Economic text books such as those by Sammuelson & Stiglitz examine the variation of productive output with increases in labour using the example of wheat production. They purport to show a declining production of additional wheat with increasing labour. It is not based on real life data but is a created hypothetical example used to illustrate the proposition. In his 1964 (sixth edition) textbook, Sammuelson has 100 acres of land producing 2000 units of corn with 1 unit of labour, 3000 units of corn with 2 units of labour, 3500 units of corn with 3 units of labour. Checking with an actual wheat farmer, this is considered nonsensical. With a fixed area of land, the planting of wheat would cover the available productive area and this alone would determine the amount of wheat grown. Increasing any labour input would not enable any more wheat to be produced. The area planted also determines the time the harvester will require to harvest the crop. Sammuelson actually uses the square root of the area as a suggested production function!

After planting, the only factors that can vary the size of the crop are the climate and the effect of fertilisation. The yield is subject to Liebig's "Law of the Minimum". Justus Von Liebig is considered the father of the fertiliser industry. His law takes different forms: "The total yield or biomass of any organism will be determined by the nutrient present in the lowest (minimum) concentration in relation to the requirements of that organism." or "The most deficient factor limits growth and increasing the supply of non-limiting factors will not increase plant growth" or "Yield is proportional to the most limiting nutrient. Increasing the limiting nutrient will increase growth to the point where some other nutrient becomes limiting". (The factors of production for plant growth: air, water, temperature, light, living room, nutrients potassium, phosphorous, nitrogen etc.) In this example, labour is not a limiting nutrient. No increase in labour will increase output when it has reached the amount sufficient to man the harvester and reap the planted area. In this real example, it is the amount of land in cultivation that limits production.

This law can be applied to further areas of production if we recast the law into economic jargon. "The production of a product will be determined by the factor of production in the lowest available supply in relation to the requirements of production" or "The most deficient factor of production limits the production and increasing the availability of non-limiting factors of production will not increase production." or "Production is proportional to the most limiting factor of production. Increasing the limiting factor of production will increase production to the point where some other factor of production becomes limiting." (The factors of production: Commercial land, productive land, buildings, plant, equipment, energy, material resources, skilled & professional labour, unskilled labour, & working capital).

For some real life examples we can consider first a boatbuilder with a full order book who could consider increasing the production rate and shorten the delivery time. In this case the limiting factor of production was construction space. He needed suitable commercial building space in which to build his plastic gin palaces. In this actual example, he was encouraged by his bank to take on an overdraft and contract warehouse space for expanded production. Unfortunately there was a disequilibrium in the stock market and share values plunged dramatically (the "1987 share crash"). The bank called in the loan and the contract for space could not be undone with the result that the boatbuilder was bankrupted.

In another example, the fur from possum skins is being successfully turned into fibre and a variety of high value fabric items are being produced. In this example labour is not a limiting factor, it is the supply of the raw material. Again there is no marginal benefit to be obtained from increased labour as the text books hypothesise.

Again, a plastics injection moulding company, working three shifts would like to expand production. Labour is not a limiting factor in production. Plant is the limiting factor. A new moulding machine would enable production to be increased. An extra person each shift might be required to man the equipment but this is not necessarily so, as the machines run automatically and a worker can more or less manage more than one machine. In many industrial cases, production increases require additional plant together with an operator or two to run the plant. We could say there is a complementary limiting factor expressed under Liebig's law in this case with both plant and labour being limiting factors in combination.

The limiting factor can be labour. Skilled/professional labour has been found to be a limiting factor in the radiological treatment of cancers. Production could not be increased with any sort of labour. Specific labour already trained and qualified was needed. A shortfall in output was not allowable so the demand had to be transferred to Australia with the travel of patients overseas for treatment. In Nelson, there has been a shortage of labour in the apple orchards. The required skills could be obtained on the job. The limiting factor was not packing house space, nor equipment in the form of tractors for crop transport nor fuel for the tractors. In these cases there is no expectation that the extra staff would not achieve the same output as existing workers.

Since this version of Liebig's Law applies to a domain where people are involved, we cannot expect it to apply with the rigour of a law of physics. It fails in the area of computer programming. Experienced computer people have their own law; "adding more programmers to a late project will make it latter still." Unknown to most computer people is that the cause of this is "Koch's Law of anti-synergism" which considers the rapid increase in connections between increasing numbers of individuals in a group activity. In computer system development work, this component ends up in computer work consuming more time in workers and their management interactively communicating computer interfaces and work distribution than actual productive programming work. The ever increasing number of computer development over-runs such as the failed INCIS system for the NZ Police which was a $80 million wasted investment reflects this increasing negative productivity derived from increasing labour.

The examples of declining marginal output of labour as described in the textbooks are not representative of actuality. Textbooks should reflect the actuality and applicability of an economic version of Liebig's Law.