Alfred Marshall: labour and organisation: Two factors of production

Abstract

The classical theory of production concentrated on a combination of three factors — land, capital and labour. Then Alfred Marshall introduced a fourth factors, organisation and entrepreneurship. The vital concept of Marshall’s economics is organic growth. He developed the theory of organic growth of society in his economics. In the theory of organic growth. Labour and Organisation; the labouring class and the entrepreneur play an important role. Then Marshall wanted to increase ' the standard of life' in the labouring class and raise the ability of the entrepreneur. Marshall was very interested in the labouring class and it is starting point of his economics. It can be said that Marshall's economics is labour economics. He wanted the labouring class to escape the poverty trap and advance into the gentleman class. This thesis was clarified that Marshall pointed out some methods of increase "the standard of life”. In this thesis, the definition of an entrepreneur which had been neglected in economic theory was clarified. The great economist in the past did not always have an economic theory, which included the concept of the entrepreneur. Again in modern economic theory, the concept of the entrepreneur was neglected, since the theories which centered around equilibrium did not pay attention to the entrepreneur. However, Marshall's economic theory has a theory of the entrepreneur and he discussed some functions of the entrepreneur. Marshall wanted the entrepreneur to raise the entrepreneurial ability. Marshall wanted to make up the circle leading to an increased standard of life in the labouring class and the entrepreneurship, leading to high productivity and thus perpetuating organic growth. In this thesis it was clarified that Marshall regarded the entrepreneur and the labouring class as a vital factor of production which causes organic growth.