Means of production

In economics and sociology, the means of production (also called capital goods)[1] are physical and non-financial inputs used in the production of economic value. These include raw materials, facilities, machinery and tools used in the production of goods and services.[2][3] In the terminology of classical economics, the means of production are the "factors of production" minus financial and human capital.

For other uses, see Means of production (disambiguation).

The social means of production are capital goods and assets that require organized collective labor effort, as opposed to individual effort, to operate on.[4] The ownership and organization of the social means of production is a key factor in categorizing and defining different types of economic systems.

The means of production includes two broad categories of objects: instruments of labor (tools, factories, infrastructure, etc.) and subjects of labor (natural resources and raw materials). People operate on the subjects of labor using the instruments of labor to create a product; or stated another way, labor acting on the means of production creates a good.[5] In an agrarian society the principal means of production is the soil and the shovel. In an industrial society the means of production become social means of production and include factories and mines. In a knowledge economy, computers and networks are means of production. In a broad sense, the "means of production" also includes the "means of distribution" such as stores, the internet and railroads (Infrastructural capital).[6]

Marxism and Marxist theory of class

The analysis of the technological sophistication of the means of production and how they are owned is a central component in the Marxist theoretical framework of historical materialism and in Marxian economics.

In Marx's work and subsequent developments in Marxist theory, the process of socioeconomic evolution is based on the premise of technological improvements in the means of production. As the level of technology improves with respect to productive capabilities, existing forms of social relations become superfluous and unnecessary, creating contradictions between the level of technology in the means of production on the one hand and the organization of society and its economy on the other. These contradictions manifest themselves in the form of class conflicts, which develop to a point where the existing mode of production becomes unsustainable, either collapsing or being overthrown in a social revolution. The contradictions are resolved by the emergence of a new mode of production based on a different set of social relations including, most notably, different patterns of ownership for the means of production.[7]

Ownership of the means of production and control over the surplus product generated by their operation is the fundamental factor in delineating different modes of production. Capitalism is defined as private ownership and control over the means of production, where the surplus product becomes a source of unearned income for its owners. By contrast, socialism is defined as social ownership of the means of production so that the surplus product accrues to society at large.

Determinant of class

Marx's theory of class defines classes in their relation to their ownership and control of the means of production. In a capitalist society, the bourgeoisie, or the capitalist class, is the class that owns the means of production and derives a passive income from their operation. In contrast, the proletariat, or working class, comprises the majority of the population that lacks access to the means of production and are therefore induced to sell their labor power for a wage or salary to gain access to necessities, goods and services.[8]

To the question of why classes exist in human societies in the first place, Karl Marx offered a historical and scientific explanation that it was the cultural practice of ownership of the means of production that gives rise to them. This explanation differs dramatically from other explanations based on "differences in ability" between individuals or on religious or political affiliations giving rise to castes. This explanation is consistent with the bulk of Marxist theory in which Politics and Religion are seen as mere outgrowths (superstructures) of the basic underlying economic reality of a people.[9]

Related terms

Factors of production are defined by German economist Karl Marx in his book Das Kapital as labor, subjects of labor, and instruments of labor: the term is equivalent to means of production plus labor. The factors of production are often listed in economic writings derived from the classical school as "land, labour and capital". Marx sometimes used the term "productive forces" equivalently with "factors of production"; in Kapital, he uses "factors of production", in his famous Preface to the Critique of Political Economy, he uses "productive forces" (that may depend on the translation).

Production relations (German: Produktionsverhältnis) are the relations humans enter into with each other in using the means of production to produce. Examples of such relations are employer/employee, buyer/seller, the technical division of labour in a factory, and property relations.

Mode of production (German: Produktionsweise) means the dominant way in which production is organised in society. For instance, "capitalism" is the name for the capitalist mode of production in which the means of production are owned privately by a small class (the bourgeoisie) who profits off the labor of the working class (the proletariat). Communism is a mode of production in which the means of production are not owned by anyone, but shared in common, without class based exploitation.

See also

• Capital (economics)
• Clause IV
• Factors of production
• Information revolution
• Gross fixed capital formation
• Nationalization
• Productive forces
• Property
• Private property
• Privatization
• Relations of production
• Socialization (economics)
• Soviet Union

Footnotes

1. Eatwell, John; Milgate, Murray; Newman, Peter (April 19, 1990). Marxian Economics: The New Palgrave. W. W. