basement with basement
Development of the theory of factors of production. The evolution of the development of factors of production in economic theory

Development of the theory of factors of production. The evolution of the development of factors of production in economic theory

J.B. Say, having set out to popularize the teachings of A. Smith, introduced into scientific circulation the so-called theory of the three main factors of production, which nevertheless became one of the most significant theories of classical political economy throughout the 19th century. The essence of this theory is that three main factors interact in social production - labor, capital and land. Moreover, the degree of participation of each of these factors in the creation of value (pricing) and income of society is allegedly due to which of the three classes - workers, capitalists or landowners - owns the corresponding factor. Hence, according to Say, it follows that thanks to the conditions of full laissez faire, the most effective interaction of these factors will be achieved and relations between classes will become harmonious.

Theory of value

With the advent of the theory of the three main factors of production by J.B. Say, it became obvious that it became, in essence, one of the polar "extractions" made by the followers of A. Smith's creative heritage. In particular, the theory of production costs by T. Malthus, popular for a considerable period of the 19th century

almost entirely based on the provisions put forward a little earlier by J. B. Say about labor, capital and land as the main factors of production. Therefore, if D. Ricardo, the utopian socialists, S. Sismondi, K. Marx and some other economists, following A. Smith’s “precepts”, considered labor to be the only source of the value of goods (services), then another and also a significant part of economists of various schools and the currents of economic thought, adopted as the initial argumentation of Say-Malthus, according to which the cost of goods is the sum of the costs of the owner-entrepreneur in the production process for the means of production (capital factor), for wages (labor factor) and for rent (land factor) .

As a result, the followers of Smith-Ricardo began to see the origin of profit and rent as a deduction from the value of labor of workers, in the exploitation of labor by capital and class antagonism. The followers of Say-Malthus, who also considered themselves Smithians, saw both the value of goods and the income of the classes of society in the joint work and peaceful cooperation of representatives of these classes. But only in late XIX in. marginalists of the second wave in the person of A. Marshall and other scientists proved the dead-end essence of both the theory of labor cost and the theory of production costs, since they are based on the cost principle.

However, as regards JB Say's theory of value, it should be added to what has been said above that he, like his teacher A. Smith, had several definitions on this score. And here, too, J. B. Say did not so much repeat his idol as he improvised in search of new “discoveries”. For example, mindful of A. Smith's position that any product has two inseparable properties - exchange value and use value - J. B. Say emphasized the special significance of the relationship between utility and value of objects (commodities). In this regard, he wrote, in particular, that "value is the measure of usefulness"28 of the subject. Thus, J. B. Say allowed for the possibility of measuring value not only by the amount of labor expended, but also by the degree of usefulness of the product of labor 29 .

income theory

Labor, land and capital, participating in the production process, according to J. B. Say, provide a service to create not only value, but also income. But the triune formula, which follows from the theory of three factors, according to which the "labor" factor generates wages as the income of workers, the "capital" factor generates profit as the income of capitalists, and the "land" factor generates rent as the income of landowners, in essence was a peculiar interpretation of the views of A. Smith. The point is that, having borrowed from A. Smith the idea of the impact of the class structure of society on the origin and distribution various kinds income, J.B. Say, as it were, "clarified" that the above factors ("labor", "capital", "land") are of independent importance in creating income for workers, capitalists and landowners.

Consequently, J. B. Say rejects any idea of the possibility, under the conditions of unrestricted free competition, of entrepreneurs to exploit the factors of production and classes of society. J.B. Say and his students, thus, tried to derive a very simplified proposition about the harmony of the economic interests of all strata of society, building their judgments on the well-known idea of A. Smith that the personal interest of an “economic man” directed by an “invisible hand” , necessarily coincides with the public.

The question of the proportions in which the value of the social product created by the main factors of production is distributed to the incomes of the classes of society owning these factors, according to J. B. Say, has no independent significance. In particular, the income of an entrepreneur, according to the definition of J. B. Say, is "a reward for his industrial abilities, for his talents, activities, spirit of order and leadership" 30 . Like T. Malthus, he was convinced that the position of the "lower classes" would certainly improve, and therefore, for the sake of replenishing the "upper classes", "the working class itself, more than anyone else, is interested in the technical success of production" 31 . As for the "producers", then among them each is interested in the well-being of the other 32 . Finally, we note that the very concept of “vulgar political economy”, which was introduced into scientific circulation mainly by K. Marx, is largely associated with the theories of the three factors of production and income of J. B. Say. These theories, as well as the cost theory of T. Malthus, K. Marx considered apologetic, deliberate and vulgar defense of the interests of the exploiting strata of capitalist society.

Reproduction theory

To explain the "longevity" of the main concept of J.B. Say - the concept of the unimpeded and complete implementation of the social product and crisis-free economic growth, embodied in the so-called law of markets - it is necessary to point out three circumstances that are rooted in the legacy of A. Smith. First, Smith's "natural order" presupposes price flexibility and wage flexibility, a mutually beneficial exchange of labor and the results of their labor of all market participants with the passive role of money. With this in mind, according to "Say's law" a different course of things is completely unacceptable. Secondly, also "thanks" to A. Smith, "Say's law" excludes any interference in the economy from the outside. It supports the requirement to minimize the bureaucratic nature of the state apparatus, to prevent protectionism. And thirdly, "Say's law" predicts the progressive development of market economic relations in society based on the achievements of scientific and technological progress. The unaccomplished cataclysms that S. Sismondi “promised” in the event of a fall in the priority role in the economic life of the country of participants in the natural economy that is fading into the past - “third parties” (artisans, peasants, handicraftsmen), also swept aside arguments against this “law”.

So, the quintessence of "Say's law" is that when society achieves and observes all the principles of economic liberalism, production (supply) will generate adequate consumption (demand), i.e. the production of goods and services under Smith's "natural order" necessarily generates income for which these goods and services are freely sold. Similarly, "Say's law" was perceived by all supporters of the concept economic liberalism who believed that flexible and free pricing in the market would lead to an almost instantaneous reaction to changes in the economic situation, being a guarantee of self-regulation of the economy.

Indeed, if we admit the possibility of a barter economy, where money is only a unit of account and the aggregate demand for it is equal to the value of all goods to be exchanged for money, then general overproduction really becomes impossible. Hence the conclusion of M. Blaug is understandable: “Products are paid for products” in domestic trade as well as in foreign trade - this is the essence of Say's law of markets. Such a simple idea created a sensation that has not quite subsided to this day.

At the same time, it is noteworthy that J. B. Say himself never used the phrase “supply creates a corresponding demand”, but it was invented by J. M. Keynes. The latter, obviously, resorted to it in order to refute the main idea of J. B. Say that allegedly only one or another commodity separately can be produced in excess, but never all goods at once. At the same time, according to Keynes, any author who shared “Say's law of markets” 34 is a classic.

Factor theory- bourgeois theory, stating that three main factors interact in the production process: labor, capital and land. Each factor is depicted as an independent source cost. Wages are presented as the price of labor and the only result of the worker's activity in the process of production, thus masking the exploitation of workers.

Profit(often called percent) is depicted either as the result of the productivity of capital, or as a reward for the activity of the capitalist himself. Rent most often declared a gift of nature. Capital identified with means of production and thus perpetuated. The theory in its original form was developed by the vulgar French economist J. B. Say (first half of the 19th century). The fact that the means of production, like labor itself, are necessary elements of any labor process, was used by the proponents of this theory to erroneously assert that these elements are independent sources of value.

In fact, in the production process abstract labor creates new value specific labor transfers the value of the means of production to the new product, using them to create a new use value. Consequently, only the labor of the workers is the source of new value, from which the incomes of the capitalists and landowners are drawn. Under the conditions of modern capitalism, the modification of the theory goes in the following directions: firstly, expanding the range of factors involved in the production process and creating value, including the state, science and “human capital”, which refers to the knowledge, skills and abilities of a person leading to an increase in labor productivity; secondly, the establishment of new relationships between the factors of production (promoting science and "human capital"); thirdly, the use of the theory of factors of production for new apologetic purposes (the statement about the transformation of capitalism into a post-industrial society, where power will pass to scientists); fourthly, the mathematical interpretation of this theory.

The theory of factors of production reflects some real processes of development of production - the strengthening of the role of technical progress, science, education, and the economic role of the state. However, all these new phenomena are interpreted in a distorted way, for the purpose of apologia for capitalism. If in the past the theory of factors was used to disguise capitalist exploitation and negate the antagonistic contradictions of capitalism, now it is also invoked as one of the arguments for the vulgar concept of "transformation of capitalism" (cf. "Transformation of capitalism" theory).

18.1. The evolution of the concepts of factors of production.
18.2. Labor and wages.
18.3. Capital and profit.
18.4. Land and land rent.
18.5. combination of factors of production.

