Resources and factors of production. Examples of factors of production

Main Factors of Production

Recent decades have been characterized by an increase in resource costs and, as a result, a decrease in profitability from their use. Prices for land, energy, raw materials, and wages are rising. All this leads to a change in the behavior of people and firms in the world economy, encouraging them to find substitutes for increasingly expensive resources and ways to reduce production costs.

Demand for factors of production is made only by entrepreneurs, i.e. that part of society that is capable of organizing and implementing the production of products and services necessary for final consumption.

Production is the process of making material or spiritual goods. In order to start production, it is necessary to have at least someone who will produce and what they will produce from.

Marxist theory identifies human labor power, the subject of labor and the means of labor as factors of production, dividing them into two large groups: personal factor of production and material factor. The personal factor is the labor force, as the totality of a person’s physical and spiritual abilities to work. The means of production act as a material factor. The organization of production offers the coordinated functioning of these factors. Marxist theory proceeds from the fact that the interrelation of factors of production and the nature of their combination determine the social orientation of production, the class composition of society and the relationship between classes.

Marginalist (neoclassical, Western) theory traditionally identifies four groups of factors of production: land, labor, capital and entrepreneurial activity.

Land is considered as a natural factor, as natural wealth and the fundamental basis of economic activity. Here, from the material factor, natural conditions are allocated to a special fund. In this case, the term “land” is used in the broad sense of the word. It covers all the utilities that are given by nature in a certain volume and over the supply of which man has no control, like the earth itself, water resources or minerals. Unlike other factors of production, land has one important property - limitation. A person is not able to change its size at will.

Labor is represented by a person’s intellectual and physical activity, the totality of an individual’s abilities, determined by general professional education, skills, and accumulated experience. In economic theory, labor as a factor of production refers to any mental and physical efforts made by people in the process of economic activity in order to produce a useful result.

The time during which a person works is called working time. Its duration is variable and has physical and spiritual boundaries. A person cannot work twenty-four hours a day. He needs time to restore his ability to work and satisfy his spiritual needs. Scientific and technological progress leads to changes in the length of the working day, in the content and nature of work. Labor becomes more qualified, time for professional training increases, productivity and labor intensity increase. The intensity of labor is understood as its intensity, the increase in the expenditure of physical and mental energy per unit of time. Labor productivity shows how much product is produced per unit of time. A variety of factors influence the increase in labor productivity.

Capital is another factor of production and is considered as a set of means of labor that are used in the production of goods and services. The term "capital" has many meanings. In some cases, capital is identified with the means of production, in others with accumulated material wealth, with money, with accumulated social intelligence. Views on capital are varied, but they all agree on one thing: capital is associated with the ability of certain values to generate income. Outside of movement, both the means of production and money are dead bodies.

Entrepreneurial activity is considered as a specific factor of production, bringing together all other factors and ensuring their interaction through the knowledge, initiative, ingenuity and risk of the entrepreneur in organizing production. This is a special type of human capital. Entrepreneurial activity in its scale and results is equal to the costs of highly qualified labor.

An entrepreneur is an integral attribute of a market economy. The concept of “entrepreneur” is often associated with the concept of “owner”.

In real life, an entrepreneur strives to find a combination of production components that ensures the greatest output at the lowest cost. The multiplicity of combinations is due to scientific and technological progress and the state of the market for production factors. Production is fluid. It constantly undergoes large and small revolutions in technology, technology, and labor organization. The company is constantly searching for the most rational solutions.

Formation of prices for production factors

Any enterprise simultaneously acts as a commodity producer and seller of certain products and as a buyer of production factors. As a seller, he has a typical interest - to sell his products at a higher price. In the factor of production market, an enterprise acts as a buyer interested in buying productive resources (labor, capital, land) cheaper. All operations are subordinated to profit. This is the main incentive and the main indicator of enterprise efficiency.

The magnitude of production costs and their structure determine specific requirements for the structure of the purchase of production factors. The characteristics of demand for factors of production are determined by the factor of production itself. There is only one selection criterion here - the lowest production costs with high quality products. By comparing the market price of each factor of production with the marginal product that is produced by that factor, the entrepreneur establishes his choice.

The starting point for the demand for factors of production is the demand for the final product of the enterprise, i.e. demand depends on the volume of production and the prices of factors of production. Equilibrium in the market for factors of production presupposes the receipt of equal income for the increase in any of them. The general principles of forming the demand curve for any factor of production boil down to the following:

· the initial demand is the demand for the manufactured product;

· equality of marginal income and marginal costs determined by the enterprise program;

· the structure of demand for factors is achieved under the condition that the dollar spent on the acquisition of any factor gives the greatest marginal product.

Labor supply, like any other factor, has its own characteristics. They are connected:

· with the size of the population and, above all, its working population;

· qualitative composition of the population, the level of its general and professional training;

· length of the working day and working week;

· with the compliance of the professional and qualification structure of the working population with the needs of the national economic complex of workers in various specialties.

The general level of wages is revealed by listing the supply and demand curve. An increase in demand for labor increases the level of wages and leads to an increase in employment. A fall in labor demand leads to the opposite consequences.

In the movement of capital prices, what matters is the availability of free capital, its supply and demand for it.

The rental price of a production factor is the price of hiring or renting a production factor per unit of time. This includes workers' wages, rent, interest, etc.

Factor markets

Factors of production markets are areas of commodity turnover of such important groups of economic resources as land, natural resources and artificial raw materials, labor resources of various specialties and qualifications, capital and technical resources. The movement of factors of production is mediated by money and securities markets and is regulated by the appropriate economic policy of the state. The market for production factors has its own characteristics. In general, the same laws of supply and demand and the same mechanism of competitive price equilibrium apply here. However, the factors of production themselves as commodity groups, their appropriation, distribution and use affect deeper socio-economic relations.

Therefore, factor markets are a special type of market in a market economy system. Unlike markets for final goods and services, where firms are sellers and consumers of goods and services are buyers, in factor markets firms are buyers of labor, natural resources, land, capital in its various forms - monetary, productive, loan or fictitious capital (capital represented in the form of securities). Firms use different types of inputs (factors of production) to produce goods and services. Some of them are raw materials and materials, the second are goods produced by other firms, the third are different types of labor of various classifications, the fourth are capital goods (produced means of production, for example, a machine or building), the fifth are various forms of entrepreneurial activity, the sixth – information.

There are many different ways of combining factors of production to produce a given volume of output. To maximize profits, a firm must choose a production technology that minimizes the cost of producing its chosen volume of output. To do this, the company must have an idea, firstly, of the production function of a given enterprise, and secondly, of the prices prevailing in the market of production factors. When purchasing factors of production on the market, an enterprise faces the problem of pricing them. Prices in this case are determined by the interaction of changes in supply and demand for one or another factor; after all, they also act as goods. However, this demand is derivative. It depends on the demand for products manufactured using this resource, and the dependence here is directly proportional. Prices for resources, for example, labor, capital, are the main factor determining monetary income, and at the same time they perform the function of allocating resources across various industries and firms.

Features of entrepreneurship

The combination of the owner and the entrepreneur in one person began to collapse with the advent of credit and became most pronounced with the development of joint-stock companies. In a corporate economy, property as a legal factor loses its administrative functions. The role of property is becoming increasingly passive. The owner only owns a piece of paper. The manager is responsible for performance results. He is driven by the will to win, the desire to fight, and the special creative nature of his work.

Naturally, all this applies to countries with established market economies. During the transition period to the market, different laws apply.
The difference in the classification of factors of production between Marxist and Western economic theory is due to the class approach to the analysis of natural production. The given classification is flexible. The level and efficiency of production is increasingly influenced by modern science, information and economic factors. The environmental factor of production is becoming increasingly important, acting either as an impetus for economic growth or limiting its capabilities due to the harmfulness of technology.

In specific industries, its elements are used in various combinations and in various proportions. Such interchangeability and quantitative variability are typical for modern production and are associated with limited resources on the one hand and the efficiency of their use on the other.
In real life, an entrepreneur strives to find a combination of production components that ensures the greatest output at the lowest cost. The multiplicity of combinations is due to scientific and technological progress and the state of the market for production factors. Production is fluid. It constantly undergoes large and small revolutions in technology, technology, and labor organization. The company is constantly searching for the most rational solutions. What gives a greater effect - “investments in the human factor, or in the growth of means of production” (capital)? How will an increase in factor A and a decrease in factor B affect the company's costs and income? At the same time, it is necessary to take into account constant changes in prices for production resources.

Main Factors of Production

The functioning of enterprises and households is based on the use of production factors and the receipt of corresponding income from their use. Factors of production are understood as particularly important elements or objects that have a decisive impact on the possibility and effectiveness of economic activity.
In previous lectures, the laws of supply and demand were considered, regardless of which product groups are included in market turnover and competitive pricing. Meanwhile, the market turnover of production factors has its own characteristics, although in general the same mechanism of competitive price equilibrium operates here. Behind the production resources involved in economic activity are always their owners (land, capital, labor, knowledge, etc.) and none of them will transfer the right to use this or that resource to other persons free of charge. Therefore, the movement of the main elements of production, their appropriation, disposal and use affects deeper socio-economic relations.
Recent decades have been characterized by an increase in resource costs and, as a result, a decrease in profitability from their use. Prices for land, energy, raw materials, and wages are rising. All this leads to a change in the behavior of people and firms in the world economy, encouraging them to find substitutes for increasingly expensive resources and ways to reduce production costs.
Demand for factors of production is made only by entrepreneurs, i.e. that part of society that is capable of organizing and implementing the production of products and services necessary for final consumption.
Production is the process of making material or spiritual goods. In order to start production, it is necessary to have at least someone who will produce and what they will produce from.
Marxist theory identifies human labor power, the subject of labor and the means of labor as factors of production, dividing them into two large groups: personal factor of production and material factor. The personal factor is the labor force, as the totality of a person’s physical and spiritual abilities to work. The means of production act as a material factor. The organization of production presupposes the coordinated functioning of these factors. Marxist theory proceeds from the fact that the interrelation of factors of production and the nature of their combination determine the social orientation of production, the class composition of society and relations between classes.

Marginalist (neoclassical, Western) theory traditionally identifies four groups of factors of production: land, labor, capital, and entrepreneurial activity.
LAND is considered as a natural factor, as natural wealth and the fundamental basis of economic activity. Here, from the material factor, natural conditions are allocated to a special fund. In this case, the term “land” is used in the broad sense of the word. It covers all the utilities that are given by nature in a certain volume and over the supply of which man has no control, be it the land itself, water resources or minerals. Unlike other factors of production, LAND has one important property - limitation. A person is not able to change its size at will. In relation to this factor, we can talk about the law of diminishing returns. This refers to returns in quantitative terms or diminishing returns. A person can influence the fertility of the earth, but this influence is not unlimited. Other things being equal, the continuous application of labor and capital to land and to the extraction of minerals will not be accompanied by a proportional increase in returns.

WORK is represented by the intellectual and physical activity of a person, the totality of an individual’s abilities, determined by general and professional education, skills, and accumulated experience. In economic theory, labor as a factor of production refers to any mental and physical efforts made by people in the process of economic activity in order to produce a useful result.
“All work,” notes A. Marshall, “has as its goal to produce some result.” The time during which a person works is called working time. Its duration is a variable value and has physical and spiritual boundaries. A person cannot work twenty-four hours a day. He needs time to restore his ability to work and satisfy his spiritual needs. Scientific and technological progress leads to changes in the length of the working day, in the content and nature of work. Labor becomes more qualified, time for professional training increases, productivity and labor intensity increase. The intensity of labor is understood as its intensity, the increase in the expenditure of physical and mental energy per unit of time. Labor productivity shows how much product is produced per unit of time. A variety of factors influence the increase in labor productivity.

CAPITAL is another factor of production and is considered as a set of means of labor that are used in the production of goods and services. The term "capital" has many meanings. In some cases, capital is identified with the means of production (D. Ricardo), in others - with accumulated material wealth, with money, with accumulated social intelligence. A. Smith considered capital as accumulated labor, K. Marx - as a self-increasing value, as a social relation. Capital can also be defined as investment resources used in the production of goods and services and their delivery to the consumer. Views on capital are varied, but they all agree on one thing: capital is associated with the ability of certain values to generate income. Outside of movement, both the means of production and money are dead bodies.

An entrepreneur is an integral attribute of a market economy. The concept of "entrepreneur" is often associated with the concept of "owner". According to Cantilhomme (18th century), an entrepreneur is a person with an uncertain, non-fixed income (peasant, artisan, merchant, etc.). He receives other people's goods at a known price, but will sell them at a price still unknown to him. A. Smith characterized an entrepreneur as an owner who takes economic risks in order to implement a commercial idea and make a profit. The entrepreneur acts as an intermediary, combining factors of production at his discretion.

The rental price of a production factor is the price of hiring or renting a production factor per unit of time. This includes workers' wages, rent, interest, etc. Rental prices form the current income of the owners of production factors. With perfect competition in commodity and factor markets, the rental price of a factor is equal to the value of the marginal product of a given factor, i.e.: r = VMPK - MRPK. CAPITAL PRICE OF A FACTOR OF PRODUCTION is the price at which the purchase and sale of a particular factor of production is carried out. For example, the price of a company’s industrial building is 10 million rubles. This is its capital value. Funds for the purchase of this building are required today. When deciding to purchase a factor of production, the consumer compares the additional income obtained as a result of the use of a new unit of the factor with its rental price. The firm will purchase the services of a factor of production as long as the rental price of this factor is less than the additional income that this factor provides.
By purchasing a factor at its capital price, the future owner thereby acquires the services of the factor for the entire period of its use. Funds for the acquisition of a production factor must be spent at the moment, and the owner will receive income from its use over a long period of use of the factor in the form of a stream of future income distributed over time. This raises the problem of balancing current expenses associated with the acquisition of capital factors with the stream of future income. Current expenses are compared with future income streams through discounting. Let us assume that an entrepreneur, purchasing, for example, a machine, estimates the expected income from its use.

The expected future income is summed up from the annual income from the use of the machine. Therefore, it is necessary to determine how much money needs to be paid for the machine at the present time in order to extract the desired income after a certain period of its use. The discounted or present value depends on: the interest rate; a specific amount of annual expected income. Let's look at these dependencies using conditional examples. Let's say the interest rate is 5%, then the discounted cost is 1 thousand rubles. with a deposit for one year it is equal to: PV = 1000/(1+0.05) = 952.4 p. Now let's increase the interest rate to 10%. In this case, the discounted value is 1 thousand rubles. for one year will be: PV = 1000/(1+0.1) = 909.1 p. From the examples given, the higher the interest rate, the lower the discounted value will be. Let's move on to the second position.

What are factors of production?

Factors of production are resources needed to produce goods and services. Traditionally divided into components:

labor resources, or labor;
investment resources, or capital;
natural resources, or land;
entrepreneurial talent, or entrepreneurial abilities;
information; a specific form of information is technology;

Labor is a purposeful human activity to create economic benefits, a manifestation of the totality of a person’s mental and physical abilities.
Capital includes the totality of goods created by a person’s past labor. It is a mistaken belief that stocks, bonds, money, and bank deposits do not belong to this factor of production.

Land as a factor of production covers all agricultural land and urban land that is allocated for residential or industrial development, as well as the totality of natural conditions necessary for the production of goods and services.

Entrepreneurial talent presupposes a person’s special abilities, which consist in his ability to:

organize the production and release of goods and services by combining all the necessary factors of production;
make major decisions on production management and business management;
risk money, time, labor, business reputation, since activity in the market is associated with great uncertainty, and the result is not guaranteed;
to be an innovator, that is, to introduce new technologies, new products, methods of organizing production.

One of the key economic resources at the present stage of development of society is information.

Possession of reliable information is a necessary condition for solving the problems facing an economic entity. However, even complete information is not a guarantee of success. The ability to use the information received to make the best decision under the current circumstances characterizes such a resource as knowledge. The carriers of this resource are qualified personnel in the field of management, sales and customer service, and product maintenance. It is this resource that gives the greatest return in business. “What distinguishes a strong company from a weak one is, first of all, the level of qualifications of its specialists and management staff, their knowledge, motivation and aspirations”

In a market economy, all of the above economic resources are freely bought and sold and bring their owners special (factor) income:

rent (land);
interest (capital);
wages (labor);
profit (entrepreneurial ability).

German economist and philosopher of the 19th century. Karl Marx identified personal and material factors of production, while the person himself, as the bearer of labor power, acts as a personal factor, and the material factor of production refers to the means of production, which in turn consist of means of labor and objects of labor.

A means of labor is “... a thing or a complex of things that a person places between himself and the object of labor and which serves for him as a conductor of his influence on this object.” Means of labor, and above all tools of labor, include machines, machine tools, tools with the help of which a person influences nature, as well as industrial buildings, land, canals, roads, etc. The use and creation of means of labor is a characteristic feature of human labor activity . In a broader sense, the means of labor include all the material conditions of labor, without which it cannot be carried out. The general labor condition is the land, the working conditions are also industrial buildings, roads, etc. The results of social knowledge of nature are embodied in the means of labor and the processes of their production use, in engineering and technology. The level of development of technology (and technology) serves as the main indicator of the degree to which society has mastered the forces of nature. “Technology reveals man’s active relationship to nature, the direct process of production of his life”

Objects of labor are a substance of nature that a person influences during the labor process in order to adapt it for personal or industrial consumption. An object of labor that has already undergone the influence of human labor, but intended for further processing, is called Raw Material. Some finished products may also enter the production process as an object of labor (for example, grapes in the wine industry, animal butter in the confectionery industry). “If we consider the entire process from the point of view of its result - the product, then both the means of labor and the object of labor both act as means of production, and the labor itself - as productive labor”

According to K. Marx, the totality of production factors act as productive forces that are inextricably linked with production relations. Some characterize the material content of the process of social production, while others characterize its historically determined form. Evolving, each stage of development of productive forces, characterized by the type of production relations, constitutes a unique mode of production.

Non-Marxist economic theorists do not agree with K. Marx’s position that new value is created only by hired workers, but believe that all factors of production take an equal part in its creation. Thus, Alfred Marshall wrote: “capital in general and labor in general interact in the production of the national dividend and receive their income from it according to the measure of their (marginal) productivity. Their mutual dependence is the closest; capital is dead without labor; a worker without the help of his own or someone else's capital will not live long. When labor is energetic, capital reaps rich fruits and grows rapidly; Thanks to capital and knowledge, the ordinary worker of the Western world is fed, clothed and even housed in many respects better than the princes of former times. Cooperation between capital and labor is as necessary as that between spinner and weaver; slight priority on the spinner's side, but this does not give him any advantage. The prosperity of each of them is closely connected with the strength and energy of the other, although each of them can gain for itself temporarily, or even permanently, at the expense of the other, a somewhat larger share of the national dividend.”

The main factors of production are labor, land and capital

In the most general understanding, resources (from the French ressource - auxiliary means) are funds, values, reserves, opportunities, sources of funds and income. Usually, economic resources are highlighted - everything that is necessary for the production process.

