The history of the evolution of society indicates that at various stages of development of production relations and productive forces, the social economy repeatedly took on different economic forms, the first and initial of which was natural economy (subsistence production).
According to historical data, in different times there was a significant variety of its models: Asian, Slavic, primitive, Germanic community and others. Despite the commonality of the main features, a single model had individual characteristics, determined by the specific habitat.
Natural production and its main features
They look like this:
- Subsistence farming is represented by a closed system, that is, it has an inherent autarkic character. A single economic unit carries out the entire list of work and thereby provides itself with all the benefits necessary for life.
- Subsistence production is not associated with the division of labor, which is therefore unproductive. It leads to minimum quantity surplus product.
- This economic form of social economy is not characterized by exchange.
- It is historically based on land ownership. This form of management appeared as a consequence of stagnation in the social division of labor and the primitive nature of its material conditions.
- Subsistence production is a form of economy that is based on the creation of material goods and services exclusively for consumption within a single economic unit. Thus, there is no development of any external relationships.
- Production relations here are expressed by the relationship between people, and not through the products of their labor, for example, a slave owner and his slave. Subsistence production strictly confines the economic processes existing at that time within local units, thereby preventing the opening of channels for establishing external relations.
So, natural production (its main features, more precisely) had, so to speak, a primitive color, both in terms of the development of production relationships within a separate economic unit, and in terms of the most basic connections between communities.
The labor force was strictly assigned to the corresponding economic community and was deprived of mobility. This justifies the conservatism of subsistence farming. Mostly specific features natural forms of farming reveal the reason for the vitality and sustainability of agricultural communities for many millennia.
The natural form corresponds to both a certain level of productive forces and certain production relations, which predetermine a very narrow goal of all production: satisfying needs that are insignificant both in quantitative and nomenclatural aspects, and of a primitive nature.
Subsistence farming and commodity production
Prerequisites for the emergence and further development following form of management were the following facts:
- The commodity form initially emerged as the exact opposite of subsistence farming.
- It represents ordered social production, in which economic relations are manifested through the market (through the purchase and sale of products labor activity).
So, natural and commodity production acted as a kind of counterweight to each other. The transition to the latter became evidence of the emergence and further evolution economic thinking and subsequent commercially civilized relations in the economic sphere.
Two conditions for the development of commodity production
- The presence of a social division of labor, according to which each producer is engaged in manufacturing certain type goods. Specialization was the main condition ensuring an increase in labor productivity, and subsequently technological revolutions. This was precisely the prerequisite for the production of additional volumes of products necessary to meet all the needs of the community.
- Economic isolation of production, that is, producers began to be considered owners. In view of this, the need arose to exchange the results of labor.
So, the first condition is a prerequisite for the emergence of commodity production itself, and the second – commodity producers.
Different understanding of the usefulness of a product from the point of view of producers and consumers
The production of natural products is associated with the concept of utility, that is, any product of such production has this property. In other words, it is able to provide certain human needs, even those that are detrimental to health (drugs, alcohol, cigarettes, etc.), since this can satisfy the corresponding either biological needs or spiritual needs.
Manufacturers of products regard them as a set of material properties that allow them to obtain the required utility. An example is iron ore, which is assessed based on the quantitative content of iron in it, or milk, which has a certain amount of vitamins, proteins, fats, milk sugar, etc. That is, there is a direct relationship between the amount of nutrients in a product and its quality.
Consumers are quite often guided by their subjective assessments of the benefits of a good, while neglecting their important objective qualities. Natural products are perceived by them from the perspective of personal needs, preferences and tastes.
Characteristic natural production in this aspect it comes down to the fact that the range of useful manufactured products that are created for consumption within an economic unit is very limited. In contrast to the second form of production, based on the principle of social division of labor, in which not only the quantity and range of manufactured products increases, but also the properties of the goods change.
Nuances of accounting for products in physical terms within certain types of economic activity
The corresponding lists relating to the production of a certain range of goods include products that are manufactured by the organization both from its own reserves of materials and raw materials, and from unpaid semi-finished products attracted from outside (raw materials supplied by customers). It is intended for transmission to other individuals and legal entities, to their divisions and their own capital construction, and then for inclusion as an element of current assets or fixed assets. For example, special equipment, special clothing that was issued own staff against wages or spent on personal production needs.