EVOLUTION OF CONCEPTS OF FACTORS OF PRODUCTION

The creation of a variety of goods capable of satisfying the numerous needs of man presupposes production activity, during which the substance of nature is transformed. That which participates in the production process and contributes to the creation of the final product (service) is called a factor of production or an economic resource.

The factor of production can be land, a tractor, an excavator, nails, ore, thread, cotton, electricity, a factory building, a blast furnace, and much more. The production process is impossible without such an important factor as human labor.

Abstracting from the diversity of the natural form of factors of production, they can be grouped into enlarged categories. There are a number of scientific classifications, which will be discussed further.

The most simple and obvious is the division of factors of production into personal and material-material ones, adopted in the theory of Marxism. Of course, personal people with their knowledge, experience and production skills. It is the person who is the initiator, organizer and active participant in the production process. All the rest, namely material resources, are most often called means of production, because with their help a person produces the benefits that interest him. Together, people with their knowledge and experience and the means of production set in motion by them constitute the productive forces of society.

K. Marx also gives a more detailed classification of factors of production. Thus, the means of production are divided by him into objects of labor and means of labor. Objects of labor - this is what human labor is aimed at, which is directly converted into the final product. The objects of labor include: land;

primary objects of labor that are subjected to industrial processing for the first time, for example, ore in a mine;

raw materials, or secondary objects of labor that were previously subjected to industrial processing, for example, already mined and enriched ore that entered the blast furnace.

Means of labor are a continuation of the natural capabilities of man and act as an intermediary between him and the subject of labor. Work tools include:

land (for example, its fertile power affects grain. In addition, land gives any production a place and scope);

tools of labor, or the musculoskeletal system of production, which directly affects the object of labor and transforms it (for example, machines, machine tools, tools);

vascular production system, in particular pipelines, tanks, containers, other containers;

general conditions of production, for example, transport routes, communications, communication.

A somewhat different classification of factors of production was proposed by representatives of English classical political economy. A. Smith and D. Ricardo proceeded from the presence of three types of economic resources: labor, land and capital. At the same time, they understood all natural resources as underground: minerals, forests, rivers, seas, etc. Capital was interpreted as material wealth previously produced by man. Capital primarily includes all the instruments of production and raw materials.

At first glance, the distinction between the classifications proposed by Smith, Ricardo, and Marx is purely formal. Smith and Ricardo separate natural resources from other material factors of production. However, a deeper analysis reveals a number of fundamental differences.

The first difference concerns the treatment of capital. Smith and Ricardo practically identify capital with the means of production and find manifestations of capital wherever only a person forms reserves, hoping to receive income from them in the future. According to Marx's theory, capital exists only under certain socio-historical relations and cannot be identified with any natural material form (see 18.3 for details). The second difference is related to the concept of "work". According to

K. Marx, not labor is a factor of production, but labor power, or the ability to work.

Work force there is a set of nervous, mental, physical forces of a person. Unlike labor power, labor is a function of labor power, realized by the ability to work.

It is noteworthy that in his early writings Marx himself made no distinction between labor and the ability to work. However, in the future, the introduction of the category "labor force" played a fundamental role in the development of the theory of surplus value and the justification of capitalist exploitation (see 18.2 for more details).

Unlike Marx, Smith and Ricardo did not distinguish between the process of producing commodities in their natural form and the process of creating the value of commodities.

As for the question of the distribution of society's income, according to the theory of Marxism, labor force creates not only the equivalent of its own value, which forms the basis of wages, but also surplus value, due to which profit and rent are formed.

The vision of this problem by the classics of English political economy was different. A. Smith believed that “every person who receives his income from a source belonging to him personally should receive it either from his labor, or from his capital, or from his land.” However, at the same time, he emphasized the dominant nature of labor as a source of the wealth of the nation and the basis of the value of goods: “Labor determines the value not only of that part of the price (commodity) that accounts for wages, but also those parts that fall on rent and profit.” In other words, “the worker does not always own the entire product of his labor. In most cases, he must share it with the owner of the capital who employs him.” Also, the worker "must give to the landowner a part of what his labor collects or produces" .

At the beginning of the XIX century. the theories of Smith and Ricardo were largely vulgarized. The productivity theory of factors of production by the French economist J.B. Say. Say's theory is not limited to the allocation of three factors of production. He substantiates the thesis that all factors are equally involved in the formation of value and income in society. Consequently, each factor receives the product of its labor in accordance with its productivity.

The English economists J. Mill and McCulloch "expanded" Say's triune formula. They proposed to extend the concept of "labor" to the functioning of machinery and equipment (labor of capital), to biological processes growth of agricultural plants (labor of nature). From this premise, a logical conclusion is drawn that each factor of production receives income in accordance with its "labor".

According to Clarke's theory, each factor has some marginal productivity, according to which its market price is determined. Realizing the factor of production belonging to him in the resource market, everyone receives his factor income in accordance with the marginal productivity of the factor: the worker receives wages for his labor, the landowner receives land rent, the owner of capital receives profit. Thus, there is no room for exploitation in factor productivity theory. The distribution of income is carried out through market pricing of factors of production in accordance with the principles of equivalent exchange.

Say's theory of factors of production has become widespread in Western economic thought. It is present in one form or another in all Economics textbooks. One of the most important modern additions to this theory is that a special, fourth factor of production is distinguished - entrepreneurial abilities and skills.

Much attention is paid to this factor, in particular, by the famous American economist J.K. Galbraith. Strictly speaking, entrepreneurship can be interpreted as one of the varieties of labor activity in general. However, the allocation of entrepreneurial abilities to an independent category is due to the important and dominant role that entrepreneurship plays in economic life today.

Moreover, now more and more people are talking about the need to highlight several more factors that have acquired great importance. This is primarily an information factor, without which modern production is unthinkable, and, of course, an environmental factor, the importance of which is dictated by the increased reverse effect of production on nature.

It should be noted that not a single economic concept includes money as such, shares, bonds as economic resources. Indeed, neither money nor securities are directly involved in the creation of any product or service. However, in both journalism and Everyday life the identification of money and securities with capital has become commonplace. Capital is no less traditionally associated with economic resources. Thus, the attitude to money and stocks as factors of production, which they are not, is fixed in the mass consciousness.

Smith L. Research on the nature and causes of the wealth of peoples // Anthology of economic classics. T. 1. M.: Ekonov, 1993. S. 122.
There. pp. 120-121.

The classification of factors of production is important not in itself, but in terms of revealing the role of these factors in the production and distribution process. Thus, Marx argued that all factors are equally important for the production of a natural product. However, they play a very different role in the value creation process. Only labor power is capable of creating new value. The means of production can only transfer to the product the value they themselves possess. Unlike Marx, Smith and Ricardo did not distinguish between the process of producing commodities in their natural form and the process of creating the value of commodities. As for the question of the distribution of society's income, according to the theory of Marxism, labor force creates not only the equivalent of its own value, which forms the basis of wages, but also surplus value, due to which profit and rent are formed. The vision of this problem by the classics of English political economy was different. A. Smith believed that "every person who receives his income from a source belonging to him personally, should receive it either from his labor, or from his capital, or from his land." However, at the same time, he emphasized the dominant nature of labor as a source of the nation's wealth and the basis of the cost of goods: "Labor determines the value not only of that part of the price (commodity) that accounts for wages, but also those parts that fall on rent and profit." In other words, "the worker does not always own the entire product of his labor. In most cases he must share it with the owner of the capital who employs him." Also, the worker "must give back to the landowner a part of what his labor collects or produces."

At the beginning of the XIX century. the theories of Smith and Ricardo were largely vulgarized. The productivity theory of factors of production by the French economist J. B. Say has gained particular fame. Say's theory is not limited to the allocation of three factors of production. He substantiates the thesis that all factors are equally involved in the formation of value and income in society. Consequently, each factor receives the product of its labor in accordance with its productivity. The English economists J. Mill and McCulloch "expanded" Say's triune formula. They proposed to extend the concept of "labor" to the functioning of machinery and equipment (labor of capital), to the biological processes of growth of agricultural plants (labor of nature). From this premise, a logical conclusion is drawn that each factor of production receives income in accordance with its "labor".

