ABSTRACT
Full employment of other resources, usually implied by saying that the production possibilities frontier gives the maximum output possible by using all the economy's resources, does not have the importance or even the meaning that full employment of labor has. The capacity of capital equipment is itself a rather loose concept. Ordinarily capital capacity, as usually measured, is built ahead of normal operating rates partly to facilitate steady output growth instead of growth being held at a fixed limit until a large lump of capacity can be added, which again would be underutilized for a time. In short, capacity grows by lumps instead of by small steady increments. And if existent capacity is pushed to its short-run limit, that may run into higher costs, and might involve overfull employment of labor to make it possible. The proper objective for an economy is not to do whatever is necessary with people to get maximum possible output from all capital equipment in existence at any given time. The equipment is there to facilitate full and productive employment oflabor in a growing economy. As for full utilization of other resources, little sense can be made of the concept of full utilization. So-called natural resources are themselves "produced"; there is no fixed supply of them to be either fully utilized or left unused, with the implication that the former is involved in maximizing the output of the economy.