For each range of products that are accounted for in value terms (for example, furniture, medicines, etc.), as well as information regarding production and product balances, accounting is carried out at the actual cost or at the corresponding discount prices. And if the goods are manufactured using raw materials supplied by customer, then accounting is carried out at the total cost, including prices for these raw materials.
Production of products in kind may also include in their reports information regarding the release of prototypes, if, according to the production technology, they are recognized as fully completed, are accepted by the relevant technical control service and own necessary document, acting as confirmation of their quality and compliance with mandatory standards.
Production and sales plan
It acts as a central section of both strategic and current plans. Its goal is to ensure growth in product output, significantly improve the quality of goods, better satisfy consumer demand and use production capacity and raw materials to the maximum.
What indicators are calculated in this plan?
It allows you to determine the required quantity and range of products intended for production according to the following indicators:
1. Production volume in physical terms:
- finished products (processed, there is compliance with state standards, international standards and technical conditions);
- semi-finished product (not all stages of processing have been completed, it is considered the final product of the corresponding stage and the starting material for the next one);
- work in progress (at the processing stage, all stages within the workshop or enterprise have not been completed);
- products of auxiliary workshops (steam, electricity, water supplied for own needs or to third parties).
The use of appropriate natural meters is based on the use of certain physical and technical properties of processes and objects. So, for example, bread products can be measured in basic units of mass - kilograms or tons.
The volume of production in physical terms of each division is taken into account by summing it constituent components: finished products, semi-finished products and work-in-progress products.
2. Volume of production in conditionally physical terms.
3. Production volume in value terms.
4. Indicators of the existing production capacity of the enterprise.
5. Indicators characterizing the quality of products.
The main advantage and main disadvantage of natural meters
The positive aspect is expressed in the fact that these meters make it possible to visualize the physical volume of the object being taken into account.
Their main disadvantage is the limited ability to generalize various accounting objects.
Natural indicators are summarized only for homogeneous operations. Heterogeneous objects cannot be summed up. As a result, it is impossible to get a general idea about them.
Analysis of the production plan in physical terms
Its implementation is assessed in the following areas:
- established nomenclature;
- number of orders;
- the number of certain contracts;
- the range of products of individual types of production.
Two directions for assessing the output of a certain range of products
Firstly, it is necessary to analyze the annual plan and growth rates in comparison with the previous period.
Secondly, production in physical terms is studied in dynamics over a certain number of years.
Assessment of plan implementation by nomenclature
It is based on a comparison of the established plan target with the actual quantity of products produced in the corresponding physical terms, as well as the volume of products produced in the previous reporting period.
For each assortment, the degree of plan fulfillment is established in percentage terms, and the deviation from it and from the production output of the previous period is determined in absolute terms.
You can also install:
- the number of product groups in which the plan was met or exceeded;
- the number of types of products produced outside the plan;
- the number of types of products established by the plan, but not produced in a given reporting period.
Natural production - this is the kind of it in which people create products to satisfy their own needs. Natural production is characterized by the following features that express the essence of its inherent economic relations.
1. Subsistence farming is a closed system of organizational and economic relations. The society in which it dominates consists of a mass of economic units. Each unit relies on its own production resources and provides itself with everything necessary for life. She performs all types of economic work, ranging from mining different types raw materials and ending with final preparation for their consumption.
2. Natural production is characterized by universal manual labor: each person performs all the basic work. It applies simplest technique and handicraft tools. Labor activity is unproductive, production output cannot increase significantly.
3. Subsistence farming is characterized by direct economic connections between production and consumption. It develops according to the formula “production-distribution-consumption”. This direct connection ensures sustainability of subsistence farming.
Subsistence farming predominated in the pre-industrial stage of production.
Commodity production - a type of economic organization in which useful products are created for sale on the market. The following features are inherent:
1. This economy is an open system of organizational and economic relations. Workers create healthy products not for their own consumption, but for sale.