The theory of factors of production was further developed in the works of the American scientist J. Clark. Clark supplemented Say's theory with the theory of diminishing productivity of factors of production and, on this basis, determined the specific amount of income received by each factor. According to Clarke's theory, each factor has some marginal productivity, according to which its market price is determined. Realizing the factor of production belonging to him in the resource market, everyone receives his factor income in accordance with the marginal productivity of the factor: the worker receives wages for his labor, the landowner receives land rent, the owner of capital receives profit. Thus, there is no room for exploitation in factor productivity theory. The distribution of income is carried out through market pricing of factors of production in accordance with the principles of equivalent exchange. Say's theory of factors of production has become widespread in Western economic thought. In one form or another, it is present in all textbooks "Economics". One of the most important modern additions to this theory is that a special, fourth factor of production is distinguished - entrepreneurial abilities and skills. Much attention is paid to this factor, in particular, by the well-known American economist J. Galbraith. Strictly speaking, entrepreneurship can be interpreted as one of the varieties of labor activity in general. However, the allocation of entrepreneurial abilities to an independent category is due to the important and dominant role that entrepreneurship plays in economic life today. Moreover, now more and more often they talk about the need to highlight several more factors that have acquired great importance. This is primarily an information factor, without which modern production is unthinkable, and, of course, an environmental factor, the importance of which is dictated by the increased reverse effect of production on nature.

It should be noted that not a single economic concept includes money as such, shares, bonds as economic resources. Indeed, neither money nor securities are directly involved in the creation of any product or service. At the same time, both in journalism and in everyday life, the identification of money and securities with capital has become commonplace. Capital is no less traditionally associated with economic resources. Thus, the attitude to money and stocks as factors of production, which they are not, is fixed in the mass consciousness.

Introduction

The study of the theory of factors of production in the framework economic theory

1 The evolution of the concept of factors of production

2 The role and importance of the theory of factors of production within the economic system

The theory of production factors as the basis for the formation of the cost of goods and income distribution

1 Main factors of production

2 The relationship of factors of production and their impact on demand

3 Formation of value and distribution of income to factors of production

Problems of the theory of factors of production in the studies of modern authors

1 Problems of pricing for factors of production according to A. Smith

2 Theory of the ratio of factors of production (the theory of Heckscher-Ohlin)

Conclusion

Introduction

During historical development views on the process social production within the framework of economic theory such concepts as "factor" and "resource" were significantly transformed.

With the advent of a market economy, the nature of relationships in society has changed dramatically. Now the basis of economic development is not so much the possession of traditional material resources As the knowledge of information and the skills of its processing, there is a transformation of the market infrastructure, which is increasingly of an informational nature.

The driving force of the market economy of any state is the needs of the people, which can be satisfied only by receiving income and, therefore, possessing effective demand. No society can exist without the production of material goods. To meet the needs and generate income, the production of economic goods (goods and services) is organized, the sale of which brings income to the producer. But production requires certain resources, which modern economic theory classifies as factors of production.

In economics, factors of production are all that, participating in manufacturing process, creates, makes, produces goods and services. It is important to find out what factors are involved in the production of goods. A factor of production is a particularly important element or object that has a decisive impact on the possibility and effectiveness of production. There are no major or minor factors among the factors. The participation of each of them is equally necessary, and they all complement each other in the production process.

From the foregoing, we can conclude that the factors of production are a kind of basis for a market economy, its basis. From this statement, the special relevance of the topic "follows" term paper: knowledge of the theory of factors of production is fundamental for conducting correct and justified by certain needs economic policy states.

The purpose of the course work is to study the theory of factors of production as the basis for the formation of the cost of goods and the distribution of income.

Objectives of the course work:

Explore the theory of factors of production within the framework of economic theory.

Analyze the factors of production as the basis for the formation of value and distribution of income.

Highlight the problems of the theory of factors of production in the studies of modern authors.

Object of the course work: The role and importance of the formation of the cost of goods and the distribution of income to factors of production.

Subject of the course work: The theory of factors of production as the basis for the formation of the cost of goods and the distribution of income.

The methodological basis for writing the term paper was textbooks, teaching aids and articles by Russian, Kazakh and foreign economists.

During the course work, the following research methods were used: monographic, comparison method, generalization of theoretical material.

STUDY OF THE THEORY OF FACTORS OF PRODUCTION IN THE FRAMEWORK OF ECONOMIC THEORY

1.1 Evolution of the concept of factors of production

The creation of various goods capable of satisfying numerous human needs presupposes production activity, during which the substance of nature is transformed. That which participates in the production process and contributes to the creation of the final product (service) is called a factor of production or an economic resource.

The most simple and obvious is the division of factors of production into personal and material-material ones, adopted in the theory of Marxism. Personal, of course, include people with their knowledge, experience, production skills. It is the person who is the initiator, organizer and active participant in the production process. All the rest, namely material resources, are most often called the means of production, since with their help a person produces the benefits that interest him. Together, people with their knowledge and experience and the means of production set in motion by them constitute the productive forces of society.

K. Marx also gives a more detailed classification of factors of production. Thus, the means of production are divided by him into objects of labor and means of labor. The objects of labor are what is directly converted into the final product [3]. Work items include:

primary objects of labor that are subjected to industrial processing for the first time, for example, ore in a mine;

raw materials, or secondary objects of labor that were previously subjected to industrial processing, for example, already mined and enriched ore that entered the blast furnace.

The means of labor are a continuation of the natural capabilities of man and act as an intermediary between him and the object of labor. Work tools include:

land (for example, its fertile power affects grain. In addition, land gives any production a place and a sphere of activity);

an instrument of labor or a musculoskeletal production system that directly affects the object of labor and transforms it (for example, machines, machine tools, tools);

vascular production system, in particular pipelines, tanks, containers, other containers;

general conditions of production, for example, transport routes, communications, communications.

A somewhat different classification of factors of production was proposed by representatives of English classical political economy. A. Smith and D. Ricardo proceeded from the presence of three types of economic resources: labor, land and capital. At the same time, under the earth they understood all natural resources: minerals, forests, rivers, seas. Capital was interpreted as material wealth previously produced by man. Capital primarily includes all the instruments of production and raw materials.

At first glance, the differences between the classifications proposed by Smith, Ricardo, and Marx are purely formal. Smith and Ricardo separate natural resources from other material factors of production. However, a deeper analysis reveals a number of fundamental differences. The first difference concerns the treatment of capital. Smith and Ricardo practically identify capital with the means of production and find the manifestation of capital wherever only a person forms reserves, hoping to receive income from them in the future. According to Marx's theory, capital exists only in certain socio-historical relations and cannot be identified with any natural-material form. The second difference is with the concept of "labor". According to K. Marx, not labor is a factor of production, but labor power, or the ability to work. Labor power is the totality of the nervous, mental, and physical forces of man. Unlike labor power, labor is not a function of labor power, realized by the ability to work.

It is noteworthy that in his early writings Marx himself made no distinction between labor and the ability to work. However, later the introduction of the category "labor force" played a fundamental role in the development of the theory of surplus value and the justification of capitalist exploitation.

Unlike Marx, Smith and Ricardo did not distinguish between the process of producing commodities in their natural form and the process of creating the value of commodities. As for the question of the distribution of society, then, according to the theory of Marxism, the labor force creates not only the equivalent of its own value, which is the basis of wages, but also surplus value, due to which profit and rent are formed.

The vision of this problem by the classics of English political economy was different. A. Smith believed that "Every person who receives his income from a source belonging to him personally, should receive it either from his labor, or from his capital, or from his land." However, at the same time, he emphasized the dominant nature of labor as a source of the nation's wealth and the basis of the value of goods: "Labor determines the value of not only that part (price) of a commodity that accounts for wages, but also those parts that fall on rent and profit." In other words, “the worker does not always own the entire product of his labor. In most cases, he must share it with the owner of the capital who employs him.” Also, the worker "must give to the landowner a part of what his labor collects or produces" .

In the early 19th century, the theories of Smith and Ricardo were largely vulgarized. The productivity theory of factors of production by the French economist J. B. Say has gained particular fame. Say's theory is not limited to the allocation of three factors of production. He substantiates the thesis that all factors are equally involved in the formation of value and income in society. Therefore, each factor receives the product of its labor in accordance with its productivity.

The English economists J. Mill and McCulloch "expanded" Say's triune formula. They proposed to extend the concept of "labor" to the functioning of machinery and equipment (labor of capital), to the biological processes of growth of agricultural plants (labor of nature). From this premise, a logical conclusion is drawn that each factor of production receives income in accordance with its "labor".

Say's theory of factors of production has become widespread in Western economic thought. In one form or another, it is present in the textbooks "Economics". One of the most important modern additions to this theory is that a special, fourth factor of production stands out - entrepreneurial abilities and skills.

Much attention is paid to this factor, in particular, by the well-known American economist J. Gaybraith. Strictly speaking, entrepreneurship can be interpreted as one of the varieties of labor activity in general. However, the allocation of entrepreneurial abilities to an independent category is due to the important and dominant role that entrepreneurship plays today in economic life.

Thus, we can conclude that the classification of production factors is important in terms of revealing the role of these factors in the production process.

