Simple commodity production

 

Content

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

I.  The essence of commodity production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

     1.1 The main features of commodity production . . . . . . . . . . . . . . . . . . . . . . . 4

    1.2 History of development of commodity production and the economic    

           development in society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

     1.3 The Marxist theory about a basis of development of society – commodity    

         production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

II. Simple commodity production as a basis of general commodity economy . . . .9

     2.1 Definition of simple commodity production and its peculiarities . . . . . . . . 9

     2.2 Simple commodity production in pre-capitalistic modes of production . .  10

    2.3 Main contradictions in simple commodity production . . . . . . . . . . . . . . . . 13

III. Simple commodity production in modern world . . . . . . . . . . . . . . . . . . . . . . .15      

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

The purpose of the essay is studying of essence of commodity production, its features and history of development. Also we should consider simple commodity production in the conditions of all modes of production, to define its role in economic process and urgency in the modern world.

The tasks of essay are:

• to study the essence of commodity production;
• to consider the history of development of commodity production;
• to observe the Marxist theory about commodity production;
• to determine peculiarities of simple commodity production;
• to investigate simple commodity production in pre-capitalistic modes of production;
• to study main contradictions in simple commodity production;
• to determine the role of simple commodity production in modern world.

In first chapter definition of commodity production, its feature and a condition of its emergence are considered. Also in this section the role of commodity production in economic process is defined, and the Marxist theory about commodity production is studied.

In second chapter simple commodity production and its features are considered. Also in this section the main contradictions of simple commodity production and features of its existence in pre-capitalistic modes of production are defined.

In third chapter the role of simple commodity production in the modern world is considered. And also its urgency and application nowadays are defined.

For creation of this essay various sources of information were used. At formation of the content of this essay books of such authors as Zhuravlyova G.P., Karl Marx, Borisov E.F., Kiselyova M.A. were used. And some information belongs to Internet resources and different electronic encyclopedias.

 

1. The essence of commodity production

 

1. The main features of commodity production

History of an ascension of society from the lowest steps to the highest testifies that to a public economy of qualitatively various stages developments of production are inherent the general economic forms which reflect condition of productive forces and relations of production from the point of view of public division of labor and its cooperation, extent of dissociation or connections of producers, relations of a property, contents and specifics of incentives of economic progress.

The subsistence economy is such way of the organization economic activity at which production is directed directly on the satisfaction of own needs of the producer, i.e. takes place inter-economic consumption.

Natural economy is historically the first type of the organization economic activity of people. It arose in an extreme antiquity, in the period of formation primitive-communal standing, when began production activity of the person also there were first branches of an economy – agriculture and cattle breeding. Purely subsistence economy existed only at the primitive people who did not know divisions of labor, exchange and private property. In pre-capitalistic formations the natural the economy took a prevailing place in a social production, though in the antique slaveholding states the quite developed already took place commodity production.

Natural economy is one of the main lines of feudal economy. A natural form here had appropriated by the feudal lord additional product. The last acted in the form of the diverse natural duties and payments. Natural character was carried also by an economy of the dependent from feudal lords of peasants. At the same time domination of a subsistence economy in pre-capitalistic economic systems didn't exclude development commodity monetary relations. In process of development of productive forces the natural the economy is forced out by commodity production. Under capitalism it on to being collapses, though his remnants here remain. Elements of natural economy take place in the modern developed countries, where the commodity-money relations dominate. It, in particular, is shown in aspiration of some industrial and agricultural enterprises, economic associations, regions to self-sufficiency.

In modern conditions the natural the economy considerably remained in developing countries, where preindustrial production prevails. And such economy coexists with the commodity production delivering production on the world market. Though in many developing states the withdrawal pains of the backward began structures of a national economy, in the middle of the XX centuries natural and in semi-natural production 50 — 60 % of the population were occupied. In our country natural production is extremely developed in the personal subsidiary rural economy of peasants and on garden and garden sites of city dwellers. In to the first half of the 90th years quantity of garden and garden sites with natural production in our country essentially increased. The general the area of the lands being in private use of the population, including collective gardens and kitchen gardens, increased from 4,2 million hectares in 1990 to 7,7 million hectare in 1995. For this period a share of personal part-time farms generally production of agricultural production raised with 24 to 43 %. Such in the way the population began to provide more than with necessary types of food.

So, the natural economy prevailed during most long preindustrial stage of production. At an industrial stage the second sort of the organization of an economy became dominating. Commodity production is such system of the organizational and economic relations, at which useful products are created for their sale in the market. Such system possesses the following specific signs which predetermine: that to create, how to use for this purpose factors of production and for whom products intend. The most successful definition of the commodity V.I.Lenin in work "Concerning a so-called question gave productions about markets": commodity production represents such system of an economy, when "products are made by certain, isolated producers, and everyone specializes on development of one any product, so the purchase is necessary for satisfaction of public requirements - sale of products (becoming owing to this fact the goods) in the market" [1; p. 86-87.]. Proceeding from this definition, it is possible to allocate characteristic features, signs of commodity production:

First, production of the goods is based on public division work which develops between separate economic units. It development assumes production progress: qualification and ability growth workers, and also the invention of cars which facilitate and reduce work, allow one person to perform work of several. Increase in release the benefits at the specialized enterprise create possibility and need to exchange their excessive quantity for big mass of other useful things. All told allows drawing a conclusion that the commodity economy gives broad lands to the general economic law of division of labor. In compliance with this law the economy progresses owing to increasing high-quality differentiation (partition) of labor activity.

