The Missing Factor of Production: Power

  1. Labor—the labor that went into producing a product or service, as well as the labor that went into developing the recipe for the product or service. Often measured as the salaries paid.
  2. Land—the land on which the product or service was produced. Often quantified as rent.
  3. Capital—any tool or machine used to produce the product or service. Capital is usually synonymous with interest paid on loans for the money to purchase these tools and machines. Since interest can be defined simply as renting money.
  1. An uninsured migrant farm worker who picks the tomatoes that go into a commercial pizza sauce.
  2. One of the major shareholders in the agro-business that makes the tomato sauce and owns the subsidiary that hires the migrant farm worker,
  3. A teenager who works part time at an independent pizza parlor and puts the tomato sauce on the pizza.
  4. The owner of that pizza parlor that uses the tomato sauce.
  1. Farm Worker—Critically High—they are basically risking their entire life every day they work because they could be injured. Their work is hard and they will only be able to do it until perhaps their 40’s at which point they will become a burden on their family until they start to receive social security in their 60's.
  2. Shareholder—Very Low—if the entire agro-business failed, they would still be millionaires with multiple homes.
  3. Part Time Pizza Maker—Low—if they lost their job, it would mean some economic hardship for them while they found another job.
  4. Pizza Parlor Owner—High—most small business owners are highly dependent on their business for their jobs and to pay for their mortgages. Losing the parlor would mean some serious economic hardships.
  1. Farm Worker—$20k/year
  2. Shareholder—100x the Farm Worker
  3. Part Time Pizza Maker—$20k/year
  4. Pizza Parlor Owner—10x Farm Worker
  1. Farm Worker—Virtually Powerless
  2. Shareholder—Enormously Powerful
  3. Part Time Pizza Maker—Very Minor Power
  4. Pizza Parlor Owner—Some Parochial Power

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Braus

Braus

Educator, Founder, Engineer. Interested in Evidence Based Education and Solving BIG Problems.