1.2 The role and importance of the theory of factors of production within the economic system

For the implementation of economic activities, a person uses the appropriate resources. The word "resource" means "everything that can be used for management"

All types of resources that are used in the production process are called economic resources or factors of production.

Capital can act in monetary and material form. In monetary form, it is the means by which the entrepreneur purchases raw materials, equipment and other necessary components of the production process. In material form, capital is the means of production that belong to an entrepreneur or firm and can be used to organize the production of goods.

Land is an obligatory component of the production process, since any industrial building, structure, workshop, site must be located on a plot of land. Land plays a special role as a factor of production in agriculture. The results of production in the agricultural sector are affected not only by the amount of land used, but also by the fertility, natural and climatic conditions of a given piece of land.

The connecting element of any production is labor, which combines raw materials, materials and equipment into a single production process. Without the use of labor as a factor of production, the creation of new goods and services would be impossible.

Entrepreneurship is an independent initiative activity for the production of goods and services, associated with risk and aimed at finding options for the most efficient use of resources in order to make a profit.

The functioning of enterprises and households is based on the use of factors of production and the receipt of appropriate 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.

Meanwhile, the market turnover of factors of production 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) and none of them will transfer the right to use this or that resource to other persons free of charge.

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 above classification is flexible. The level and efficiency of production is increasingly influenced by modern science, information and economic factors. The ecological factor of production is gaining importance, which acts either as an impulse for economic growth or as a limitation of its capabilities due to the harmfulness of technology.

Any production can be carried out only with the help of a certain set of interrelated factors, be it land, labor, capital. In real production, all factors interact with each other. For the factors of production cannot help but influence each other, and as a rule, it is through this interaction that they reinforce each other when combined in the proper proportion. Therefore, only their proper combination in a certain ratio can provide the release of an additional product.

In many cases it is possible to find such a combination of factors through a series of trials and experiments, when the output of the marginal product is increased and the costs are correspondingly reduced. Having become convinced of the unsatisfactoriness of the existing combination of factors, one can move on to a fundamentally new combination of them and, in the end, achieve success. Therefore, this approach does not exclude, but rather involves a more complete and comprehensive consideration of the relationship and interaction of production factors with others necessary for the production of products at the lowest cost.

Such interchangeability and quantitative variability are typical for modern production and are associated with the limited resources on the one hand and the efficiency of their use on the other.

Thus, production is a process of combining such factors as capital, labor, land and entrepreneurship in order to obtain new goods and services needed by consumers. Therefore, the movement of the basic elements of production, their appropriation, disposal and use affects deeper social and economic relations.

THE THEORY OF FACTORS OF PRODUCTION AS A BASIS FOR FORMING THE COST OF THE PRODUCT AND INCOME DISTRIBUTION

2.1 Main factors of production

Needs are the objective need of people for something that is objectively necessary to maintain the life and development of the body, the development of the personality, requiring satisfaction. Human needs are varied. In the classification of needs, one can single out needs material and spiritual, rational and irrational, absolute and real, conscious and unconscious, misunderstood, etc. Only when the needs are realized, the motivation to work arises. In this case, the needs take on a specific form - the form of interest. Means of satisfaction of needs are the resource.

The last decades have been characterized by an increase in resource costs and, as a result, a decrease in profitability from their use. Rising prices for land, energy, raw materials, wages. All this leads to a change in the behavior of people and firms in the world economy, encourages them to find substitutes for resources that are becoming more expensive and ways to reduce production costs.

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

The resources involved in the production process are called factors of production. In economic theory, a factor of production is understood as a particularly important element or object that has a decisive impact on the possibility and effectiveness of production. There are a lot of factors that are used to produce a product. Moreover, for the production of each product there is a set of factors. Therefore, it is necessary to classify them, combine them into large groups.

Marxist theory singles out human labor power, the object of labor and the means of labor as factors of production, subdividing them into two large groups: a personal factor of production and a material factor. The personal factor is a labor force, as a combination of physical and spiritual abilities of a person 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 relationship of factors of production, the nature of their connection determine the social orientation of production, the class composition of society and the relationship between classes.

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

Land is considered as a natural factor, as natural wealth and the fundamental basis of economic activity. Here natural conditions stand out from the material factor into a special fund. The term "land" is used in a broad sense of the word. It covers all the utilities that are given by nature in a certain amount and over the supply of which man has no power, whether it be 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. With regard to this factor, we can speak of the law of diminishing returns. This refers to the return in quantitative terms or diminishing returns. A person can influence the fertility of the earth, but this influence is not unlimited. Ceteris paribus, the continuous application of labor and capital to the land, to the extraction of minerals will not be accompanied by a proportional increase in returns.

Labor is represented by the intellectual and physical activity of a person, the totality of the abilities of the individual, due to the general and vocational education, skills and 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.

"Any 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 changeable and has physical and spiritual limits. Man 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 skilled, time for professional training of personnel increases, productivity and labor intensity increase. The intensity of labor is understood as its tension, the increase in the expenditure of physical and mental energy per unit of time. Labor productivity shows how much output 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 goods, 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 diverse, 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 the organization of production. it special kind human capital. Entrepreneurial activity in terms of its scale and results is equated to the cost of highly skilled labor.

An entrepreneur is an essential attribute of a market economy. The concept of "entrepreneur" is often associated with the concept of "owner". According to Cantilom (18th century), an entrepreneur is a person with uncertain, non-fixed income (peasant, craftsman, merchant). He receives other people's goods at a known price, and will sell at a price not yet known to him. A. Smith characterized an entrepreneur as an owner who takes economic risks for the sake of implementing a commercial idea and making a profit. The entrepreneur acts as an intermediary, combining the factors of production at his own discretion.

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

Naturally, all this applies to countries with established market economies. During the transition period to the market, other 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 above classification is mobile. The level and efficiency of production is increasingly influenced by modern science, information and economic factors. The ecological factor of production is gaining importance, which acts either as an impulse for economic growth or as a limitation of 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 the limited resources on the one hand and the efficiency of their use on the other.

In real life, an entrepreneur seeks to find such a combination of production components that ensures the highest 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 moving. Large and small revolutions in engineering, technology, and labor organization are constantly being made in it. The company is constantly looking for the most rational decisions. At the same time, it is necessary to take into account the constant changes in the prices of production resources.

Man is the main factor and goal of social production.

Man has been and always will be the main factor of production. Economic theory in the study of human society proceeds from the fact that a person is both a producer and a consumer of economic goods. It creates, sets in motion and determines the ways of using technology and technology, which, in turn, place new demands on the physical and intellectual capabilities of a person. When progressive means of labor and technologies become widespread, they begin to make increased demands on the worker, to "pull" him up to their level. Hand tools suggest one type of worker, machines - another, a machine tool with software and control of complex automated systems - a third. The world experience of the last decades shows that more than two thirds of large and over seventy percent of all other disasters associated with economic activity occur through the fault of man, with his insufficient preparedness to interact with complex technical systems.

The requirements for the labor force on the part of the means of production and basic technologies are associated with the training of highly qualified, professionally oriented workers, with the level of expenditure of labor force, with the amount of costs for its reproduction. There are examples in history when technical innovation waited for centuries for a new social structure and a new type of worker.

Today, in industrialized countries, along with unemployment, production is experiencing an acute need for highly educated professionals. The growth of requirements for the quality of the worker is a general economic condition for the development of social production.

In the conditions of primitive manual labor, this dependence almost did not reveal itself for centuries and manifested itself through very slow, hardly noticeable changes. With the transition to machine production there was an acceleration of social progress, and the indicated tendency began to show itself with an increase. It operates with particular intensity in the conditions of the scientific and technological revolution. Information technology is becoming the main engine of scientific and technological progress. She turns into a base for everyone the latest technologies, transforms all types of production, plays a leading role in increasing labor productivity, reducing the cost of products.

However, one should not forget that fundamental changes in production, accompanied by shifts in the qualification and professional structure of the population, do not completely eliminate the need for low-skilled labor. Moreover, in a number of cases, such a need is reproduced directly in the very scientific, technological and social progress.

A characteristic feature of the personal factor of production is that a person is not just an element of production, but the main productive force of society. The worker is both the bearer of labor power (and thus a factor of production) and the subject industrial relations. Influencing production, changing it, he thereby changes the entire system of economic relations, changes his own economic behavior. Its role in production can never be understood outside a certain system of social relations. In society, as in production, everything comes from man and everything comes down to him.

Scientific and technological progress becomes a reality not by itself, but thanks to workers who are in certain social conditions. These conditions, or rather, social economic relations, always to a greater or lesser extent orientate towards progress, and may not create proper incentives for it at all. In the second case, society is faced with the need to restructure the system of production relations. The latter determine the direction in the reproduction of the labor force.

