What is a "factor of production"?

Factors of production include labor, capital and land, but for a long time, we only emphasized the role of labor in value creation and wealth production, while the role of other factors of production and their distribution of national income were either ignored or not paid enough attention to, so we only emphasized the issue of labor participating in income distribution. The distribution according to the factors of production we are discussing today means that while continuing to highlight the role of labor, we should pay enough attention to the factors of production such as capital, technology and management, so that they can also get reasonable and legal remuneration. Among them, it is particularly important to emphasize the role and regression of the two elements.

The first is human capital. Capital includes material capital and human capital. The practice of economic development in various countries shows that human capital plays an increasingly important role, the contribution of education to the growth rate of national income has risen sharply, and people's quality, knowledge and talents have become more and more decisive for economic development. Therefore, how to make human capital get enough returns is very important for the sustainable development of economy and the distribution of national income.

The second is land and resource property. Their role in wealth production has long been recognized by people, but there has always been a vague understanding of the necessity of their participation in income distribution, which is manifested in the fact that land and natural resources in China are used for free or at low prices in many cases. In China, land and natural resources are owned by the state or the collective, and their free or low-cost use means that their income is occupied by a few people. This is also an important reason for the sharp expansion of the income gap in China. Therefore, how to participate in the distribution of land and resource elements is a problem that should be seriously considered when improving the income distribution system.