It should be noted that along with the concept of “resources of production” in the economic literature the concept of “factors of production” is often used as a synonym. A factor (from the Latin “factor” - doing, producing) is the cause, the driving force of any process, phenomenon, determining its character or its individual features.

In fact, what they have in common is that both resources and factors are the same natural and social forces with the help of which production is carried out. The difference between them is that resources include those natural and social forces that can be involved in production, and factors include resources actually involved in this process. Based on this, the concept of “resources” is broader than “factors of production”.
Today in Western economic theory it is customary to divide factors of production into three groups.

Land as a factor of production is a natural resource and includes all the benefits provided by nature (land, water, minerals, etc.) used in the production process.
Capital is everything that can generate income, or resources created by people to produce goods and services. This approach to this category synthesizes the points of view of Western economists on capital (for example, A. Smith interpreted capital as part of the stock used in material production, D. Ricardo - as a means of production, J. Robinson considered money as capital). In Marxist political economy, capital was understood differently - primarily as a value that brings surplus value (“self-increasing value”), as a determining economic relation, and a relation of exploitation.
Labor is a purposeful activity of people that requires the application of mental and physical effort, during which they transform objects of nature to satisfy their needs. Strictly speaking, the “labor” factor also includes entrepreneurial abilities, which are sometimes considered as a separate factor of production. The fact is that land, labor and capital by themselves cannot create anything until they are united in a certain proportion by an entrepreneur, an organizer of production. It is for this reason that the activities of entrepreneurs and their abilities (entrepreneurship) are often considered as an independent factor of production.

2 .1 . Factors of production – 1) resources with the help of which the production of goods can be organized; 2) resources used in production, on which the quantity and volume of manufactured products largely depend; 3) factors used in the production of goods and services.

Factors of production = economic resources.

Economic resources (from French. ressource - auxiliary means) is a fundamental concept of economic theory, meaning sources, means of ensuring production.

Economic resources are divided into : 1) natural (raw materials, geophysical), 2) labor (human capital), 3) capital (physical capital), 4) working capital (materials), 5) information resources, 6) financial (monetary capital). This division is not strictly unambiguous.

The production process is the transformation of economic resources (factors of production) into goods and services.

2.2 . What are factors of production? ?

2.2.1. Version No. 1: Factors of production = economic resources: 1) labor (the activity of people in the production of goods and services by using their physical and mental capabilities); 2) land (all types of natural resources available on the planet and suitable for the production of economic benefits); 3) capital (industrial building, machines, tools). No less important is another factor that connects all the others, 4) entrepreneurial abilities.

2.2.2. Version No. 2: Factors of production = 1) labor + 2) means of production (natural resources + [produced resources = capital]).

2.2.3. Nowadays, another very specific type of production factors has acquired immeasurably greater importance than before - 5) information (knowledge and information that people need for conscious activity in the economic world). Possession of reliable information is a necessary condition for solving the problems facing an economic entity. However, even complete information is not a guarantee of success. The ability to use the information received to make the best decision under the current circumstances characterizes such a resource as knowledge. The carriers of this resource are qualified personnel in the field of management, sales and customer service, and product maintenance. It is this resource that gives the greatest return in business. “What distinguishes a strong company from a weak one is, first of all, the level of qualifications of its specialists and management staff, their knowledge, motivation and aspirations.

In addition to the listed factors, the following play an important role in the economy: 6) general culture; 7) science; 8) social factors (state of morality, legal culture).

2.3 . Work- a set of physical and mental abilities that people use in the process of creating economic wealth.

Labor characteristics : 1) labor intensity (labor intensity, which is determined by the degree of labor expenditure per unit of time); 2)labor productivity (performance = labor productivity, which is measured by the amount of products produced per unit of time).

2.4 . Under " earth"Economists understand all types of natural resources. This group includes free benefits (???) of nature that are used in the production process: plots of land on which industrial buildings are located, arable land on which crops are grown, forests, water, and mineral deposits.

2.5 . Capital(from lat. capitalis - main) was understood by Smith and Ricardo as a means of production. Other economists argued that capital is “a sum of money” and “securities.” There is a view that capital is a person's knowledge, skills and energy used in the production of goods and services. Today, in a broad sense, capital is understood as everything that brings income to its owner. These can be means of production, leased land, cash deposits in a bank, and labor used in production.

Capital can be 1)real(or physical) and 2) monetary, or financial(money used to purchase physical capital).

!!! Factors of production include not all capital, but only real capital - buildings, structures, machines, machinery and equipment, tools, etc. - that is, everything that is used to produce and transport goods and services.Financial capital (stocks, bonds, bank deposits and money) is not considered a factor of production., since it is not associated with real production, but acts as a tool for obtaining real capital.

Investments(from lat. investre – to clothe) – 1) long-term investments of material and monetary resources in production.

The continuously occurring circular movement of capital forms its turnover. At the production stage, different parts of productive capital turn over in different ways (over different periods). Therefore, capital is divided into fixed and working capital.