From the standpoint of production, man is not only his subject, but also his ultimate goal. The social product, having passed through distribution and exchange, completes its journey in consumption. Satisfaction of human needs, its development is the natural final destination of social production. Any entrepreneur in his economic activity pursues the goal of gaining profit, but this goal will be realized only when there is a buyer (consumer) for the products of his company.

The difference in approaches to the classification of factors of production is: firstly, Marxism proceeds from the fact that the factors of production, as an economic category, determine the social orientation of production. Already in the initial basis of the production process, the class composition of society and the need for class struggle for "justice" are formed. Marginalists, on the other hand, consider factors as general technical and economic elements, without which the production process is unthinkable. Secondly, marginalists understand capital as means and objects of labor, and natural conditions are allocated to a special fund. Marxists combine natural conditions, means of labor and objects of labor into a single material factor. If we are talking about special natural conditions in production, their specificity is taken into account through rent. Thirdly, if marginalists recognize entrepreneurial activity as a factor of production, then Marxists deny it. In general, the difference in the classification of factors is due to the main thing - the class approach to the analysis of natural production.

The above classifications of factors of production are not fixed data forever. In the economic theory of post-industrial society, informational and economic factors are singled out as factors of production. Both are closely related to achievement. modern science, which, in itself, also acts as an independent factor, as it has a decisive impact on the level of production efficiency, the process of preparing a skilled workforce and increasing the level and capabilities of human capital. Information ensures the systematization of knowledge materialized in the system of mechanisms, machines, equipment, management and marketing models. All greater value in modern production acquires an environmental factor of production, which acts either as an impetus for economic growth, or as a limiter of its capabilities due to harmfulness, gas contamination, pollution, etc.

Thus, the process of production of material goods and services requires the functioning of a combination of various factors: land, labor, capital, entrepreneurial activity. These factors correspond to income - rent, wages, interest and entrepreneurial income.

2.2 The relationship of factors of production and their impact on demand

Production is possible only with the introduction of all factors into the production process. The production of a certain product requires a certain set of factors, but the main ones are land, labor and capital. They work interrelatedly and complement each other. The absence of one of them leads to the destruction of the system and makes the production process impossible. Factors are interchangeable. It is due to the various consumer properties of the product. As a result, it is possible to produce any product or good using various factors in various combinations and proportions. The interchangeability of factors is due not only to the specific needs and design features of the product, but also. mainly, limited resources, on the one hand, and the efficiency of their use, on the other. Efficiency today is one of the main characteristics of human activity. It is the most important category of economic science. The simplest idea of economic efficiency can be obtained by comparing the beneficial effect (result) and costs. Increasing efficiency means achieving a reduction in costs per unit of effect (unit of product, volume of production, etc.) or increasing the effect by the same amount of costs (material, financial and labor). Growth in production efficiency requires management in such a way that the volume of finished goods produced increases rapidly, and the total cost per unit of output decreases.

Efficiency in relation to a single economic unit is not identical to efficiency on the scale of society. If an enterprise carries out its activities with the minimum cost of all factors of production, in this case we are talking about production efficiency or the production efficiency of a separate economic unit. Economic efficiency characterizes the effectiveness of all social production. From point of view national economy, such a state will be considered effective, in which the needs of all members of society are most fully satisfied with these limited resources. The economic efficiency of the national economy is a state in which it is impossible to increase the degree of satisfaction of the needs of at least one person without worsening the position of another member of society. This state is called Pareto efficiency (named after the Italian economist V. Pareto). (Picture 1)

Means of production

F С- consumer goods

Figure 1. Graph of the country's production possibilities

The graph of production possibilities (points A, B, C, D,) or transformation, indicates that the economy of full employment is always alternative, i.e. it is necessary to choose between the production of certain products (means of production or commodities) through the redistribution of resources. When resources are fully occupied, all points of possible combinations are on the transformation curve. Any point on the curve means a Pareto efficiency condition. In the option of underutilization of production possibilities or unemployment, the combination of means of production and commodities is not on the curve, but, suppose, at point F. This situation indicates that the use of available additional resources will increase the production of means of production and commodities. Outside the production possibilities curve, at point S, society is not able to simultaneously increase the production of capital goods and consumer goods.

The transformation curve can also illustrate the differences in the production possibilities of individual countries, beyond which the economy cannot escape. The transition to a higher level of the transformation curve is possible as a result of technical discoveries, the development of new mineral deposits, innovations, etc. Society always chooses between accumulation (investment in the financial or real sectors) and consumption (personal). By increasing savings (capital investment in the construction of new plants and factories), society can move to a higher transformation curve in a few years. The amount of one good that must be sacrificed to increase the amount of another good by one unit is called opportunity cost or opportunity cost. The lack of modern interchangeability of resources, and, consequently, an increase in the consumption of available resources when switching from the production of one product to the production of another, causes a decrease in the overall profitability of production. The production possibilities curve illustrates four basic situations:

Resource constraint implies that output combinations located on the outside of the production possibilities curve are not feasible;

the possibility of choice finds expression in the need for society to make a choice of equal achievable combinations of products located on this curve or inside it;

the downward slope of the curve implies the costs of missed opportunities (opportunity costs);

the convexity of the curve shows an increase in opportunity costs and, as a result, a decrease in profitability.

The main economic task is to choose the most efficient variant of the distribution of production factors in order to solve the problem of optimal opportunities, which is due to the unlimited needs of society and limited resources. Any society must find an answer to the questions: - what kind of goods should be produced, and in what quantity? How are these goods and services to be produced? Who will receive and be able to consume (use) these goods and services?

In contrast to the demand for ordinary consumer goods for individual purposes, i.e. final consumption products, the demand for factors of production has its own specifics. A feature, a specific feature of the demand for any factors of production is that it has a derivative, secondary character in comparison with the demand for final consumer goods. The production nature of the demand for factors of production is explained by the fact that the need for them arises only if they can be used to produce end consumer goods that are in demand, i.e. goods or services for ordinary consumer purposes. .

The demand for any factor of production can rise or fall depending on whether the demand for consumer goods made with that factor rises or falls. The demand for factors of production is presented only by entrepreneurs, that is, that part of society that is able to organize and carry out the production of products and services necessary for final consumption. Entrepreneurs seek to discover revenue opportunities not seen by competitors. Factor markets provide entrepreneurs with information about prices, technical and economic characteristics of goods, the level of production costs, and supply volumes.

The organization of the production process requires many factors: labor, land, equipment, raw materials, energy. All of them, to a greater or lesser extent, can be complementary or interchangeable: living labor can be partly replaced by technology, and, conversely, natural raw materials can be replaced by artificial ones. However, labor, technology, and raw materials are interconnected, complementary only in a single production process. Individually, each of them is useless. But ceteris paribus, a change in prices for one of these factors causes a change in the attracted quantity not only of this, but also of the factors of production associated with it. For example, higher wages and relatively low prices for machinery can reduce the demand for labor and increase it for machines that replace labor, and vice versa.

Consequently, the demand for factors of production is an interdependent process, where the volume of each resource involved in production depends on the price level not only for each of them, but also for all other resources and factors associated with it. The market provides information about the price movement for each of them. Price is one of the most important conditions for changing the elasticity of demand for each factor of production. Demand is more elastic for those factors that, other things being equal, have a lower price. This allows for mutual substitution, the displacement of expensive factors of production, and the reduction of production costs. High market prices cause a decrease in demand and its switch to alternative factors of production that have relatively low prices.

The elasticity of demand for each specific factor of production can vary depending on:

the level of income of the company and the demand for its products;

the possibilities of mutual substitution and the resources used in production;

availability of markets for interchangeable and complementary factors of production at affordable prices;

desire for innovation.

In competitive markets, the prices of factors of production are formed under the influence of both supply and demand. The supply of factors of production is the quantity that can be represented on the markets at the current prices.

In factor markets, demand generates supply in the same way as in markets for ordinary consumer goods. However, the markets for factors of production have significant features. Here, the proposal largely depends on the specifics of each specific factor of production as an economic benefit for the implementation of production activities in order to generate income. In general, the peculiarities of the supply are due to the rarity, limited economic resources, primarily such as land, labor, natural resources, raw materials and products of their processing.

Limitedness, rarity of primary economic resources and production factors derived from them is relative. They are rare and limited in comparison with the need for production in them to produce the final goods needed at any given moment. If resources were not limited, they would be free as air, and the various needs of people would be completely satisfied once and for all. The need for markets for any goods would disappear, the economy would not be needed, and no one would think about its need. However, people tirelessly and with interest monitor the indicators of the amount of land suitable for use and the price of this use; the number of labor resources, the level of their employment and wages; quantity of extracted raw materials and prices in this area. Based on these and related indicators, dynamics are revealed, forecasts are made, the structure of production, and sometimes the economy as a whole, is changing. This means that the supply of factors of production is subject to the law of scarcity, limited resources. This is the most important feature of all markets, in particular the supply market of any factor of production.

