The form of social economy is a certain way, a type of organization of economic activity of people, the real functioning of the social economy. The general forms of economic organization of production include natural and commodity production.
Subsistence farming is a type of farm in which production is aimed directly at satisfying the producer’s own needs. Natural production is characterized by the following features, expressing the essence of its inherent economic relations.
Subsistence farming is a closed system of organizational and economic relations. The society in which it dominates consists of a mass of economic units (families, communities, estates). Each unit relies on its own production resources and provides itself with everything necessary for life. It performs all types of economic work, starting from the extraction of various types of raw materials and ending with the final preparation of them for consumption. Natural production is characterized by manual universal labor, which excludes its division into types: each person performs all the basic work. It uses the simplest technique (hoe, shovels, rakes, etc.) and artisanal tools. Naturally, under such conditions, labor activity is unproductive, output cannot increase significantly. Subsistence farming is characterized by direct economic links between production and consumption. It develops according to the abbreviated formula “production – distribution – consumption”. That is, the created products are distributed among all participants in production and, bypassing its exchange, go into personal and production consumption. Such a direct link ensures the sustainability of subsistence farming.
Subsistence farming is historically the first type of economic activity of people. It arose in ancient times, during the formation of the primitive communal system, when the production activity of man began and the first branches of the economy appeared – agriculture, cattle breeding. Subsistence farming existed among primitive peoples who did not know exchange and private property. It was a system of closed, economically independent communities. Subsistence farming prevailed. also in the ancient slave-owning states, although there was already a fairly developed commodity production. It was one of the main features of the feudal economy. The natural form here had a landlord economy and a surplus product appropriated by the feudal lord. The latter acted in the form of a variety of duties in kind and payments. The subsistence character was the economy of the feudally dependent peasant. The peasant family was engaged in farming, cattle breeding and processing their products into finished commodities.
Certain elements of the subsistence economy also take place in modern developed countries, where commodity-money relations prevail. Subsistence farming prevails in many developing countries. More than half of the population is employed in the subsistence and semi-subsistence economy of underdeveloped countries. According to experts, for a long time, subsistence farming will occupy a significant place in the economy of these countries. Many peoples of Africa, Indian tribes living in the interior regions of Latin America, in South-East Asia, retain a wide variety of specific forms of subsistence farming (hunting, fishing, cultivation, nomadic cattle breeding).
In the Republic of Belarus, subsistence farming is preserved in the personal subsidiary agriculture of peasants and in the garden plots of urban residents.
The main disadvantage of subsistence farming is that it cannot ensure the growth of labor productivity, and therefore supports only minimal living conditions. Therefore, starting with subsistence farming – the very first form of organization of economic life, mankind did not stop at it and moved to commodity production.
Commodity production and its main features. This is an organization of the social economy, in which products are produced by separate, separate producers, where each of them specializes in the production of one product. Therefore, in order to meet social needs, it is necessary to buy and sell products that become goods on the market.
The following main features are inherent in the commodity economy.
This economy is an open system of organizational and economic relations. Here, workers create useful products not for their own consumption, but for selling them to other people. The whole flow of new things goes beyond each production unit and rushes to the market to meet the demand of buyers. The production of goods is based on the division of labor. Its development depends on how much the specialization (isolation) of employees and enterprises deepens in the production of certain types of products or parts of complex products. Such a phenomenon is objectively caused by technological progress, and the latter, in turn, receives a great impetus in the division of labor. The inextricable link between commodity production and the division of labor, and therefore with the progress of technology, is one of its undoubted advantages over subsistence farming. The commodity economy is characterized by indirect, indirect links between production and consumption. They develop according to the formula “production – distribution – exchange – consumption”. Manufactured products first enter the market for exchange for other products (or for money) and only then enter the sphere of consumption. The market confirms or does not confirm the need to manufacture these products for sale.
So, the commodity economy is a system of organizational and economic relations, thanks to which the equilateral progress of the economy is ensured. With the deepening of the division of labor, the use of increasingly sophisticated technology is expanding. This causes an unprecedented increase in production output. And thanks to the increase in labor productivity, output per capita increases. In addition, an increasing variety of products intended for exchange on the market for other products is being created.
The commodity economy includes such common organizational ties that can serve a wide variety of socio-economic systems. However, the volume and importance of the production of goods and their exchange are not at all the same. Because of this, the commodity economy has a historical character: it has changed significantly throughout history.