Main capital (machines, equipment, buildings): 1) used for a number of years, 2) transfers its cost to the product in parts, 3) costs are returned gradually.

Working capital (raw materials, materials, semi-finished products, wages of workers): 1) consumed in one production cycle, included in the entire newly created product, 3) costs are reimbursed after the sale of the product.

2.6 . Entrepreneurial abilities are the most important productive resource. They are possessed by a very small part of people who perform a number of functions, without which organization and successful production activities are impossible.

Entrepreneurial functions : 1) the ability to correctly combine factors of production - labor, land, capital - and organize production; 2) the ability to make decisions and take responsibility; 3) ability to take risks; 4) be receptive to innovations.

2.7 . Factor income : 1) labor?> wage; 2) earth?> rent(income of someone who owns land); 3) capital?> percent(payment for using other people's money); 4) entrepreneurial skills?> profit.

Rent(from lat. reddita - returned) - income regularly received by the owner from the use of land, property, capital, which does not require the recipient of the income to carry out entrepreneurial activities, or the cost of additional efforts.

Loan capital– temporarily available funds provided as a loan on the terms of repayment and payment.

Percent(from Latin pro centrum – for a hundred) – 1)credit interest (loan interest -mouth.) – the fee that the borrower must pay for using a loan, money or material assets; 2)deposit interest – payment to a bank depositor for providing the bank with money on a deposit for a certain period.

2.8 . Karl Marx on the factors of production .

Productive forces (= factors of production ) = 1) personal factor (person) + 2) material factor, means of production (means of labor + object of labor).

Labor toolsis “... a thing or a complex of things that a person places between himself and the object of labor and which serves for him as a conductor of his influences on this object.” Means of labor, and above all instruments of labor, include machines, machine tools, tools with which man influences nature, as well as industrial buildings, land, canals, roads, etc. The use and creation of means of labor is a characteristic feature of human labor activity. In a broader sense, the means of labor include all the material conditions of labor, without which it cannot be carried out. The general labor condition is the land, the working conditions are also industrial buildings, roads, etc. The results of social knowledge of nature are embodied in the means of labor and the processes of their production use, in engineering and technology. The level of development of technology (and technology) serves as the main indicator of the degree to which society has mastered the forces of nature.

Subject of labor- a substance of nature that a person influences during the labor process in order to adapt it for personal or industrial consumption. An object of labor that has already undergone the influence of human labor, but intended for further processing, is called raw material. Some finished products may also enter the production process as an object of labor (for example, grapes in the wine industry, animal oil in the confectionery industry). “If we consider the entire process from the point of view of its result - the product, then both the means of labor and the object of labor both act as means of production, and the labor itself - as productive labor.”

The totality of production factors act as productive forces that are inextricably linked with production relations. Some characterize the material content of the process of social production, while others characterize its historically determined form. Evolving, each stage of development of the productive forces, characterized by the type of production relations, constitutes a unique mode of production.

Mode of production = productive forces + relations of production.

Modern economic theory classifies the resources necessary for production into large groups called factors of production (Fig. 2.3).

Rice. 2.3.Factors of production

The first and most important factor of production ¾ work. This is an expedient economic activity of people aimed at satisfying needs and generating income. Let us emphasize that in a market economy, obtaining income is the immediate goal, and satisfying people’s needs is the final and indirect goal.

In the process of work, a person expends mental and physical energy. In various types of labor, either the mental (intellectual) principle or the physical one can predominate. Labor can be simple or complex, skilled. The results of labor also vary greatly: material or intangible product (for example, information), service.

Second factor of production ¾ land (natural resources). This term should be understood in its expanded meaning. Firstly, land ¾ is generally any place where a person is: lives, works, rests, has fun, etc. Secondly, production and other enterprises are also located on the earth as a territory. Thirdly, the land, which has the biological properties of fertility, serves as an object for agriculture and forestry. Fourthly, it is also a source of minerals, water and other resources. Speaking about land as a factor of production, economic theory takes into account all these functions of natural factors in the economy.

Third factor of production ¾ capital. There are a huge number of definitions of capital. Their essence depends on the goals, logic, aspects chosen for the study of economics by one or another economic theory. In the concept of factors of production, capital is understood as material (real) capital - all means of production for long-term or short-term use. This includes raw materials, machinery, equipment, production facilities, etc.

There is a separate category of money capital - financial resources intended for transformation into material capital, as well as those allocated for the purchase of other factors of production. It should be borne in mind that money itself is not a factor of production, although it plays a huge role in the activities of any entrepreneur. Simply due to the monetary nature of a market economy, the acquisition of real factors of production is mediated by money.

The listed three factors of production are called classical and are undoubtedly recognized by most economists. However, modern economic theory often identifies several additional factors.

