help us to figure out the intricacies of economic life, they are very serviceable as a starting point, are they not?

But along comes modern-day economics, teaching students that there are not three, but four basic factors: Labor, Capital, Land and Entrepreneurship. "What Malarkey!" I thought, when I first encountered the scheme in a conventional econ textbook, some years ago, and was moved to devise the following annotation:

Deconstructing an Economics Text

(Please bear with me; it's a fairly big download.)

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