First of all, it is important to identify the genesis (origin) of commodity production. One of the reasons for its emergence is the social division of labor. The beginning here was laid by a large social division of labor: the first (isolation in agriculture of agriculture and animal husbandry) and the second (the separation of crafts from agriculture). In the future, the economic law of the division of labor is gaining more and more force. In accordance with this law, the economy progresses as a result of an increasing qualitative differentiation (dismemberment) of labor activity, which leads to the isolation and coexistence of its various types. As a result, several forms of division of labor arise: international (between countries), general (between large branches of the national economy, economy – agriculture, industry, etc.), private (division within large industries into sub-branches, types of production) and singular (within enterprises – into their different divisions).
The division of labor helps to increase its productivity and creates material prerequisites for the emergence of exchange. This is due to the fact that farms specializing in the production of any product cannot fully use it and at the same time satisfy all their needs with it, and therefore it is necessary to exchange goods between producers.
The second reason for the emergence of commodity production is the economic isolation of producers. It implies ownership of the produced product, the presence of a strongly expressed economic interest of the economic entity, its freedom to choose the type of economic activity, certain obligations to society, the state and partners. Understanding the economic isolation of commodity producers is important for assessing the current economic processes taking place in the Republic of Belarus, an integral part of which is the strengthening of the economic independence of enterprises.
The economic isolation of producers is a state that allows them to relatively freely dispose of the products produced, alienate and own them. Consequently, economic separation cannot be separated from ownership of the means of production and the products produced. But the forms of ownership are diverse. Therefore, economic isolation is also different in its socio-economic nature. There is no economic isolation at all, just as there is no property in general, but there is a historically defined form of ownership, which determines the specifically historical nature of economic isolation.
Having arisen during the period of disintegration of the primitive communal system, commodity production served the slave system, feudalism acquired a universal character under capitalism. In a slave-owning society, the share of marketable products in the total volume of social production ranged from 5 to 10 percent. Under feudalism, especially with the transition to the monetary form of rent, commodity production increased its share to 30 percent. In the system of relations of classical capitalism, the production of goods in the total volume of output approaches 100%. Commodity production prevails in modern developed countries and is making its way in developing countries. With the transition to market relations, commodity production acquires a wide scope in the CIS countries.
The disintegration of natural production, the emergence and strengthening of commodity production marks a serious advance in economic progress. Due to the fact that capitalism has mastered the commodity-market mechanism, it is here that the productive forces in their development have advanced much further than in all previous history.
Commodity production has a high adaptability to different economic systems. In each of them, it serves the implementation of those forms of ownership that are characteristic of them.
History knows two types of commodity production: simple and large capitalist. Simple commodity production is the production of small commodity producers based on their private property and their own labor. We are talking about peasants and artisans who produce products for exchange.
The emergence of large-scale, universal commodity production is associated with the establishment of the capitalist economic system. Therefore, it is called capitalist commodity production. Here, goods become not only the products of labor, but also the factors of production, including labor power. Market relations become universal.
Simple and capitalist commodity production have common features and differences. Their common features are private ownership of the means of production, the spontaneous nature of development, the existence of competition, and the orientation of production to the market. The differences between them are manifested in the following:
in simple commodity production, the means of production belong to the producers themselves, and in capitalist commodity production, to the entrepreneurs; simple commodity production is based on personal labor, and capitalist production is based on wage labor; in simple commodity production, the product belongs to the producer, and in capitalist production, to the entrepreneur; in simple commodity production, labor power is not a commodity, and in capitalist production it is a commodity; in the first stage commodity production was not a universal form of production, and in capitalist commodity production it is universal; in simple commodity production, the main goal is to satisfy the needs of the producer, and in capitalist production, the main goal is to make a profit; simple commodity production is based on backward technology, and capitalist production is based on developed machine technology.
The similarities and differences between simple and capitalist commodity production predetermine the nature of the small producer: on the one hand, he acts as a worker, and on the other hand, as an owner. This observation is important for determining the patterns of development of small-scale commodity production, which prevails in developing countries.