2. The production of goods is based on the division of labor. Its development depends on how deep the specialization of workers and enterprises in output individual species products or parts of complex products. This phenomenon is objectively caused by technical progress, which in turn receives a big boost from the division of labor.
3. The commodity economy is characterized by indirect, mediated connections between production and consumption. They develop according to the formula “production-exchange-consumption”.
Commodity farming is a system of organizational and economic relations, thanks to which the diversified progress of the economy is ensured. As the division of labor deepens, the use of ever more advanced technology expands. This causes an unprecedented increase in output, and thanks to increased labor productivity, output per capita increases. In addition, the variety of products intended for exchange on the market for other products is increasing.
Reasons for the emergence of commodity production:
Social division of labor
Economic isolation of people for the manufacture of some product.
Depending on the forms of ownership and organizational relations, two types of commodity production are formed. Historically, the first was simple commodity production of peasants and artisans, in which manual labor was used. In this case, due to low output, commodity production is adjacent to the dominant natural production. Under capitalism, the main positions in the economy are occupied by developed commercial farming. In the initial phase of capitalism, a developed commodity economy becomes all-encompassing. All created benefits are converted into market products. Wage labor becomes the subject of purchase and sale.
24.Two properties of a product: value and use value. The value of the product.
Price- English value - social labor embodied in a product, the value of which is determined by the amount of socially necessary working time. Only goods intended for exchange have value, i.e. having social use value. The cost category is justified by the classical school political economy, and then K. Marx.
Consumer cost- the usefulness of a thing, its ability to satisfy a person’s needs. Main. Elements of Comrade Produced – goods.
On the one hand, a product acts as a thing, on the other hand, it is any monetary object. Transactions.
Each product has two consumer properties. Cost and exchange rate. Will consume. st-t - the ability to satisfy a particular need.
Exchange rate is the ability of a product to be exchanged for another product in a definition. Proportions.
Pre-work. The theories of art (Smith, Recardo, Marx) and their followers believed that the basis of exchange is labor, i.e. The value of a commodity is determined by the amount of labor measured by the socially necessary slave. Time for his nickname.
Pre-Austrian schools (Menger, Ben Bawerk, Wieser) tr. Theor. The theory was contrasted with the theory of marginal utility; it reflects the subjective attitude of consumers to consumption. Thankfully. As needs are saturated, satisfaction from consumption of the good decreases accordingly, but with a limited supply of the good, there is a limiting example of the least utility for the consumer, conclusion - the value of a good of a given kind is determined by the utility of the limiting instance.
Subsistence production is a type of production in which people create products to satisfy their own needs. This historically first form of production is the simplest.
Natural production is characterized by the following features, expressing the essence of its inherent economic relations.
1. 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. She carries out all types of economic work, starting from the extraction of various types of raw materials and ending with their final preparation 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 equipment (hoe, shovels, rakes, etc.) and handicraft tools. Naturally, under such conditions, labor activity is unproductive, and production output cannot increase significantly.
Subsistence farming is characterized by direct economic connections between production and consumption. It develops according to the formula “production - distribution - consumption”, i.e. the created products are distributed among all participants in production and, bypassing exchange, go into personal and industrial consumption. This direct connection ensures sustainability of subsistence farming.
In modern conditions, subsistence farming has largely survived in many countries where the pre-industrial economy predominates. B weak developed countries back in the middle of the 20th century. 50-60% of the population was employed in natural and semi-natural production. Currently, the backward structure of the national economy is being dismantled in these states.
In our country, natural production is especially developed in the personal subsidiary plots of peasants and in the garden plots of urban residents.
One of the paradoxes of today's Russia is that after the “movement towards the market” was announced in 1992, in a number of cases a movement began in the opposite direction. Thus, the number of garden plots with natural production has increased significantly (this is a means of providing oneself with urgently needed food products). We find confirmation of this in the statistical data given in table. 7.1.
Another paradox is that instead of moving towards the market, many regions of the country have increased economic autarky (closedness). They introduced a ban on the export of food to other regions, thus trying to improve the supply of food to their local population. However, naturalization of hosts - Table 7.1
Share of food products received by the Russian population from private plots in total consumption, % Product 1980 1999 Vegetables and melons 36 77 Fruits and berries 22 87 Milk and dairy products 21 49 Meat and meat products 19 59
economic ties also has negative consequences - it undermines normal economic ties on a national scale.
Subsistence farming is stagnant, because manual and unspecialized labor produces very low output. As a result, the amount of goods per capita of the country almost does not increase, and people’s needs remain traditional for a long time.
Subsistence farming prevailed during the longest pre-industrial stage of production. In the conditions of machine industry, it was finally replaced by the second type of economy, which became dominant.
More on the topic Subsistence farming:
- 4.1. Commodity farming: conditions of origin and main features. Types of social economy: subsistence farming, commercial farming. Regulated Economy Models
History knows two main types of production: natural and commercial. They are directly opposite to each other and differ:
a) by the closedness or openness of the economy;
b) according to the development or underdevelopment of the social division of labor;
c) by forms of social product;
d) by type of economic relations between producers and consumers of goods and services.
Natural economy is a farm that satisfies its needs exclusively through its own production.
Let us consider the characteristic features of a natural economy.
Firstly, subsistence farming - closed system organizational and economic relations. The society in which it dominates consists of a mass of economic units (families, communities, estates) separated and economically isolated from each other. Each unit relies on its own production resources and provides itself with everything necessary for life. She performs all types of economic work, ranging from mining various types raw materials and ending with their final preparation for consumption.
Secondly, natural production is characterized by manual universal labor, excluding its division into types: each person performs all the basic work.
Thirdly, the subsistence farming system is characterized by direct economic ties between production and consumption. It develops according to the formula “production – distribution – consumption”. That is, the created products are distributed among all participants in production and, bypassing their exchange, go into personal and productive consumption.
In modern conditions, subsistence farming has largely survived in developing countries. Moreover, it coexists with commodity and capitalist production. In our country, natural production is developed in the personal subsidiary plots of peasants and in the garden plots of urban residents.
Commodity production- a type of economic organization in which useful products are created for sale on the market.
A commodity (market) economy has the following main features.
Firstly, this farm is open system organizational and economic relations. Here workers create healthy products not for their own consumption, but to sell them to other people.
Secondly, the production of goods is based on division of labor. Its development depends on the extent to which the specialization (separation) of workers and enterprises deepens in the production of certain types of products or parts of complex products. This phenomenon is objectively caused by technical progress, which in turn gives impetus to the division of labor. From this it is clear that - in contrast to natural production - commodity economy opens up wide scope for the action of the universal economic law division of labor. In accordance with this law, the economy progresses due to increasing qualitative differentiation (dismemberment) of labor activity, which leads to the isolation and coexistence of its various types. As a result, a division of labor arises:
A) international– between countries;
b) general– between major sectors of the national economy;
V) private– division within large industries into sub-sectors and types of production;
G) single– within enterprises into their different divisions.
Thirdly, commodity production is characterized indirect, indirect communications 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 money and only then enter the sphere of productive or personal consumption. The market confirms or does not confirm the need to manufacture these products for sale.
The conditions for the emergence of commodity production are the social division of labor and the economic isolation of people in the manufacture of any product. The economic isolation of producers is closely related to the forms of ownership of the means of production. Thus, it is most complete and even absolute when a private owner acts as a producer. To a lesser extent, isolation is achieved when renting out any property. But private property alone does not give rise to a commodity-market economy, as can be seen in the example of natural production under the slave and feudal system.
Types of commercial farming: A) simple commodity production; b) general (large) commodity production. Simple commodity production- characteristic is the representation in one person of the producer of material goods, the entrepreneur and the owner of the means of production. General (large) commodity production. In this form of management, hired labor is used. In economic relations, two poles are clearly identified: the employer and the employee. Hired workers are not the owners of either the means of production or the product created. They are also distant from production management. Large-scale commodity production is always designed to use a significant amount of labor and capital. In large factories and factories, the individual division of labor is intensively developing, and an aggregate worker is being formed. Machines brought into the production system are used as the technical base. It should be noted that in conditions of general commodity production, huge masses of products are thrown onto the market. All factors of production are involved in trade turnover. Labor force, as well as scientific and technical information, become specific goods.
Question
Agrarian relations represent a certain set of economic relations that develop not only in agriculture, but throughout the agro-industrial complex, the relations of agribusiness as a whole.
These are relations regarding the appropriation and use of land and other means of agricultural production, which determine the corresponding relations in the process of production, distribution, exchange and consumption of agricultural products. Agrarian relations were identified as a separate group due to the presence of specific production in the agricultural sector of the economy, which is primarily associated with the special role of land as the main factor of production. Land is a non-reproducible factor of production; it cannot be increased, moved, or updated, since it is limited by the surface of the earth's land. It is not a product of labor, does not wear out, does not lose its useful properties with the right and rational use during operation. Land in agriculture is both a means of labor and an object of labor.
In addition, the agricultural production process is characterized by the following features: interaction of natural and economic processes, hence high or low yield; seasonal nature of production; alternating active and passive periods in production; availability of productive consumption of own products.
Agrarian relations are determined nature of land tenure And land use. These concepts must be distinguished from each other. Land tenure means recognition of the right of a given person to a certain plot of land on historical grounds. More often, land ownership refers to ownership of land. Land ownership is exercised (realized by this right) by land owners. Land use - this is the use of land in the manner established by custom or law. The user of land is not necessarily its owner. Thus, the tenant is not the owner of the land, but uses it under certain conditions. Thus, in real life, land use and land ownership are often personified by different individuals (or legal entities).
In a market economy, as a rule, agrarian relations include the relationships of three social groups:
· land owners who implement land ownership;
· capitalist tenants or farmers implementing land use;
· hired agricultural workers who are neither landowners nor land users.
Personal subsidiary plots (PHS) occupy an important place in the socio-economic structure of agriculture. In them, farming is carried out at the expense of the own labor of workers employed in the public economy or members of their families. This is, as a rule, small-scale production, serving as an additional source of satisfying the need for agricultural products and additional income for the family.
Agricultural policy is a policy aimed at dynamic and effective development not only agricultural production, but also other structural elements agribusiness, ensuring on this basis the growth of living standards of the population and social progress in the country.
Question
The market is an economic category; it is closely related to exchange, circulation, trade, and trade services. The market arose 6-7 thousand years ago, developed and continues to develop at the present time. It is the result of civilization.
The market is a specific form of manifestation of commodity exchange and circulation, where commercial capital operates, and not only it.
Thus, market as an economic category is a set of specific economic relations and connections between buyers and sellers, as well as trade intermediaries regarding the movement of goods and money, reflecting the economic interests of subjects of market relations and ensuring the exchange of labor products.
The essence of market relations comes down to reimbursing the costs of sellers (producers and traders) and making a profit, as well as satisfying the effective demand of buyers on the basis of free mutual agreement, remuneration, equivalence and competition. This is precisely what constitutes the generic, essential features of the market. Material basis of market relations constitutes the movement of goods and money. But since the market operates in a certain economic system and, developing, turns into an independent subsystem, this cannot but determine the specificity of the forms of its manifestation (different share of market relations in the entire economic system, various organization market, various shapes, methods and dimensions of regulation, etc.).
The essence of the market is reflected in its main economic functions, which express the main purpose of this category and reflect its essence.
We can name the following market functions :
1) coordination of production and consumption in the assortment structure, maintaining a balance of supply and demand in terms of volume and structure. The market performs this function of regulating proportions by establishing connections between hundreds and thousands of independent producers and consumers through the purchase and sale of goods and services;
2) establishing value equivalents for the exchange of products. At the same time, the market compares individual labor costs for the production of goods with a social standard, i.e. compares costs and results, reveals the value of a product by determining not only the amount of labor expended, but also its return;
3) economic incentives for production efficiency, encouraging producers to create the necessary goods at the lowest cost and obtaining sufficient profits; stimulation of scientific and technological progress and, on its basis, intensification of production and efficient functioning of the entire economy. The market's stimulating function is very important for economic development;
4) ensuring dynamic proportionality in the development of individual regions, regions, territories, national economies in conditions of deepening the social division of labor and the trend of internationalization and growth of integration processes in the economy. This function is relevant now for Russia and can serve as an important argument in favor of concluding economic agreements between the constituent entities of the federation to create conditions for the functioning of a single all-Russian market;
5) ensuring economical consumption, reducing distribution costs in the sphere of consumption(costs of buyers for purchasing goods) and proportionality of population demand with wages.
From the essence of the market and its functions, its role in the process of social reproduction logically follows. The concepts of “function” and “role” of the market are closely related. The function directly expresses the essence of the phenomenon and determines the role of the category that implements it.
Role of the market in social production comes down to the following:
1) issue a signal to production: what, in what volume and in what structure should be produced;
2) balance supply and demand, ensure a balanced economy;
3) differentiate commodity producers in accordance with the efficiency of their work and focus on covering market demand;
4) washing out uncompetitive enterprises and curtailing obsolete industries.
The combination of market and state elements in the country's economy is a criterion for organizing the sequence of individual economic actions. In other words, a market with many independent buyers and sellers does not have a significant impact on price. However, in these conditions, the functioning of the public sector acts as an instrument of economic interaction, allowing a competitive market to exist and function in the same way as the public sector.
Commodity exchange is carried out in the following forms:
· barter, that is, the direct exchange of goods for goods;
· purchase and sale, that is, exchange is mediated by money;
· trade, or commodity circulation. This is a developed form of commodity exchange, where the isolation of producers and consumers has reached the highest level and purchase and sale is carried out through the mediation of third parties. Thanks to their activities, trade exists as an independent branch of the social economy.
Question
The central category of the market economy is the commodity. Product - this is any object intended not for its owner’s own use, but for alienation through sale. A variety of objects can take the commodity form. But most goods are products of labor. Therefore, it is often said that a product is a special form of labor product, distinguished by the fact that it reaches the final consumer through sale.
In accordance with labor theory the product has three values properties :
1) use value;
2) exchange value;
3) cost.
Use value- this is an external beneficial effect that constitutes the nature of any product of labor, including goods. The emergence of a new product of labor means, first of all, the emergence of a new use value, i.e. a new aggregate useful qualities the result of human activity.
Exchange value- this is a specific property inherent only in the commodity form of the product of labor. It represents the quantitative proportion in which one commodity is exchanged for another. For example, when one fountain pen is exchanged for five notebooks, the exchange value of the five notebooks is one fountain pen.
What the goods exchanged have in common is their price . It represents labor embodied in goods. In equivalent exchange, when supply and demand coincide, each product is exchanged for any other product only in that quantitative proportion that fixes the equality of the labor embodied in them. Thus, exchange value is a form of expression of the value of a commodity, which by itself cannot appear in a single commodity. The value of a commodity is expressed only in its exchange, namely in the quantitative proportion in which it is exchanged for another commodity.
The dual nature of the commodity is due to the dual nature of the labor embodied in the commodity. The types of labor are as varied as the use values produced.
Question
Under competition usually refers to rivalry in any business field (in business) between individual legal or individuals- competitors interested in achieving, as a rule, the same goals.
From the point of view of a company or enterprise, such a goal is to maximize profits, increase sales volumes, and fight for the limited volume of effective consumer demand, conducted by them in accessible market segments, and, as a rule, through the release of a high-quality product (goods and services) at lower prices. prices than those of a competitor, winning strong preferences among clients (consumers) by satisfying their needs, demands and requests.
Basic conditions for the emergence of competition:
1) complete economic (economic) isolation of each commodity producer;
2) complete dependence of the commodity producer on market conditions;
3) confrontation with all other commodity producers in the struggle for consumer demand.
By the end of the 20th century. formed general ideas about the essence of competition and its main driving forces, expressed in four classical models: perfect (pure) competition, monopolistic, oligopolistic competition and pure monopoly , these three types are imperfect. Currently, four main types of competition can be distinguished:
For pure competition (perfect) characterized by a large number of firms and enterprises selling standardized products, there is no control over price, demand is very elastic, non-price methods of competition are not practiced, and there are no obstacles to organizing a business.
