To give a correct definition of the factors of production, first you need to understand what constitutes the very definition of production, which characterizes the manufacturing process of all kinds of material goods. Therefore, to carry out such a sequence of actions, a person needs an impact on various objects of the surrounding world in order to give them the required parameters suitable for the implementation of the tasks. Thus, production factors are the most important elements that have a significant impact not only on performance, but also on the very possibility of organizing production activities.
Currently, there are several approaches to the definition of "factors of production development". Following the judgments of K. Marx, it is possible to allocate funds and the subject of labor, as well as labor. Nevertheless, the first two concepts can be combined into one group called the means of production.
Thus, production factors are a combination of material and personal factors. Such a combination is carried out in the form of organization and management of the enterprise on the basis of employee incentives through payment. Nevertheless, the effectiveness of such interaction is also characterized by various specific factors, for example, the technology used and the rational organization of the enterprise.
In turn, neoclassical theory defines economic factors as elements of interaction, such as capital, land and labor. Let's consider each of them in more detail.
Capital is a combination of artifacts. Moreover, this definition implies that all of them must be involved in the production process. The concept of "capital" can include monetary assets, buildings and structures, as well as various vehicles. The manufacturing process and the accumulation of these funds is characterized by investment. Such factors of production are a combination of several concepts: monetary, material and the theory of "human capital".
Earth is a natural resource that has not been made by man. This category includes minerals, forests, soil, etc. The use of land can be varied, but the bulk of the represented resource is most often used in the agricultural sector. Similar factors of production are means with certain properties. For example, natural, with which the resources are initially available, and artificially created, which have arisen due to human activity (reclamation, irrigation, fertilization, etc.).
Labor can be represented by physical and intellectual manifestations of human efforts. This factor of production has its own characteristics, the main of which is that labor is an integral part of human life, which means it has both a political and a social aspect.