Markets reveal that the supply of each particular factor of production has a different elasticity. The root cause here is also the law of limitedness, the rarity of resources, although there may be other factors as well. So, for example, the supply of land is most often inelastic, because at any given moment its size is fixed, and there is no alternative resource that replaces land, it is a unique, non-reproducible economic good. Fossil resources of raw materials are also practically non-renewable in time, but their supply is more elastic if alternative, interchangeable, including artificial, types of raw materials and materials are found. The amount of labor resources is also fixed at any given moment and changes rather slowly. But the elasticity of the labor supply of the labor force may depend on the specific economic situation, the realization of full employment opportunities at given incomes and wage levels.

From the point of view of neoclassical theory, people distribute the income received from productive activities among various goods and services that they can purchase on the market. Distribution according to the marginal or marginal analysis occurs so as to obtain the same satisfaction from the last unit of costs for any necessary product.

The will of buyers is expressed in demand, which is transferred to the manufacturer. The motivation of the manufacturer, points out the American economist D. Galbraith, occurs solely due to the prospect of making a profit, which he seeks to maximize over an indefinite period. At first glance, it seems that the modern market is a democratic economic system, because it is based on the will of individual, free consumers who, with their votes, decide on the production of certain goods. However, this impression immediately dissipates if we take into account that the incomes of people are far from the same, and in fact, effective demand ultimately depends on them. The existence of monopolies further distorts the picture, as they greatly reduce demand by raising the price of goods.

In this way,

2.3 Formation of value and distribution of income to factors of production

Behind the factors of production are certain groups of people: behind "labor" - workers, behind "land" - landowners (a private trader or the state does not matter), behind "capital" - its owners, behind "entrepreneurial activity" - production organizers, managers. Each of the groups claims a certain share in the total income: the owner of the labor force receives income in the form of wages, the owner of land - rent, the owner of capital - interest, the entrepreneur - profit from his entrepreneurial activity. What is income for the owner of a production factor acts as an expense, as a cost for the buyer (consumer) of this factor.

In economic theory, income is distinguished as a purely economic concept (at the micro level) and as a national economic concept (at the macro level). If we consider income depending on the subject of appropriation (who receives), then in this case the income is divided:

income of the population;

income of the enterprise (firm);

state revenues;

society's income (national income as a value newly created during the year).

The totality of these incomes determines the maximum demand for goods, services, productive resources.

When analyzing income, enterprises operate with such concepts as gross income, average income, marginal income.

Gross income is equal to the proceeds from the sale of all products in cash. Average revenue is calculated per unit of product sold.

Marginal revenue is the incremental gross revenue from the sale of additional output. It is considered as the ratio of the increase in gross income to the increase in the number of products sold. The calculation of this indicator has for the company importance. The law of diminishing returns operates in the economy and the calculation of marginal income serves as the basis for the enterprise to change production volumes in the direction of increasing or decreasing.

Any entrepreneur in the course of his activity solves two global tasks:

as accurately as possible to determine the socially significant order, its quantitative and qualitative characteristics;

organize the management of the company in such a way as to achieve its goals.

The entrepreneur is always trying to "plan" the market, to reduce uncertainty and risk as much as possible. He is called upon to "feel" the boundary beyond which the profitability of his firm falls. In his managerial activities, the entrepreneur is faced with a situation of falling profitability.

The essence of the law of diminishing returns is that the additionally applied costs of one factor, with a constant number of other factors of production, give an ever smaller volume of additional production and, consequently, gross income. Another result can be obtained with the same and one-time increase in all factors, which can lead to an increase in output and gross income of the enterprise. But even here the entrepreneur is warned of danger; an increase in the supply of goods leads to a decrease in the market price and to a decrease in the proceeds from the sale of a unit of additional output. This is a signal for the enterprise to stop the growth of the scale of production.

The theory of the distribution of income to factors of production and the prices of these factors in competitive markets could be considered rather abstract, especially since it does not consider a purely technical law of input-output. This law forms the basis of the theory of production, or, as it is sometimes called in science, the basis of the "function of production."

But it is precisely the theory of the distribution of income to factors of production and the prices of these factors in competitive markets that gives an answer to the questions of what are the specifics and problems of determining rent on land, wages, and the level of interest on capital assets.

The returns on factors of production and the market prices of each factor are determined by their marginal productivity. The beginning of the theory of the marginal product of any factor of production was considered by D. Ricardo when developing questions of differential rent. In the 1980s, writers such as Clark extended Ricardo's conclusions about rent to other factors of production. According to them, the income and price of any variable factor is determined by the marginal product of this factor. In this sense, the theory of marginal product has become the axis of the theory of pricing for factors of production, more precisely, that side of the pricing process, which is determined by the demand of firms for each specific factor.

J.B. Clark's conclusions boil down to the fact that the market pricing mechanism for factors of production ensures the distribution of income "fairly", since each factor is rewarded depending on its marginal productivity. However, with the scarcity of most factors and their inelastic supply in the markets, the demand and price for them grow, violating the principle of "fair" distribution. In addition, other causes are found in the real economy, such as technological progress. Under its conditions, the marginal productivity of labor increases as a result of the use of more advanced machines. It is obvious that it is also quite problematic to maintain the harmony of the fair remuneration of the marginal product of the worker's labor without taking into account such a factor of production as technology. Clark's idea of the effectiveness of the application of factors meant the need for remuneration, compensation not only for labor, but also for the capital used.

In his work The Distribution of Wealth, Clark proved that his argument was based on the assumption that each unit of factors used in production was equally efficient. In his opinion, with the changing quantitative proportions of the applied labor and capital in the conditions of the growing technical equipment of labor, the principle of "fair wages" was preserved, since its level corresponded to increased labor productivity.

The contradiction of the thesis that the increased productivity of capital also required a "fair" reward was resolved by economics in the idea of the complementarity of factors of production. The idea was that it was necessary to calculate the productivity and marginal product not of each individual factor of production, but in the interaction of all factors.

The complementarity of factors of production remains the leading idea of the representatives of the Austrian economic school, who interpret the marginal product of a factor of production as an increase in consumer satisfaction with products produced as a result of the final increment of one of the factors of production. This is not a strictly defined marginal product of the factor in physical terms, multiplied by the marginal utility delivered to the consumer by additional products. The increment of factors must be expressed in finite units of the good and implies the existence of a kind of "social marginal utility", and that the entrepreneur is imputed to the degree of satisfaction of consumers by the means of production. This clumsy formulation, comments M. Blaug, can be avoided by a simple assumption about the mutual determination of the prices of the final product and the prices of factors of production.

At present, the theory of marginal productivity, on the one hand, has approached the social aspects of the criterion for assessing the "social marginal utility" of production factors. But these incomes are still far from bringing the classical distribution scheme (the theory of the shares of three factors: labor, land and capital) into line with the requirements of modern practice. On the other hand, the theory of marginal utility, which affected the microeconomic aspects of the analysis of the problems of pricing factors of production, determined the criterion for optimizing the demand for factors of production of a competitive firm. This criterion is based on the profit maximization condition achieved by the firm when its marginal costs are equal to the price of the finished product. The remuneration of factors of production and their prices in the market, according to this theory, are determined by the marginal productive productivity of each factor, obtained at the point of minimization of the firm's costs. For example, a worker's wages must correspond to the marginal product of his labor, expressed in monetary terms.

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 market of factors of production, the enterprise acts as a buyer interested in cheaper to buy productive resources (labor, capital, land). All operations are subject to profit. This is the main incentive and the main indicator of the effectiveness of the enterprise.

The value of production costs and their structure determine the specific requirements for the structure of the purchase of factors of production. Features of the demand for factors of production are determined by the nature of the 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 with the help of this 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, that is, the demand depends on the volume of production and prices for factors of production. Equilibrium in the market for factors of production implies an equal income for the increase in any of them.

The general principles for the formation of a demand curve for any factor of production are as follows:

the initial demand is the demand for the manufactured product;

equality of marginal revenue and marginal cost;

a certain program of the enterprise;

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.

The supply of labor, like any other factor, has its own characteristics. They are related:

with the size of the population and, above all, its able-bodied part;

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

length of the working day and working week;

with the correspondence of the professional and qualification structure of the able-bodied population to the needs of the national economic complex in workers of various specialties.

The general level of wages is revealed by the intersection of the supply and demand curve. The growth in demand for labor raises the level of wages and leads to an increase in employment. A fall in the demand for labor has the opposite effect.