A purely competitive market consists of a fairly large number of sellers competing with each other. Each of them offers standard, uniform products to many customers. Production volumes and supply from individual producers constitute an insignificant share of total output, therefore one firm cannot have a significant influence on the market price and should not “agree with the price” or accept it as a certain given parameter. Participants in a competitive market have absolutely equal access to information, that is, all sellers have an idea of price, production technology, possible profit and so on. In turn, buyers are aware of prices and their changes. There is also freedom of entry and exit to the market: any company, if desired, can begin production of a given product or freely leave the corresponding market. Price fluctuations in the market can be quite intense. However, the difference in price is not the result of the activities of spontaneous sellers, but rather the process of interaction between supply and demand in a given market.
For monopolistic competition characterized by a small number of enterprises selling differentiated products, the range of price control is narrow, and non-price methods of competition are used.
Among distinctive features Monopolistic competition can be distinguished: existence of a sufficiently large number of firms, which limits price control, lack of mutual dependence, and secret collusion becomes practically impossible; products are characterized by real and imaginary differences and differing conditions of their sale; economic rivalry entails both price and non-price competition; entry into the industry is relatively easy.
For oligopolistic competition characterized by a small number of enterprises; the range of price control depends on the level of consistency between enterprises’ actions: predominantly non-price competition; the presence of significant obstacles to organizing a business.
Oligopoly is a unique type of competition. Oligopoly is not allowed in pure form classified as perfect or imperfect competition. Oligopolistic industries are characterized by the presence of several firms, each of which has a significant market share. Firms in such conditions are interdependent; the behavior of any of them has a direct impact and is itself influenced by competitors.
The reasons behind the development of oligopoly are economies of scale, other barriers, and the benefits of mergers. Oligopolists are characterized by a tendency to maximize overall profits, that is, to behave to some extent as pure monopolists. Market shares in oligopolistic industries are usually determined on the basis of non-price competition.
For a pure monopoly typically one enterprise produces unique products that have no effective substitutes; price controls are significant, demand is inelastic, and entry into the industry is blocked for other firms. A pure monopoly is characterized by the following main features: in conditions of a pure monopoly one company is the sole manufacturer of the product or service provider; a monopoly product is always unique in the sense that there are no close substitutes for it, that is, there are no acceptable alternatives; a pure monopolist always sets his own price and establishes significant control over price.
If, by definition, a pure monopolist has no direct competitors, there must be a reason for this lack of competition: the existence of a monopoly depends largely on the existence of barriers to entry. A pure monopolist will maximize profits by equalizing marginal revenue and marginal cost. Given the same costs, a pure monopolist will find it more profitable to limit the volume of production and charge a higher price than it would have done competitive seller. A monopolist can increase its profits through price discrimination. However, in any case, the monopoly contributes to increasing income inequality. Monopolistic competition implies a market situation in which relatively big number small manufacturers offer similar but not identical products.
There are several types of monopolies.
1. Natural monopoly. It is possessed by private owners and economic organizations that include rare and freely non-renewable elements of production (rare metals, special land plots, etc.).
2. Artificial monopolies. This conventional name refers to associations created for the sake of obtaining monopolistic benefits. Artificial monopolies act in the form of various monopolistic relations. As a result of the concentration of production, different organizational forms of monopoly may arise: cartel, syndicate, trust, concern, etc.
1. Cartel- the simplest form of monopoly association. The objects of the agreement may be: pricing, spheres of influence, sales conditions, use of patents. Cartels operate, usually within the same industry, and are subject to antitrust laws.
2. Syndicates- organizational form monopolistic association, in which those included in it lose commercial marketing independence and retain legal and industrial freedom of action. In a syndicate, product sales and order distribution are carried out centrally.
3. Trust- a form of monopolistic association in which the enterprises included in it lose both the production and commercial independence of the enterprises; management is exercised from a single center. The trust's profits are distributed according to the business participation of individual enterprises.
4. Concern- an organizational form of association of enterprises from various industries under unified management and financial control.
5. Pool has become widespread in the field of using projects. Pool participants come to mutually beneficial agreements on the form of transfer of patents and licenses. Profits are distributed in accordance with the quota determined upon joining the pool.
6. Holding- a joint stock company that legally owns a controlling stake independent enterprises to exercise control over their operations. In conditions market economy Holding companies are widespread.