Economists have long noticed that individual enterprises and even entire countries that have approximately the same classical factors of production (equal volumes of labor resources, capital, land) often achieve completely different economic results. Moreover, it happens that countries richer in all kinds of resources are in poverty, while those poor in them are ¾ prospering. In order for the factors of production to be used and combined in the best possible way, a special kind of factor is needed ¾ entrepreneurial ability. The point is that in market economy there is a special kind of activity that is carried out by an entrepreneur, i.e. a person who organizes, plans economic activities, makes decisions, etc. Moreover, it is not at all necessary that the owner and entrepreneur be combined in one person. It is enough for the owner to delegate to the entrepreneur those components of the bundle of ownership rights to the enterprise that are necessary to manage it. Without an entrepreneur, the combination of factors of production is impossible. He has special abilities, character, and knowledge, as a result of which he can combine factors of production in a new way and contribute to the development of individual enterprises and the economy of the country as a whole.

The factor entrepreneurial ability was given an insignificant place in the USSR. If the role of labor and material (capital, or in the old terminology ¾ funds, land) resources was recognized, then the concept of “entrepreneurial ability” was simply absent. Only indirectly the importance of this factor was taken into account in connection with the problems of managerial work. But the work itself in this area and management decisions were considered not productive, but inevitable additional expenses. Moreover, entrepreneurial abilities are not limited to work alone. Thus, making a commercial decision in a complex environment requires not only intellectual effort, but also a willingness to accept the material risk of failure. This aspect of the named factor was not considered at all. Is this where the roots of numerous irresponsible decisions so often made by state and party functionaries are hidden? After all, they personally did not suffer losses!

Currently, in Russia, in the conditions of the emergence of a market economy, entrepreneurial abilities, both in theory and in practice, are recognized as a necessary factor of production. Many people have learned from their own experience in the field of entrepreneurship that this type of activity requires special knowledge, a special mindset and character, and a kind of talent. And if we put aside criminal methods of enrichment, then the most successful "new Russians" in fact, they possess the necessary alloy of entrepreneurial traits of a very contradictory nature: the ability to take risks, initiative and at the same time prudence, rationalism, knowledge. The talent of an entrepreneur is as rare as other talents.

Finally, as a factor of production, many economists identify technical progress. In a modern economy, not only the size of capital is important, but also its technological level. Industrial installations may, for example, have the same cost, but one of them may be newer and the other older. Obviously, if other factors of production are the same, the enterprises employ an equal number of people, they are managed by equally talented managers, etc., then the best economic results of a company using the latest equipment should be explained precisely by the technical progress realized in the new technology.

Recently, primarily due to the widespread use of computers, computers have begun to play a special role in production. information(various databases, electronic archives, etc.). Therefore, the question is raised about identifying it as a separate factor, although often information is also considered simply a special type of the factor technical progress.

All additional factors of production are united by the fact that they manifest themselves through more efficient use of classical factors. The same number of workers, machines and land creates different volumes of products (and of different quality) depending on what entrepreneurial, scientific, technical and information resources ensure their use.

These are in general terms factors of production . We will refer to them more than once for a more detailed and thorough study.

Factors- these are the main reasons and conditions for production. The whole essence of production is the use of production factors and the creation with their help, on their basis, of an economic product. So this is the driving force of production, the components of production potential.

In its simplest form, the totality of production factors is reduced to a triad land, labor, capital, embodying the participation of natural and labor resources, means of production in the creation of a product of economic activity. A number of authors of books on economics call the fourth factor entrepreneurship. But expanding the number of production factors from three to four does not exhaust their possible list. Let us dwell on the analysis of production factors in a little more detail.

Natural factor reflects the influence of natural conditions on production processes, the use in production of natural sources of raw materials and energy, minerals, land and water resources, the air basin, natural flora and fauna. The natural environment as a factor of production embodies the possibility of involving in production certain types and volumes of natural resources, converted into raw materials from which the whole variety of material and material products of production is made. Nature, including not only the Earth, but also the Sun, represents an energy storehouse of production, which, as we know, is not able to function without replenishment with energy. The natural environment, the Earth, is at the same time a production site on which the means of production are located and workers work. Finally, nature is important for production as a factor not only in current production, but also in future production.

Despite all the importance and significance of the natural factor in relation to production, it acts as a more passive factor than labor and capital. Natural resources, being mainly raw materials, undergo transformation into materials and then into the main means of production, acting as active, creative factors. Therefore, in a number of factor models, the natural factor as such often does not appear explicitly, which does not in any way reduce its importance for production.

Labor factor represented in the production process by the labor of the workers involved in it. The combination of labor with other factors of production initiates the production process as such. At the same time, the “labor” factor embodies the whole variety of types and forms of labor activity that directs production, accompanies it and represents it in the form of direct participation in the transformation of matter, energy, and information. So all participants directly or indirectly involved in production contribute their labor to it, and both the course of production and its final result depend on this common labor.

