History knows two main types of production: natural and commercial. They are straight opposite each other each other and differ according to the following criteria:
a) by the closedness or openness of the economy;
b) according to the development (or underdevelopment) of the social division of labor;
c) according to the form of the social product;
d) by type of economic relations between producers and consumers of goods and services.
Therefore, when organizing any production, the following issues must be resolved first of all:
1) for whom (which consumers) to create benefits;
2) how to organize the work of all manufacturers of useful things;
3) what social form the produced products of labor will take;
4) how to establish economic connections between production and consumption.
These issues are most easily resolved in natural farming.
Natural production.
Natural production is a type of production in which people create products to satisfy their own needs.
For system natural production characteristic the following features, expressing the essence of its inherent economic relations.
Firstly, 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) 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 different types raw materials and ending with their final preparation for consumption.
This feature of economic organization manifests itself as a tendency in cases where production is naturalized at the microeconomic level - within the boundaries of modern industrial and agricultural enterprises, business associations and regions, although a developed commodity economy may exist within the state. All such production units are curtailing their economic ties with other parts of the national economy and strive to independently provide themselves with everything they need.
Sometimes a similar trend affects macroeconomics. Individual states pursue an economic policy known as “autarky.” Autarky means the creation of a closed, self-sufficient economy within one country, which is accompanied by a severance of traditional economic ties with other countries. The desire for autarky also manifests itself when high protective customs duties (monetary fees on imported and exported goods) are created, which sharply limits the import of foreign goods into the country. The same sometimes occurs in closed international organizations pursuing the task of self-sufficiency and refusal to import the most important industrial, raw materials and food products.
Secondly, natural production is characterized by manual universal labor, which excludes its division into types:
each person performs all the basic work. Its material basis is simplest technique(hoe, shovels, rakes, etc.) and handicraft tools. Naturally, under such conditions, labor activity is unproductive, and production output cannot increase significantly. This happens, for example, in a garden plot
ke, where family members do not usually share different types of agricultural work.
Thirdly, the subsistence farming system is characterized by direct economic connections 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 industrial consumption. This direct connection ensures sustainability of subsistence farming.
Natural economy is historically the first type of economic organization of society. It arose during the formation of the primitive communal system, when branches of production appeared - agriculture and cattle breeding. In the most pure form natural economy existed only among primitive peoples, when they did not know the social division of labor, exchange and private property.
Subsistence farming dominated the economy, which was based on a system of personal (non-economic) dependence. It dominated in slave states, which were a system of closed, economically independent societies, and also constituted one of the main features of the feudal economy. The landowner's wealth was formed through various in-kind duties and payments. The economy of the feudally dependent peasant is also natural.
IN modern conditions subsistence farming has largely survived in developing countries where pre-industrial economies predominate. Moreover, such an economy coexists with commodity and capitalist production in export industries associated with the world market. Although many developing countries began to break down the backward structure of the national economy, back in the middle of the 20th century, 50-60% of the population was employed in natural and semi-natural production.
In our country, natural production is especially developed in personal farming agriculture peasants and in the garden plots of urban residents. According to budget surveys, at the end of the 1980s in the USSR, 12 million families had such plots. One plot yielded an average of 4.5 centners per year. products. Of this amount, 91% of the family's products were kept for themselves, 4% were given to relatives and friends, and only 5% were allocated for sale.
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 the urgently needed benefits of life). Another paradox is that instead of moving towards the market, many regions of the country strengthened economic autarky, introducing a ban on the export of food to other regions (this was how they tried to improve the supply of food to the local population). However, the naturalization of economic ties also has negative consequences - stagnation in the economy.
In Western literature, the subsistence farming system is usually referred to as " traditional economics". This partially characterizes the features of this system: a) the dominance of the custom of creating the same thing for consumption; b) a sharp limitation of technical progress; c) stagnation in socio-economic relations; d) society’s defense of immutability existing image life.
Subsistence farming prevailed during the longest pre-industrial stage of production. At the industrial stage, it was finally replaced by the second type of economy, which became dominant.
Commodity production.
Commodity production is a type of economic organization in which useful products are created for sale on the market. Commodity farming has the following main features.
Firstly, this economy is an open system of organizational and economic relations. Here workers create healthy products not for their own consumption, but to sell them to other people. The whole stream of new things goes "beyond each production unit and rushes to the market to meet customer demand.