In economic science, two forms of social economy (production) are identified as the main ones: natural economy and commodity economy. Subsistence and commodity production differ, first of all, according to the following characteristics: the development or underdevelopment of the social division of labor; closedness or openness of the economy; economic form of the manufactured product; a way to resolve the contradictions between production and consumption.
Historically, the first form of social economy was subsistence farming.
A subsistence economy is an economy that satisfies all its needs through self-production.
The characteristic features of subsistence farming are:
1) isolation (autarkic form of management), which manifests itself in the fact that each economic unit (family, community or estate) relies on its own resources and provides itself with everything necessary for life; the product produced does not take the form of a commodity, but forms a fund of life funds for the manufacturer himself, there are no economic ties with other economic units;
2) the use of universal labor, which means that each worker performs all types of work, as a rule, manually, using primitive technologies, using simple tools (hoes, shovels) and handicraft tools, which leads to extremely low labor productivity;
3) direct economic connections between production and consumption, lack of commodity exchange;
4) vertical economic relations (owner - overseer - forced laborer) with the inherent dependence of the forced laborer on the owner of the land and capital;
5) non-economic coercion to work using various types of violence, when forced people, for example, were driven to work under pain of physical harm.
Subsistence farming is distinguished by conservatism, traditionalism, limited and constant scales of production and consumption (simple reproduction), and relatively stable sectoral proportions of production, which determine the slow pace of economic development.
This form of economy arose in ancient times, during the period of the formation of the primitive communal system, when human production activity began and the first branches of the economy appeared - agriculture and cattle breeding. In its pure form, natural economy existed only among primitive peoples who did not know the division of labor, exchange and private property.
It is important to note that subsistence farming is also present in modern economic systems. More than half of the population is employed in subsistence and semi-subsistence farming in underdeveloped countries. According to experts, subsistence farming will continue to dominate for a long time. significant place in their economy. Elements of natural economy take place both in modern developed countries and in the Russian economy. Thus, small farmers, peasants on their plots, as well as city dwellers at their dachas primarily conduct subsistence farming, consuming most of the products produced by their family.
The development of factors of production led to a deepening of the social division of labor, an increase in its productivity, and the formation of surplus products that the owner could sell or exchange for other goods.
Division of labor is differentiation, specialization of labor activity, leading to the identification and implementation of its various types.
With the vertical division of labor, it is divided into levels, for example, production and production management are separated. With the horizontal division of labor, types of work are divided within one level, for example, manufacturing, processing of product parts and assembly of the product from these parts are distinguished.
The division of labor and economic isolation of producers who make decisions independently at their own peril and risk, based on personal interests, were the objective reasons for the transition from a subsistence economy to a commodity economy, in which economic relations between people are manifested through the purchase and sale of the products of their labor on the market .
Commodity farming is a type of farming in which production is market-oriented.
In a commodity economy, goods are created for exchange and sale. The characteristic features of commercial farming are:
1) social division of labor, leading to qualitative differentiation, specialization of people’s labor activities, contributing to the improvement of various types of labor and technologies for the production of goods;
2) openness of the economy, meaning that products are produced not for personal consumption, but for sale to other persons on the market;
3) indirect, mediated economic connections, when production and consumption are interconnected through market exchange;
4) horizontal economic relations based on contracts, while the producer and consumer have economic freedom (the right to choose what to produce and what to buy);
5) the absence of non-economic coercion to work, which means that every employee feels the need and material interest in work, increasing production output and qualitative improvement of manufactured goods.
One of the indisputable advantages of commodity economy is its inextricable connection with the progress of technology, technology and other elements of the productive forces. It is highly adaptable to different economic systems, in each of them it serves the implementation of those forms of ownership that are characteristic of them.
Simple (underdeveloped) commodity production is characterized by the social division of labor; private ownership of the means of production and products of labor; personal labor of the owner on the means of production; satisfying social needs through the purchase and sale of labor products; economic connection between people through the market. In other words, simple commodity production is the production of products for exchange by independent private small commodity producers - peasants and artisans. Developed commodity production differs from simple themes that not only all products of labor, but also factors of production (land, labor, capital, entrepreneurial abilities, information) become goods. Market relations become universal, the separation of producers from the means of production occurs.