Although labor itself is a factor of production, taking into account the pronounced resource nature of economic factors of production, quite often it is not labor itself that is considered as a production factor as the expenditure of a person’s physical and mental energy or working time, but labor resources, the number of people employed in production or the working-age population. This approach is often used in macroeconomic factor models. It is also important to know and understand that the labor factor of production activity is manifested not only in the number of workers and labor costs, but also, to no lesser extent, in the quality and efficiency of their work, in labor output. In real calculations, not only the labor expended is taken into account, but also its productivity.

Factor "" represents the means of production involved in production and directly involved in it. The labor factor in the form of labor resources, labor power, participates in production only in one aspect of its existence, the so-called living labor. At the same time, work for a person is rather one of the conditions, and not the goal, purpose, way of his existence. As for the means of production, they are created precisely for production, intended and devote themselves entirely to production. In this sense, capital as a factor of production is even higher than the labor factor.

Capital as a production factor can appear in different types, forms and be measured in different ways. It has already been noted that productive capital personifies and physical, and turning into it money capital. Physical capital is presented in the form of fixed capital (fixed means of production), but it is legal to add to it working capital (working capital), which also plays the role of a factor of production as the most important material resource and source of production activity (some authors do not classify materials as capital and consider them as an independent factor). When considering long-term, future factors of production, capital investments and investments in production are often considered as such. This approach is legitimate, since in the long term, monetary and other investments in production turn into production factors.

The fourth factor of production reflects the impact entrepreneurial activity on the results of production activities. Entrepreneurial initiative has a beneficial effect on the results of production activities. At the same time, it is quite difficult to quantify and measure the effect of this factor. The factor itself, called entrepreneurship or entrepreneurial activity, does not have generally accepted quantitative measures, unlike labor and capital. For this reason alone, it is necessary to judge the impact of this factor on the volume or other results of production in qualitative rather than quantitative terms. Entrepreneurial initiative increases the productivity of the labor factor in production.

Let's name another significant production factor. Generally it is called scientific and technical level of production. In its economic essence, the scientific and technical (technical and technological) level expresses the degree of technical and technological perfection of production. This factor is discussed in more detail in the subsequent section of this chapter. A high scientific and technical level of production leads to increased returns to the labor factor (labor productivity) and capital (fixed assets), i.e. manifests itself through other factors. At the same time, the scientific and technical level of production is also an independently acting factor. By helping to improve the technical level and quality of manufactured products, technical and technological progress makes it possible to increase demand for them, and this leads to an increase in prices and sales volumes, the cost of the sold product. So scientific, technical, technological progress, raising the technical level of production, will create in its person another significant production factor.

As mentioned above, the factors can be identified as independent, considered separately from capital (fixed assets) materials, used in production.

Production function and its factors

The theory of factors of production relies to a certain extent on the use of mathematical modeling apparatus, which are factor models in the form of a mathematical relationship that connects the value of the resulting production result with the values of the production factors that determined this result. The most common type of such factor models are the so-called. A typical type of such a function is a dependence, a formula connecting the maximum output (production volume) Q with the factors on which this release depends. In general, the production function can be represented as follows:

Q = Q(L, K, M, T...),

Where L,K, M, T... - Factors of production: labor, capital, materials, technical level, etc.

Production functions can be used in macroeconomics, where they reflect the dependence of the total volume of production in monetary terms on the general, integral values of factors of production calculated for the economy as a whole. At the same time, production functions are applicable to individual industries, types of production, and even enterprise-wide production. If the production function is used in microeconomics, it usually reflects the relationship between the volume of output (its maximum value) and the quantities used in the production of factors.

The Cobb-Douglas production function is widely known and represents a common economic model. This function looks like

Q = a L α K β ,

Q- volume of products produced for a certain period, for example annual output;
A— constant coefficient;
L- labor factor, volumetric indicator of the size of labor resources;
TO- the amount of capital used (the cost of fixed assets or the volume of capital investments in production);
α,β — exponents satisfying the relation α + β= 1.

The given production function represents a two-factor model in which only the variables labor and capital influence output. Desired production volume Q can be obtained with various combinations of factors L And K, as can be seen in Fig. 1, which shows curves characterizing combinations of values of variable factors that ensure obtaining a given volume of output.

Rice. 1. Production volumes at different values of production factors

For example, to achieve production volume Q =Q 0 possible with a combination of factors L 1 And K 1, L 2 And K 2, L 3 And K 3, etc. If it is necessary to increase output volumes to values (Q = Q 1, or Q = Q 2 then with the given coefficient A and indicators α And β in the production function it will be necessary to increase the values of factors L And K and find other combinations of them, corresponding, for example, to the position of a point A on the curve Q = Q 1, or points IN on the curve Q= Q 2 .

Curves whose points correspond to combinations of production factors that ensure the output of the same volume of products are called. So in Fig. 1 shows three isoquants.

Production functions are part of the arsenal of economic and mathematical apparatus of micro- and macroeconomics, used primarily in theoretical research, but they also have practical applications.