We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Frank Knight's Proposal to End Distinctions among Factors of Production and His Objection to the Single Tax.
- Authors
Plassmann, Florenz; Tideman, T. Nicolaus
- Abstract
The article examined Frank H. Knight's proposal to end distinctions among factors of production and his objection to the single tax. Classical economists divided factors of production into three groups: labor, capital and land. Human beings were classified as labor, and the return to human effort was called wages. Everything that was produced with human effort was classified as capital, and the return to the use of capital was interest. Everything that was neither a human being nor produced with human effort was called land, and the return to land use was called rent. This system of classification implies that the supplies of labor and capital are somewhat elastic, while the supply of land is perfectly inelastic. Knight disagreed with the claim that land is not produced. He argued that although it might be possible to divide hypothetical productive factors according to their conditions of supply, such an exercise would be irrelevant for the factors that actually exist. Knight said that land production consists of activities that fall into three distinct categories. Activities in the first category are related to the discovery and exploration of land. The second category consists of activities that ensure exclusive access to the new resource and the third category contains activities related to the transformation of undeveloped land into economically useful land. At the center of Knight's proposal to end distinctions among factors of production is his concept of production. If the activities involved in the production of land, labor and capital are the same, then it is understandable that someone might argue that there is no economic basis for distinctions among them. Knight recommended separating general economic theory from the economic analysis of realistic particular circumstances.
- Subjects
KNIGHT, Frank H. (Frank Hyneman), 1885-1972; SINGLE tax; LAND use; ECONOMICS; TAXATION; PRODUCTION (Economic theory)
- Publication
History of Political Economy, 2004, Vol 36, Issue 3, p505
- ISSN
0018-2702
- Publication type
Article
- DOI
10.1215/00182702-36-3-505