In modern conditions, a certain type, a model of commodity production can be considered entrepreneurship – initiative, independent economic activity of citizens and their associations. In the literature, other models of commodity production are also distinguished: the commodity economy of free competition, the commodity economy of the organized market, the planning-directive and planning-normative model. In the first case, there is no monopoly, there is private free competition. The second model is characterized by the presence of various forms of economic monopoly and state regulation. The third model is a regulated economy based on policy planning. Finally, the fourth model is regulation based on planning standards.
Product and its properties
Under the conditions of commodity production, the product of labor acquires new specific properties that turn it into a commodity.
A commodity is a product of labor (a thing or a service) created by man not for his own exchange, but to meet the needs of society and its members, and entering into consumption through purchase and sale. |
From the definition of the product it follows that it has two properties. First, the commodity is able to satisfy any human need (regardless of whether it is caused by the need of the stomach or the mind). Second, a commodity has the ability to be exchanged for other goods.
The ability of a commodity to satisfy a human need is called the use value of a good. At the same time, human needs mean not only personal needs (for example, food, clothing, etc.), but also the needs for the means of production. Use values form the material content of wealth in every society. Without their constant production, the existence of mankind is inconceivable.
It is hardly necessary to prove that if a product does not have utility (use value), then no one needs it. However, can we assume, on the contrary, that in a capitalist commodity economy, any useful thing is a commodity?
We will get the answer if we consider the problem: in what cases is a useful thing a product? To do this, we will consistently analyze the signs of the difference between a product and a non-market good.
First, it is obvious that a commodity cannot be a gift product of nature (spring water, wild fruits, etc.). It is a useful thing, the creation of which took human labor.
Secondly, goods are not products prepared for their own needs (as in subsistence farming). They will be things created for other people – social utilities.
Thirdly, among the goods we will not include a thing that goes to the consumer for free (for example, a gift). A good sold on the market implies an equivalent compensation.
Hence, a commodity is a social utility created by labor, intended for an equivalent exchange in the market for another product.
Thus, in order to become a commodity, the product must not only be the result of labor, but also be produced to meet the needs not of the producer himself, but of other members of society, i.e. it must be a social use value. However, not every use value produced for others is a commodity. For example, a serf peasant produced bread and gave it as a burden to the landowner. He thereby produced use value not for himself, but for others, i.e. produced social use value. But it was not a commodity, because it was transferred to others free of charge (for free).
In order for the product of labor to become a commodity, it must change hands not free of charge, but in exchange for some other use values, i.e. it must have not only a social use value, but also an exchange value. Exchange value is the ability of a commodity to be exchanged for other goods in certain quantitative proportions. The ratios or proportions in which each commodity is exchanged for other goods are quite different. For example, a pair of shoes is exchanged for a hundredweight of corn or for three quintals of potatoes. In all these quantitative ratios, the exchange value of a pair of shoes is expressed. What is the basis of these ratios? Perhaps the usefulness of the thing?
Although the difference in use values is a necessary condition for the exchange of goods, it cannot serve as a basis for their quantitative measurement. In other words, use values, being qualitatively heterogeneous, cannot be equated with each other. Consequently, in different goods there is something in common, which makes them comparable, i.e. makes it possible to measure them. The common thing that is contained in all goods and makes them quantitatively commensurate is the human labor embodied in them.
All goods are products of labor. By equating goods with each other, commodity producers thereby effectively equate the labor contained in these goods. Labor embodied in a commodity forms the value of the commodity. It is the basis of the proportions in which goods are exchanged among themselves. That is why a pair of shoes in the exchange is equated to one hundredweight of grain: approximately the same amount of labor is spent on the production of both.
The value of goods is a historical category inherent only in commodity production. Value is not inherent in things as such. It does not contain a single gram of the substance. Value is social labor embodied in a commodity and manifested only through exchange. Value expresses the social-production relations between people who are externally covered by a material shell.
The value of a good is closely related to the exchange value, but these are not identical categories. Value is an intrinsic property of a commodity, while exchange value is only an external manifestation of value. At the same time, the producer’s labor embodied in a commodity can manifest itself only indirectly – through the exchange of this product for other goods.
A commodity is the unity of use value and value. Their unity lies in the fact that a commodity cannot be a thing that does not have value. In the same way, a thing that is not a use value cannot be a commodity. There is an internal contradiction between use value and value, since these two properties of a commodity represent a unity of opposites. As use values, different goods are qualitatively heterogeneous and quantitatively incommensurable. As values, goods are homogeneous and quantitatively commensurate, for they represent the embodiment of social labor. Use value is a material property of a commodity, and value is its social property. These two properties of a commodity are determined by the different nature of the labor spent on its production.