Secondly, the production of goods is based on the division of labor. Its development depends on how deep the specialization (separation) of workers and enterprises in output individual species products or parts of complex products. This phenomenon is objectively caused by technical progress, and the latter, in turn, receives a greater impetus through 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) 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 sectors of the national economy - agriculture, industry, etc.), private (division within large industries into sub-sectors, types of production) and individual (within enterprises - to their different divisions). Thus, the inextricable connection of commodity production with the division of labor, and therefore with the progress of technology, is one of its undoubted advantages compared to subsistence farming.
Thirdly, the commodity economy is characterized by indirect, mediated connections between production and consumption. They develop according to the formula “production - exchange - consumption”. Manufactured products first enter the market for exchange for other products (or money) and only then enter the sphere of productive and personal consumption. The market confirms or does not confirm the need to produce this product for sale. It is through exchange that economic relations of the type "subject (producer) - commodity - money - subject (buyer)" are established.
This means that a commodity economy is a system of organizational and economic relations, thanks to which an ever-increasing variety of products is created that are intended for exchange on the market for other products.
Commodity farming is such general organizational and economic relations that can serve a wide variety of socio-economic systems. However, the volume and significance 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 appearance is the social division of labor. The beginning here was made by a large social division of labor: the first (separation of farming and livestock breeding in agriculture) and the second (separation of crafts from agriculture).
Another reason is the economic isolation of people for the manufacture of some product. This organizational-economic relationship organically complements the social division of labor: a person chooses some type of work and turns it into an independent activity. This, of course, increases his dependence on other commodity owners and creates the need to exchange heterogeneous products and establish economic ties through the market.
The economic isolation of people is closely related to the forms of ownership of the means of production. Thus, it is the most complete and even absolute when the commodity producer is a private owner. To a lesser extent, isolation is achieved if some property is leased out - temporary possession and use: then a monopoly of the tenant's management is established for some period. 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.
Meanwhile, forms of ownership are directly related to the formation of types of commodity production. Depending on the degree of development of property relations and organizational-economic relations, two types of commodity production are formed. Historically, the first was a simple commodity economy of peasants and artisans who used their labor and relatively simple tools to produce products. In this case, due to the low output of workers, the sphere of commodity production and circulation is underdeveloped and often coexists with subsistence farming, which occupies the main positions in the economy. Under capitalism, a developed commodity economy appears, in which the dominance of natural production comes to an end, all products are transformed into goods. Labor and working hands also become the subject of purchase and sale.
At the stage of classical capitalism, a developed commodity economy assumed a universal character, since all created useful goods took a commodity form. But at the present stage of production, under the influence of the scientific and technological revolution, the development of social infrastructure and state participation in the economy, a non-commodity sector emerged. It includes the production of goods, the promotion of which into the sphere of consumption does not involve the market (these are fundamental Scientific research, free types of education, the main products of the military-industrial complex, etc.). As we will see in the next paragraph of this topic, non-commodity items etc. services constitute a special class of goods.
type of farming, in which, as opposed to commodity, products are produced for their own. consumption (in each household unit). “Under a natural economy, society consisted of a mass of homogeneous economic units... and each such unit carried out all types of economic work, starting from the extraction of various types of raw materials and ending with their final preparation for consumption” (V. I. Lenin, Works, vol. 3, pp. 15-16). Sometimes under N. x. in bourgeois literally means an economy in which exchange (if it already exists) occurs without the mediation of money, through simple barter trade (the first stage of the division of the history of economy proposed by the German economist B. Hildebrand into the stages of natural, monetary, credit). N. x. dominated in that history. period when society The division of labor was practically completely absent or was still poorly developed. N. x. was one of the characteristic features of the pre-capitalist economy. formations. It existed in its purest form during the pre-class period. system, although in some cases there was already an exchange of individual products at that time. From the same stage of development at which classes arise, N. x. everywhere already intertwined with more or less means. elements of commodity production and exchange as societies grow. division of labor exerting an ever-increasing modifying influence on it. In emerging cities, and sometimes in villages. In localities, pockets of predominantly commodity production were emerging. However, in the mere fact of the presence of production on the market and trade, even relatively developed ones, one cannot yet see evidence of the loss of N. x. predominant position in the economy. It remained dominant in the class. societies ancient world, and in the Middle Ages. Most of the production was produced in the still largely self-sufficient farms: partly within the framework of the cross. x-v, partly within the household. formations that developed on the basis and for the purpose of exploiting the labor of peasants or slaves (royal and temple estates of the countries of the Ancient East, ancient slaveholding estates, in particular latifundia, feudal estates). The exploitation of both slaves and feudal-dependent peasants