Terminology

Economists use many specialised terms and jargon. Unfortunately, difference branches and schools of economics, accounting, tax law and politics use particular terms very loosely, often using several different definitions for the same term, even in one article.

For the development of this agent-based simulation software, the terminology of science and of classical economics is used.

• Land is everything in nature, except people and the things which people have produced.
• Labour is the activity of people when directed purposefully in the creation or acquisition of wealth.
• Capital comprises things which have been produced by people which are intended to be used in the creation or acquisition of wealth.
• Wealth comprises things which directly meet a human need or desire.
• Money is the thing most commonly used in voluntary exchange. Modern money is established through contracts and/or through taxation, and does not comprise a form of capital. Where money is in forms of wealth being produced and consumed, such as grain, ingots, tobacco or Tide(tm), it can technically be a form of capital.

Finding precise definitions is difficult, but without sharing common terminology, confusion is certain.

Contracts are treated separately, and are not a "factor of production". In particular, contracts are not considered a form of capital in this terminology. This is distinct from accounting terminology, Marxian terminology and neoclassical economics, where capital includes contracts.

Understanding the economy with a consistent terminology is important when it comes to presenting the analysis and results, and when responding to others who may be unaware of inconsistencies and differences in the meaning of particular terms.