useful form, or moving it geographically or in time (by warehousing, storage,
refrigeration, etc.). This productive process comprises both the provision of goods
and services: the lorry driver is therefore ‘a producer’ just as the farmer whose
tomatoes he is carrying to the market; the mason is as productive as the manufacturer
of the concrete mixer he is using; and the tax collector who collects taxes – for
redistribution to the underprivileged, or to finance public projects – is doing this job
because it has a productive role in society.
Service provision thus entails changing factor inputs into services delivered at the
time and place required. Thus the surgeon uses sophisticated products from secondary production and his own skills acquired over many years to bring relief to
patients. If we have to look in a more detailed way at production, it is best to start
by classifying it under different headings, such as (1) primary, secondary and tertiary
production and (2) direct production and indirect production.
2.4.2 Primary, Secondary and Tertiary Production
Table 2.2 gives a simple chart which illustrates the classification of production into
primary, secondary and tertiary stages.
2.4.3 Direct and Indirect Production
The second method of classifying production is to divide it into direct production
and indirect production, as shown by the examples in Table 2.3. It is important to
understand that in advanced economies, Man uses a system of indirect production to
provide the utilities he needs. E.g. the motor vehicle assembler ‘produces’ all he
needs – food, clothing, shelter, education, entertainment, etc. – by hanging doors in
an automobile factory, while the farmers, garment workers, builders, teachers and
television producers ‘assemble’ their cars indirectly by working in the fields, in
clothing factories, building sites, schools and television studios respectively. So,
what is direct and indirect production?
Direct production is production for one’s own use, like Robinson Crusoe on his
island. It has become the ecological fashion to adopt such a mode of life, but such a
primitive existence where one is more or less self sufficient (hunting, own food
crops, etc.) suffers from extreme vulnerability, as shown in Chaps. 11 and 17.
Indirect production is production for the market, rather than for our own use.
Any individual selects work that is agreeable/convenient to him, or within his
capabilities, and thus specialises in a particular trade or profession. As a result, he
achieves a much greater output than he can consume himself, and the vast majority
of it must be marketed, i.e., exchanged for other goods which he requires.
Physical infrastructure, such as water and sanitation, irrigation, transport, telecommunications and power – absorbs, in all countries, a significant proportion of
2.4 The Process of Production
45
refrigeration, etc.). This productive process comprises both the provision of goods
and services: the lorry driver is therefore ‘a producer’ just as the farmer whose
tomatoes he is carrying to the market; the mason is as productive as the manufacturer
of the concrete mixer he is using; and the tax collector who collects taxes – for
redistribution to the underprivileged, or to finance public projects – is doing this job
because it has a productive role in society.
Service provision thus entails changing factor inputs into services delivered at the
time and place required. Thus the surgeon uses sophisticated products from secondary production and his own skills acquired over many years to bring relief to
patients. If we have to look in a more detailed way at production, it is best to start
by classifying it under different headings, such as (1) primary, secondary and tertiary
production and (2) direct production and indirect production.
2.4.2 Primary, Secondary and Tertiary Production
Table 2.2 gives a simple chart which illustrates the classification of production into
primary, secondary and tertiary stages.
2.4.3 Direct and Indirect Production
The second method of classifying production is to divide it into direct production
and indirect production, as shown by the examples in Table 2.3. It is important to
understand that in advanced economies, Man uses a system of indirect production to
provide the utilities he needs. E.g. the motor vehicle assembler ‘produces’ all he
needs – food, clothing, shelter, education, entertainment, etc. – by hanging doors in
an automobile factory, while the farmers, garment workers, builders, teachers and
television producers ‘assemble’ their cars indirectly by working in the fields, in
clothing factories, building sites, schools and television studios respectively. So,
what is direct and indirect production?
Direct production is production for one’s own use, like Robinson Crusoe on his
island. It has become the ecological fashion to adopt such a mode of life, but such a
primitive existence where one is more or less self sufficient (hunting, own food
crops, etc.) suffers from extreme vulnerability, as shown in Chaps. 11 and 17.
Indirect production is production for the market, rather than for our own use.
Any individual selects work that is agreeable/convenient to him, or within his
capabilities, and thus specialises in a particular trade or profession. As a result, he
achieves a much greater output than he can consume himself, and the vast majority
of it must be marketed, i.e., exchanged for other goods which he requires.
Physical infrastructure, such as water and sanitation, irrigation, transport, telecommunications and power – absorbs, in all countries, a significant proportion of
2.4 The Process of Production
45