took place in these farms on a subsistence basis. relations, labor power has not yet become a commodity. Basic the mass of the population continued to live in the village, combining occupation with. x-vom with the production of simple crafts consumed by it. products. Household life was characterized by isolation, local limitations and disunity, the dominance of traditionalism, and an extremely slow pace of development. As societies deepen. division of labor N. x. was increasingly replaced by commodity production. However, this process was not straightforward. Thus, the economy of the early Middle Ages was significantly to a greater extent was of a natural character than the economy of the developed ancient countries that historically preceded it. slave owner societies, during the history. developments were observed separately. periods of “natural-economic reaction”, etc. The most persistent N. x. held in societies where it lasted. time saved villages. the community, especially in its form, which was characteristic of certain countries of the East (see article Community). With the achievement of that history. steps when the logistics are added up. prerequisites for the broad development of societies. division of labor, N. x. loses dominance. position and is replaced by simple commodity, and then capitalist. production However, even later it remains as a relic. Thus, V.I. Lenin is among the social and economic ways of life that existed in Russia in the first years after Oct. revolution, also called “...patriarchal, that is, largely natural, peasant farming” (ibid., vol. 27, p. 303). In the economically backward countries of Asia, America, and Africa, where the feudal and sometimes primitive communal system (or its elements) were maintained in the 19th and even in the 20th centuries, accordingly, the modern economy was preserved longer, being combined in an ugly way in the colonies With various forms exploitation of the local population monopolistic. capital. For many views bourgeois scientists of the 19th century There was a characteristic tendency to pursue the idea of the dominance of N. x too straightforwardly and without the necessary reservations. in antiquity and the Middle Ages (K. Bücher’s attempt to summarize all the basic phenomena of economics ancient world under the concept of a “closed household”, an overly simplified idea of \u200b\u200bthe supporters of the patrimonial theory of feud. patrimony as a self-sufficient household. body, etc.). At the turn of the 19th and 20th centuries. these views have been criticized. Referring to the fact of the existence in ancient times and in the Middle Ages of already relatively developed trade and money. treatment, some researchers began to generally deny the legitimacy of characterizing the economy of these eras as subsistence economic in its basis. Rejecting the modernization views of those historians who speak of the dominance of barter in ancient times and the Middle Ages (E. Meyer, A. Dopsh, etc.), one cannot, however, go to the opposite extreme of underestimating the real importance of exchange in these historical . era, as Bucher did. Commodity production and exchange of steel important factor society life is still at that stage of development when most of the products were produced within the framework of the basic self-sufficient x-v. See Art. Commodity production. Lit.: Marx K., Capital, K. Marx and F. Engels, Works, 2nd ed., vol. 23-25 (see Subject indexes); Lenin V.I., Development of capitalism in Russia, Works, 4th ed., vol. 3; Porshnev B.F., Feudalism and the masses, M., 1964 (part 1, chapter 3); Bücher K., The Emergence of the National Economy, trans. (from German), M., 1923; Meyer Z., Economic. development of the ancient world, (translated from German), 3rd ed., M., 1910; Dopsch A., Naturalwirtschaft und Geldwirtschaft in der Weltgeschichte, W., 1930; Kula W., Teoria ekonomiczna ustroju feudalnego. Proba modelu, Warsz., 1962. Yu. A. Korkhov. Moscow.
Subsistence farming and its characteristics.
Commodity production: essence, conditions and causes of occurrence.
Product and its properties.
The essence and functions of money.
Money turnover. Elements of the monetary system.
1. Subsistence farming and its characteristics.
History knows two main types of production: natural and commercial. They are directly opposite to each other and differ according to the following criteria:
a) by the closedness or openness of the economy;
b) according to the development (or underdevelopment) of the social division of labor;
c) according to the form of the social product;
d) by type of economic relations between producers and consumers of goods and services.
Therefore, when organizing any production, the following must be decided first of all: questions:
1) for whom (which consumers) to create benefits;
2) how to organize the work of all manufacturers of useful things;
3) what social form the produced products of labor will take;
4) how to establish economic connections between production and consumption.
These issues are most easily resolved in natural farming.
Natural production- this is the kind of it 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 that express 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. 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 to any significant extent.
Subsistence farming is characterized by direct economic connections 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 industrial consumption. This direct connection ensures sustainability of subsistence farming.
In modern conditions, subsistence farming has largely survived in many countries where pre-industrial economies predominate. In underdeveloped 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 agriculture of peasants and in the garden plots of urban residents.
Subsistence farming is characterized by stagnation, because manual and unspecialized labor has a 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.
The history of the evolution of society shows that various stages During the 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 of 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 production 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.
The characteristics of natural production in this aspect boil 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 counted 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 up its components: finished products, semi-finished products and work in progress.
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.
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.
Characteristics 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 forced labor using various types 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. B weak developed countries 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.