Secondly, the commodity economy is open system organizational and economic relations. Here workers create the useful products not for own consumption, and for sale to their other people. All stream of new things leaves, as a rule, out of limits of everyone production facility also directs on the market for satisfaction of demand buyers.

Thirdly, the indirect, mediated communications are inherent in a commodity economy between production and consumption. They develop on a formula: production - an exchange - consumption. Made production at first arrives on the market for an exchange for other products (or on money) and only then gets to the consumption sphere. The market confirms or doesn't confirm need to make this production for sale. Through market exchange the economic connection is established between producers and consumers of the goods. [2] Therefore, development divisions of labor, openness and market nature of economic communications removed those barriers to economy progress to which doomed its natural economy.

 

 

  1.2 History of development of commodity production and the economic    

    development in society

Regular production of the goods have existed 5-7 millennia - since the period primitive-communal system so far. It serves most various social and economic systems. In this regard it is possible to allocate the general for all historical eras of the reason of its emergence.

Commodity production appeared first of all as a result public division of labor. This general form organizational the economic relations continue to change at improvement of tools work. As technical progress doesn't know temporary borders, not has limits and development of division of labor in society, and so, improvement of a commodity economy. As we will see further, scientific technical revolution generated new, profound division of labor - manufacturing of difficult products at different plants, which entered mutual trade relations.

In the second half of the XX century for many enterprises it became characteristic not specialization on release of one product, and a diversification – production several goods. Other reason of emergence of production of the goods economic isolation of people on manufacturing any is product. This organizational and economic relation integrally supplements public division of labor. The person chooses any look works also turns it into independent activity. It, of course, strengthens its dependence on other owners of commodities, generates need to exchange diverse production and to establish economic communications through the market. In that case any noneconomic coercion to work disappears. The worker feels requirement and material interest in increasing and it is qualitative to improve manufacturing of useful things.

Economic isolation of people is closely connected with forms of ownership on means of production. So, it is the full and even absolute, when producer private owner. In a smaller measure it is reached, if any property is rented – temporary possession and using. Then for any period the tenant can own and to use another's property. But one private property in itself doesn't generate a commodity market economy. It is visible for example natural productions at a slaveholding and feudal system. Production of the goods can't normally develop within the general joint property, which complicates economic isolation of producers of useful things, their free business activity. It will completely be paralyzed, when the state becomes the unique owner of means and results of production.

 

1.3 The Marxist theory about a basis of development of society –      commodity production

Essential influence on formation of views of many representatives economic science the concept of materialistic understanding rendered the stories which fundamental principles were developed by Charles Marx (1818-1883). Starting positions of the concept consist that a basis existence and developments of society production of goods and those is changes which are caused by shifts in the production sphere, progress productive forces.

Modes of production have the specifics, the internal logic. With development of production creates the new public relations. Set relations of production, the material basis of society is defined by forms consciousnesses, legal and political superstructure of society. Right, policy, religion cope basis; interrelation between two parties public organism it is extraordinary difficult and inconsistent.

Sociological laws existing in society express a principle compliances between productive forces and production the relations, and also between an ideological and political superstructure and basis. A compliance principle between a level of development of production and a form the organizations of society explains, why there are changes in the public relations: «Relations of production become a development brake productive forces also should be transformed by change of the economic bases, - K.Marx wrote, - more or less quickly there is a revolution in to all enormous superstructure». [3; p.7] The theoretical concept offered and concretized by Marx, looks very logically. Its influences not many economists, historians, including large avoided representatives of theoretical thought of the West.

 

II. Simple commodity production as a basis of general commodity economy

 

2.1 Definition of simple commodity production and its peculiarities

Simple commodity production is a term coined by Frederick Engels to describe productive activities under the conditions of what Marx had called the "simple exchange" of commodities, where independent producers trade their own products. The use of the word "simple" does not refer to the nature of the producers or of their production, but to the relatively simple and straightforward exchange processes involved.

Simple exchange of commodities is as old as the history of trade, insofar as it has progressed beyond barter, and occurred for thousands of years before most production became organized in the capitalist way. It begins when producers in a simple division of labor (e.g. farmers and artisans) trade surpluses to their own requirements, with the aim of obtaining other products with an equal value, for their own use. Through the experience of trade, regular exchange values become established for products, which reflect an economy of labor-time. The main goal of simple commodity production is to satisfy personal needs of producer. That's why the formula of simple commodity production is: C – M – C.

Engels argued explicitly that the Marxian law of value also applied also to simple exchange, this law being modified in the capitalist mode of production when all the inputs and outputs of production (including means of production and labor power) become tradable commodities. This interpretation is however not accepted by all Marxists, some of whom see capitalist markets as functioning in a completely different way from pre-capitalist markets. Engels aimed to give a consistent explanation of the evolution and development of market economy from simple beginnings to the complexities of modern capitalist markets, but some argue he disregards the transformation of the relations of production involved.

