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Factors of Production

Responsibilities towards the factors

Think about our responsibilities towards land, labour, capital and the other factors.

The chapter ends by turning each factor into a responsibility.

Start with land. Production uses natural resources (land, water, minerals), and these are limited and can be damaged.

Its example is honest about the trade-off. In Tamil Nadu, many people earn their living in leather factories, which helps the local economy; but waste from those factories can pollute rivers and soil. Both things are true at once.

The same goes for old smartphones. If they are not recycled properly, harmful substances like lead and mercury leak into the ground and water, dangerous for people, animals and plants.

The principle it draws is the definition of sustainability: meeting our needs today "without making it harder for future generations to meet theirs". That means reducing waste, avoiding pollution, recycling industrial wastewater, and using recycled inputs.

Then labour. Businesses owe their workers:

  • fair pay and safe working conditions;
  • training and education so their skills stay up to date;
  • workplace rights: fair treatment, no discrimination, and benefits like healthcare or paid leave.

Beyond that comes Corporate Social Responsibility (CSR): businesses tackling social and environmental problems to benefit society and nature, such as reducing pollution, caring for local communities, and treating employees and customers with respect.

And here India was first in the world. A 2014 law required companies to spend 2 per cent of their average profits of the last three years on CSR activities.

India was the first country in the world to make corporate social responsibility a legal duty, in 2014.

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