CONTINUED FROM LAST WEEK
It is clear from what we have said, therefore, that man’s problem in the satisfaction of his wants resolves itself into the issue of choice: choice from an infinity of ends in order to achieve an equilibrium between these ends, having regard to the limited means at his disposal. And this problem arises simply because man wants this infinity of ends, in spite of his awareness of the fact that the means at his disposal are limited and have alternative uses.
There is only one way of solving the problem. The means at man’s disposal must be organised for the production of the things that he requires for the satisfaction of his wants, which brings us to a consideration of the problems of production.
Production is the provision of those things which are required for the satisfaction of wants at such time and place, and in such form as would satisfy those wants. In other words, the problem of production is the provision of goods in such form and at such time and place as would satisfy man’s wants.
If all goods – food, clothing, shelter, etc.- were over-abundant and available at all times and in the requisite form, like air, there would be no problem of production.
No man or family can produce all the foodstuffs that it requires for feeding all year round in its garden or farm; much less produce, in the same areas of farmland, the raw materials for making pieces of cloth or building a fairly decent and tenantable house, and by itself turn them all into finished goods.
Apart from ripe fruits, there are very few foodstuffs which can be eaten as Nature provides them. If a man grows cassava or yam and wants to eat gari or yam flour, he must put cassava or yarn through processes which require skill and time to bring about the desired transformation. But neither cassava nor yam can be produced all year round. Nature herself imposes this limitation.
Then there are specific parts of the earth where alone certain things can grow, or certain animals can be reared; there are places where certain items of goods can be produced more efficiently than in other parts. If you live in Britain and you want to consume cassava or yam, it must be brought from distant countries.
The whole of this business is complicated by the fact that what is produced must not only be such as to satisfy the wants of man, generally speaking, but must be desired by the multitude of individual consumers with their ever-changing tastes, fashions, whims, and caprices. We must hasten to qualify this proposition. It can be stated in general that man’s tastes in regard to necessaries, as we have defined and illustrated them, hardly change. For instance, for purposes of individual tastes and fashionable consumption, different persons at different times put cassava or yam through a large variety of forms and preparations. But the desire for cassava and yam persists in all Nigerians through changing times. It is clear, therefore, that even while the taste for cassava and yam per se remains constant, the tastes for the various forms and preparations to which cassava and yam can be converted change with individuals and times. And changes such as these only tend to complicate production problems.
Furthermore, the satisfaction of man’s wants, with a view to making him happy and able to live a full life, depends on the quantity, quality, and composition or range or variety of the goods produced. And as we have noted before, through changing times the comforts and luxuries of today become the necessaries and comforts of tomorrow.
The resources which are at the disposal of man for producing the things he wants can be grouped under four heads as follow:
The four are known as the agents or factors of production. But before we go further, we should endeavour to define and describe the characteristics of each of them.
(i) ‘By Land is meant the materials and the forces which nature gives freely for man’s aid in land and water, in air and light and heat’ (Marshall). In short, by land is meant all the natural, other than manpower, resources which are available, without man’s agency, on, in, and above the earth.
(ii) By labour is meant all the available manpower resources.
Marshall’s definition of labour as ‘the economic work of man’ is not apt. It deals with the result of labour ‘whether with the hand or the head’, rather than with labour per se. For, if Marshail’s definition were correct, then it would be grossly erroneous to speak of idle or unemployed labour.
(iii) By capital is meant that portion of the product of the active union of land and labour which is set aside for the purpose of aiding further output from a similar active union. Economists are content with defining capital as ‘wealth that is used to produce further wealth’. But wealth, it must be emphasized, is the offspring of the fruitful marriage of land with labour.
(iv) By entrepreneurship is meant that kind of labour which specialises in the organisational and managerial aspects of production.
Many econornists do not regard the entrepreneur as a separate agent of production. Time was when the entrepreneur was the proprietor of his own business and hence of his capital. But, in most cases, this is no longer so. Most entrepreneurs are now employees of owners of capital who themselves know nothing at all about the organisation and management of the enterprises from which they derive s-ubstantial interest rates and profits. Nonetheless, we will, throughout this discourse, treat the entrepreneur as an agent of production in the manner in which we have defined him.
The problems of production are solved by the entrepreneur, in skilfully and efficiently mobilising and co-ordinating the other three factors to ensure that the right quantity, quality, and variety of goods are available to the consumers when and where required and in the form desired. In other words, the entrepreneur must blend land, labour, and capital with one another in such a proportion as will produce the maximum possible results.
CONTINUES NEXT WEEK
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
Nigeria’s new COVID-19 infections increased again last week, Tribune Online analysis shows.
Last week, the 46th week of the pandemic in Nigeria, the country recorded 1,206 new infections (November 8 – 14), an increase when compared to the 923 cases recorded the previous week…
After two years of marriage and waiting on the Lord, the Ooni of Ife and his Queen, Naomi Silekunola, on Wednesday, announced the arrival of a baby boy into the royal house of Oduduwa.
Kamala Harris made history on Saturday with her election as Joe Biden’s vice president, becoming the first woman, first Black American and first Asian American to win the second-highest US office.