Simple commodity production is compatible with many different relations of production, ranging from self-employment where the producer owns his means of production, and family labor, to forms of slavery, peonage, indentured labor, and serfdom. The simple commodity producer could aim just to trade his products for others with an equivalent value, or he could aim to realize a profit.

That is to say, simple commodity production is not specific to any particular mode of production, and might be found in many different modes of production, with various degrees of sophistication. It does not necessarily imply that all inputs or outputs of productive activity are commodities traded in markets. Thus, for example, simple commodity producers could produce some products for their own use on their own land, while trading another part of their products. They might buy or trade some tools and equipment, but also make some themselves. [4]

 

2.2 Simple commodity production in pre-capitalistic modes of production

Simple commodity production arises in decomposition of a primitive-communal system. It is difficult to specify precisely a historical step on which quantitative increase of elements of public division of labor and an exchange led to high-quality change in the economy organization —  to origin of commodity production. The exchange of some separate products begins very much early (perhaps, in the top paleolith). However in the beginning it was so limited that production of products for an exchange (if at all they didn't represent casual surpluses of production) was extremely insignificant and didn't render practically influence on the economy organization. Only when as a result of emergence and agriculture and cattle breeding development and progress of craft equipment labor productivity that made possible production of a quantity of products especially for an exchange essentially grew, and at the same time need for production specialization was found, commodity production becomes really necessary link in the economic organization. It was that step of development of production of goods, on which already exists (or at least there is) a class society.

The exchange of products of work as the goods, occurring in the beginning between separate communities, with development of productive forces and emergence of possibility of individual production gets into a community. In pre-capitalistic formations commodity production though has known development, but wasn't the main form of economic relations between people. In those conditions the subsistence economy prevailed. In process of trade development, including external thanks to which farms of slaveholders and feudal lords were involved to the sphere of the commodity-money relations, development and expansion of commodity production undermined a subsistence economy, promoting that to decomposition of slaveholding and feudal ways of production.

In pre-capitalistic class societies commodity production gave a smaller share of production, in these societies« … transformation of a product into the goods and consequently, and life of people as producers, play the subordinated role …» [5]. Concrete forms of commodity production of a pre-capitalistic era were various. For production some farms belonging to representatives of ruling classes and based on operation of various categories of not free people, for example slaveholding country houses of Italy of 2 century BC were focused on the market — 2 century AD, slaveholding workshops in Ancient Greece, the lordly farms of the Central and Eastern Europe based on serf work. However the small-scale commodity production of direct producers based on their personal labor property which in political economy is called as simple commodity production became the main form of commodity production during the pre-capitalistic period (especially at feudalism). Emergence and development of this small-scale commodity production was connected first of all with allocation of a special social group — the handicraftsmen working for the market and tending to concentrate in the points which are especially favorable to their professional activity and trade that led to formation of the cities as the craft and exchange centers. Gradually country farms were involved in production on the market (keeping, however, in most cases generally natural character) also.

From this the fact that in pre-capitalistic class societies the smaller part of all production fell on a share of commodity production, it is wrong to draw a conclusion that it didn't play then an essential role in public life. In farms of the handicraftsmen working for the market, especially favorable conditions for production specialization were created, in them very important part of production — the most difficult from the point of view of manufacturing equipment craft products was usually made. Therefore the satisfaction of necessary requirements and a normal course of production in these societies, as well as progress of equipment, especially craft, would be almost impossible without commodity production.

Development of commodity production accelerated accumulation of an additional product (promoting progress of production equipment) and by that expanded an economic basis of class operation, created new incentives for accumulation of riches (opening thanks to trade new possibilities for satisfaction of more difficult requirements) and new ways of operation (by trade, usury, monetary requisitions of ruling classes from the dependent population), sharply strengthened social differentiation in society. However in pre-capitalistic societies, developing in the conditions of prevalence of the natural-economy relations and within economic structure and the political establishments which have developed on their basis, commodity production couldn't function freely and completely show specific features inherent in it and regularities: action of the law of cost (according to which the exchange of the goods is made according to number of socially necessary work spent for their production) and all market mechanism of regulation of production it was at a loss and modified by extreme narrowness of the market, backwardness of trade, direct administrative restrictions of freedom of economic activity and labor modulations from one branch in another, tradition and custom domination in economy and all public life as a whole. [6]

 

 

  2.3 Main contradictions in simple commodity production

The private property opposes, separates producers. Work of each of them acts as its personal record. Each producer works separately at own risk, makes that considers it necessary or is able, in that quantity in what wishes or can, using thus own means of production available to it. Therefore in the conditions of the private property work of each producer is directly private, i.e. has private character. At the same time public division of labor, as it is known puts all producers in dependence from each other. Everyone from them makes not for itself, and for others, for an exchange the market. In total producers work at each other, and work of everyone finally potentially acts as a particle of social activities. In it public nature or nature of their work is shown.