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

Therefore, having analyzed the theory of factors of production as a concept of value formation and income distribution, we can say that along with the main factors of production - land, labor and capital, a person is not just an element of production, but the main productive force of society. It affects production, changes the entire system of economic relations. From the standpoint of production, man is not only his subject, but also his ultimate goal. The demand for factors of production is an interdependent process, where the volume of each resource involved in production depends on the price level not only for each of them, but also for all other resources and factors associated with it. The implementation of an effective redistribution of income should be carried out through the development government programs providing for specific measures, primarily in the field of regulating the income of citizens, fair taxation and improving the system of social protection of citizens.

PROBLEMS OF THE THEORY OF FACTORS OF PRODUCTION IN THE STUDIES OF MODERN AUTHORS

3.1 The problem of pricing for factors of production according to A. Smith

The problem of pricing for factors of production is interpreted differently by different economic schools.

Consider, for example, the pricing of production factors according to A. Smith. The methodology and logic of approaches to the analysis of the problems of pricing for factors of production is contained in A. Smith's "Research on the Nature and Causes of the Wealth of Nations". The initial premise is the division of primary economic resources into factors of production such as labor, land and capital.

Any item of final consumption of people is a commodity, the price of which is determined by the labor costs for its production, expressed in working time, skill and talent of the worker. When exchanging a finished product for money, labor or other products, A. Smith notes, in addition to paying the price of materials and the wages of workers, a certain amount of profit must be taken into account for the entrepreneur risking his capital in this business.

The value that laborers add to the value of materials falls into two parts, one of which goes to wages and the other to the capital he has advanced.

Profit on capital is not like wages and is established on a completely different basis. It is determined by the value of the capital employed in the business, and can be greater or less depending on the size of this capital and the efficiency of its use.

Since then, A. Smith continues, as the land has become private property, landowners, like all other people, want to reap where they did not sow, and they begin to demand rent even for the natural fruits of the land. A certain additional price is set for everything that is on earth, for its "natural products" and fossil resources. This part of the payments to the landowner constitutes the ground rent, which is also included in the price of the finished product produced by the use of the land.

Thus, according to A. Smith, the price of each end-use product of people, first of all, comes down to three components of costs: labor, capital and land. If any end-use commodity needs to be more deeply processed, then the part of the price which is due to wages and industrial profits becomes larger in comparison with the part which is due to land rent. The manufacturing industry increases a successive series of profits, and each successive one becomes larger than the previous one, corresponding to the size of the attracted capital.

The first conclusion from what has been said is that the pricing of factors of production, in particular primary resources such as labor, land and capital, is determined by the price of the end products of consumption produced by these factors.

It is this feature that explains the derivative nature of firms' demand for factors of production, the dependence of prices for all types of resources on prices for consumer goods.

The second conclusion is that the pricing of factors of production should be linked to the income of the owners who own these factors.

Any person receives his income from one of the listed factors of production that belong to him personally: either from his labor, or from his capital, or from his land.

The income received from labor is called "wages".

The income received from capital by a person who personally uses it in business is called "profit".

The income received from capital by a person who does not use it for business, but lends it to another person for productive use, is called "interest". It represents the remuneration paid by the borrower to the lender for the profit that he has the opportunity to extract with the help of borrowed capital. The profit belongs to the borrower, but part of it is paid to the lender for the capital provided in the loan.

Income in the form of loan interest is a derivative income paid out of the profit received from the application of the loan taken.

The income received entirely from the land and appropriated by the landowner is called "rent".

Revenues based on the redistribution of taxes collected by the state are ultimately obtained from the same three factors of production. They are the result of the redistribution of wages, profits and rents, which come to employees in the form of salaries; the elderly - in the form of pensions; recipients of various rent payments, social payments and benefits.

The logic of the arguments relating to the question of the relationship between the incomes of various groups of society and prices in the markets for factors of production can also be traced through the movement of prices for consumer goods. Since the price of any of these goods, A. Smith concludes, is reduced to one or another or to all three components of the primary factors of production (labor, land and capital), the price of the entire annual product of society should be reduced to the same three main parts. Its value should also be distributed in the corresponding three forms of primary and secondary income received through redistribution through the tax system. If society's incomes rise, then the demand for factors of production and their price will also rise. Conversely, a decrease in these incomes will cause prices in the factor market to decrease.

The relationships noted above between the price of consumer goods, as well as the income of society and the movement of prices in the markets for factors of production are not so simple and unilinear. Substantiating the position on the market price of goods, A. Smith noted that in every society or every locality there is a usual, or average, rate of both wages and profits for each of the various applications of labor and capital. This norm is governed by the general conditions of society, by the degree of its wealth or poverty, by its stagnation or decline, and by the special nature of this or that application of labor and capital. The same applies to the average rate of rent. These ordinary, or average, norms A. Smith calls "natural norms" of wages, profits, and rents for each particular time and place.

Consequently, the natural price of a commodity is not higher or lower than what is necessary to pay, in accordance with the natural norms, land rent, wages and profits on capital spent for its production (extraction), processing and delivery to the market. The actual price may deviate from the natural price, and may coincide with it at the time of sale on the market. The market price, according to Smith, is determined by the ratio between the quantity of a commodity actually brought to the market and the demand for it by those who are willing to pay its natural price, or the full value of rent, wages, and profits. Payment for the goods is necessary for the goods to be delivered to the market.

Thus, each factor of production brings its own income, which is rewarded to its owner. The study of the experience of pricing factors of production makes it possible to understand patterns and trends, to use the knowledge gained in the formation of the pricing mechanism during the transition of the country's economy to the market. Solving the problem of choice in the economy and determining the boundaries of the production possibilities of society, it is necessary to achieve the most expedient use of limited and rare factors of production. The above arguments of A. Smith present his understanding of the operation of the law of supply and demand, which "manage" not only the markets of consumer goods and services, but also the market of economic resources, factors of production.

3.2 Factor ratio theory (Heckscher-Ohlin theory)

factor production distribution demand

In their theories of absolute and relative advantage, Smith and Ricardo showed how output can be increased if countries specialize in producing with an advantage. They assume that the functioning of the free market will itself lead producers to goods that they can produce with the greatest efficiency, and will force them to abandon unprofitable industries.

Approximately 125 years after the publication of the theories of Smith and Ricardo, two Swedish economists - E. Heckscher and B. Ohlin developed the theory of the ratio of production factors (also called the Heckscher-Ohlin theory), which states that each country exports those goods for the production of which it has relatively abundant factors of production, and imports those goods for the production of which it experiences a relative shortage of factors of production.

Factor ratio theory seems logical when looking at surveys of world production and exports. In countries with a high concentration of population, such as Hong Kong and the Netherlands, land prices are very high, so they, regardless of climate and soil conditions, do not have a developed production of goods that require large land areas (sheep breeding, growing cereals). These products are produced in countries such as Australia and Canada, where land is abundant relative to the population.

When labor is abundant relative to capital, one can expect low wage rates and high export competitiveness of products that require a large labor force relative to capital. Another can be expected with limited labor resources. Thus, India, Iran, and Tunisia stand out for their developed production of hand-knotted carpets, which differ in appearance and technology from carpets made in Great Britain and the United States with machines purchased with cheap capital.

In the middle of the 20th century (1948), American economists P. Samuelson and W. Stolper improved the Heckscher-Ohlin theory by imagining that in the case of homogeneity of factors of production, identity of technology, perfect competition and complete mobility of goods, international exchange equalizes the price of factors of production between countries. The authors base their concept on the D. Ricardo model with additions by Heckscher and Ohlin and consider trade not just as a mutually beneficial exchange, but also as a means to reduce the gap in the level of development between countries.

In the mid-1950s, the American economist V. Leontiev developed the theory of foreign trade in a work known as the Leontief paradox.

Leontief's paradox states that the Heckscher-Ohlin theory of the ratio of factors of production is not confirmed in practice: labor-saturated countries export capital-intensive products, while capital-saturated countries export labor-intensive ones.

Using the Heckscher-Ohlin theory, V. Leontiev showed that the American economy in the postwar period specialized in those types of production that required relatively more labor than capital. This contradicted earlier ideas about the US economy, which, due to excess capital, would have to export mainly capital-intensive goods. Having included in the analysis more than two factors of production, including scientific and technical progress, differences in types of labor (skilled and unskilled) and their differentiated payment in various countries, V. Leontiev explained the above paradox and thus contributed to the theory of comparative advantage.

Let us present the main ideas that were put forward by V. Leontiev himself when explaining the paradox.

V. Leontiev's first explanation is the existence of differences in labor productivity between the US and its trading partners (that is, labor in the US contains more human capital, and therefore is more productive). V. Leontiev's second explanation is that it is necessary to consider not only labor and capital, but also such an important element that determines trade models as the endowment of the country with natural resources. (Thus, the import of crude oil, especially a capital-intensive commodity, requires the simultaneous use of both natural resources and capital in production).