Labor embodied in a commodity has a dual character. It is both concrete and abstract work. The work of any manufacturer has its qualitative certainty. For example, the work of a blacksmith is qualitatively different from the labor of a potter, carpenter, etc. Different types of labor differ from each other in their purpose, tools, techniques, results. Each use value embodies a qualitatively defined type of labor. Labor expended in a certain form and qualitatively different from all other types of labor is concrete labor. This labor will create the use value of the commodity.
What is common between the various types of concrete labor, which creates different use values, is that all its types represent simultaneously the expenditure of labor power, i.e. the expenditure of human energy: the brain, muscles, nerves, etc. The labor of producers, acting as labor costs in general, regardless of its specific form, is abstract labor. This labor creates the value of the commodity.
Abstract labor is a specific economic category of commodity production. If there is no commodity production, then there is no value, and where there is no value, there is no abstract labor. However, abstract work is not an abstract concept. Abstract labor is not just the expenditure of human energy in the physiological sense. These costs become abstract labor only under certain conditions, namely, when people began to equate some types of labor with others by equating goods. Only in the process of exchange it turns out that commodity producers work for each other. The labor of each of them acts here as a part of the aggregate social labor. Therefore, the abstract labor underlying the value of a commodity actually expresses the economic relations between commodity producers.
In commodity production based on private property, there is a contradiction between private and public, and between concrete and abstract labor. The fact is that in the commodity economy, specific labor has specific features, being a private matter of the commodity producer, i.e. private labor. Such labor is not coordinated on a societal scale with the labor of other producers and is carried out spontaneously.
In the social division of labor with its specialization, the labor of an individual commodity producer cannot be only a private matter. In fact, manufacturers work for each other. However, the social nature of the labor of commodity producers in the process of production of goods remains hidden. This nature of labor is manifested only in the market, in the process of exchange. Only here it is revealed whether society needs the labor of a particular producer. Hence the conclusion: the specific labor of the commodity producer has a private character, it acts directly in the form of private labor. The carrier of social labor is abstract labor, which underlies the market value of a commodity. The contradiction between private and public labor is the basic contradiction of simple commodity production. It creates the possibility of disproportions between the production of various goods (some are many, while others are few).
Since the value of a commodity is abstract labor embodied in it, the value of the goods is determined by the amount of labor or labor time required to produce that good. However, such a determination of the value of the value of the goods is too general and insufficient, since each commodity producer works differently. The working time that is spent on the production of goods by an individual commodity producer is called individual working time. However, the value of the goods cannot be determined by this time. It is determined not by individual, but by socially necessary labor costs or socially necessary working time.
Socially necessary working time is the time that is required for the production of goods in the presence of socially normal conditions of production and with an average level of skill and intensity of labor. Socially normal conditions are understood as such conditions under which the bulk of goods of this type are produced.
Socially necessary working time is not a constant value. It changes under the influence of changes in labor productivity. Labor productivity is its efficiency, the fruitfulness of a particular living labor, which is measured by the amount of output created per unit of working time or the time required to produce a unit of output.
The quantity of goods produced per unit of time is also influenced by the intensity or intensity of labor. It is measured by labor costs per unit of working time. With an increase in both labor productivity and its intensity, the number of consumable values produced increases. However, in the first case, the cost of a unit of production decreases with a constant value of the value of the entire mass of output produced. In the second case, the value of the total mass of production increases with the value of the unit of production unchanged.
Different types of specific work differ from each other and the degree of its complexity. The work of an employee that does not require special training is called simple labor. Work that requires prior training of the employee is called complex work. The reduction of complex labor to simple labor occurs spontaneously in the process of exchange, where less complex labor is exchanged for a larger amount of simple labor. In other words, complex work is like multiplied simple labor. When determining the value of the value of a commodity, the socially necessary amount of simple labor is taken as a basis.
Previously, the work of a person who does not have any special training was considered as a simple labor. Now such a completely unskilled labor force can be used only in auxiliary work. All major forms of work require some degree of skill. Therefore, we have the right to single out as simple labor the labor of the least qualified basic workers who take part in the production of each type of product.