Other attempts to explain the paradox discovered by V. Leontiev are also known.

One of the most plausible explanations is that the Heckscher-Ohlin theory makes the erroneous assumption that the factors of production are homogeneous. The qualifications of the labor force are in fact very different within and across countries, as different people have different training and education. Vocational training and education require capital investments that do not show up in the traditional measures of capital, which include only the cost of structures and equipment. Change in the intensity of factors (as a theoretical possibility), for example, when the relative prices of labor and capital change over time. B.S. Minhas found this phenomenon in 1/3 of the six industries he studied. V.Leontiev in 1964 examined 21 industries and found confirmation of such a possibility only in 8% of cases. And when analyzing two industries that intensively use natural resources, he found confirmation of this hypothesis only for 1% of cases. The existence of trade barriers such as tariffs and quotas. (However, as is known, at that time the purpose of trade barriers was precisely to restrict labor-intensive imports in order to preserve American jobs, which contradicts the revealed pattern) R.I. Baldwin (1971) based on a study of US trade data in 1962. also confirmed that trade barriers cannot fully explain Leontief's paradox.

With some modification of the theory of Heckscher - Ohlin in order to take into account various groups of labor and capital invested in the professional training of these groups, the theory of the ratio of production factors remains in force. If we look at labor not as a homogeneous commodity, but categorize it, we find that the industrialized countries actually have a significant surplus of highly educated (heavily invested) labor over other types of labor. Thus, the exports of industrialized countries reflect a higher proportion of specialists, such as scientists and engineers, therefore, these countries use their excess factors of production. The exports of less developed countries are characterized by high labor intensity of less skilled labor.

Thus, the model with three factors is a further modification and improvement of the Heckscher-Ohlin theory, the inclusion of skilled labor fits into its standard theorem, the principle scheme does not change, the country specializes in the production of goods that require a predominantly excess factor, the economic mechanism that ensures such specialization is the same - equalization of prices for factors of production.

Therefore, having considered the theory of factors of production in the studies of modern authors, some problems can be identified. A. Smith in the question of the relationship between the incomes of various groups of society and prices in the markets for factors of production traces the movement of prices for consumer goods. The price of any commodity is reduced to three components (labor, land, capital), and the price of the entire annual product of society must be reduced to the same three main parts. E. Heckscher and B. Ohlin argued that each country exports those goods for the production of which it has relatively excess production factors, and imports those goods for the production of which it experiences a relative lack of production factors. V.Leontiev, in turn, developed the theory of foreign trade in a work known as "Leontiev's paradox". It says that the Heckscher-Ohlin theory of the ratio of factors of production is not confirmed in practice: labor-saturated countries export capital-intensive products, while capital-saturated countries export labor-intensive ones. The Heckscher-Ohlin theory makes the erroneous assumption that the factors of production are homogeneous.

Conclusion

In the course of the work, all the goals and objectives were achieved. We draw the main conclusions on the sections of the course work.

In the first section, a study was made of the theory of factors of production within the framework of economic theory.

Factor of production (economic resource) - something that participates in the production process and contributes to the creation of the final product (service).

Having studied the theory of factors of production within the framework of economic theory, it is obvious that the opinions of the authors agree that the main factors of production are labor, land and capital. But one of the most important modern additions to this theory is that a fourth factor of production stands out - entrepreneurial abilities and skills. The value of the theory of factors of production within the framework of the economic system is great. Any production can be carried out only with the help of a certain set of interrelated factors. Factors of production influence each other and, as a rule, reinforce each other as a result of such interaction.

Within the framework of economic theory, two theories of factors of production are distinguished: Marxist and marginalist.

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

The difference in the classification of factors is due to the main thing - the class approach to the analysis of natural production.

In addition to factors that directly affect production and economic growth, there are factors that affect them indirectly. These include: first, demand, supply and price in the market of means of production; secondly, the distribution of factors of production, products and services.

The second section analyzes the theory of factors of production as a concept of value formation and income distribution.

The process of production of material goods and services requires the functioning of a combination of various factors: land, labor, capital, entrepreneurial activity. These factors correspond to income - rent, wages, interest and entrepreneurial income.

Along with the main factors of production - land, labor and capital, a person is not just an element of production, but the main productive force of society. It affects production, changes the entire system of economic relations. From the standpoint of production, man is not only his subject, but also his ultimate goal. The demand for factors of production is an interdependent process, where the volume of each resource involved in production depends on the price level not only for each of them, but also for all other resources and factors associated with it.

The third section of the course work is devoted to the problem of the theory of factors of production in the studies of modern authors.

The problem of pricing for factors of production is interpreted differently by different economic schools. Having considered the theory of production factors in the studies of modern authors, some problems can be identified. A. Smith in the question of the relationship between the incomes of various groups of society and prices in the markets for factors of production traces the movement of prices for consumer goods. The price of any commodity is reduced to three components (labor, land, capital), and the price of the entire annual product of society must be reduced to the same three main parts. E. Heckscher and B. Ohlin argued that each country exports those goods for the production of which it has relatively excess production factors, and imports those goods for the production of which it experiences a relative lack of production factors. V.Leontiev, in turn, developed the theory of foreign trade in a work known as "Leontiev's paradox". It says that the Heckscher-Ohlin theory of the ratio of factors of production is not confirmed in practice: labor-saturated countries export capital-intensive products, while capital-saturated countries export labor-intensive ones. The Heckscher-Ohlin theory makes the erroneous assumption that the factors of production are homogeneous.

Having considered the classical theories, we note that their common weakness is numerous restrictions and assumptions. Therefore, economists in the 21st century are searching for new theories based on classical theories, developing or refuting them.

Thus, the issue of choosing models that can be used to describe and predict the development of micro- and macroeconomic situations at the stage of the formation of the economy is of particular importance at the beginning of the 21st century. In modern economic doctrines, the issues of production factors, as the basis for the formation of the cost of goods and the distribution of income, as well as the formation and interaction of various economic mechanisms, are key to the development of the economy.

List of used literature

1. Age V.A. Economic theory / Age V.A.; ed. Kochetkova A.A. - M.: Dashkov i K, 2008

Agureeva O.V., Zamedlina E.A. .Economic theory: tutorial. - M.: Okay-Book, 2011

Amo I.A. Economic theory / Amo I.A.; ed. Arkhipova A.I., Ilyina S.S. - M.: 2006

Antipina O.N., Voshchikova N.K., Kadomtseva S.N. Economic theory. Introductory course. Microeconomics: textbook. - M.: INFA-M, 2008

Borisov E.F. Economic theory. - M.: Higher education, 2006

Brodskaya and others under the total. ed. Vidyapina V.I. Economic theory: textbook. - M.: 2005

Vikulina T.D. Economic theory: a tutorial. - M.: RIOR, 2007

Galperin V.M., Ignatiev S.M., Morgunov V.I. Microeconomics: a textbook for universities, in 3 volumes. - M.: OMEGA-L, 2008

Garasevich L.S. Economic theory. Microeconomics. Macroeconomics. Megaeconomics. - St. Petersburg.: St. Petersburg, 2009

Gromyko V.V., Zhuravleva G.P., Zabelina M.I. Economic theory. Microeconomics-1,2: textbook. - M.: Dashkov and K, 2008

Gukasn G.M. Economic theory. Introduction to economic theory; microeconomics; macroeconomics and others: textbook for universities, 2nd edition. - St. Petersburg.: St. Petersburg, 2007

Dornbusch R., Fischer S. Economics. - M.: INFA-M, 2008

Ignatieva T.V., Nekrasov V.N., Vasiliev G.P., Zalochaevskaya E.Yu., Lozovova L.A., Cherkasova T.P. Economic theory: fundamentals of economic theory, microeconomics, macroeconomics, history economic doctrines. - Rostov-on-Don.: Phoenix, 2010

Economic theory: textbook, ed. Kamaeva V.D. - M.: VLADOS, 2010

Kulikov L.M.Economic theory: textbook. - M.: Velby, 2006

16. Nesterenko G.I. Kim A.A. A series of scientific papers dedicated to the 80th anniversary of the WKGU named after M. Utemisova / Economics; Uralsk, 2012

17. Sazhina M.A., Chibrikov G.G. economic theory: a textbook for universities. - M.: Norma, 2007

Salikhov B.V. Economic theory: textbook. - M.: Dashkov i K, 2007

Course of Economic Theory, ed. Chepurina M.N., Kiseleva E.A. - Kirov.: ASA, 2006

Chernetsova N.S. Economic theory: textbook. - M.: 2009

Shustov V.A. Economic theory. Microeconomics. - M.: 2009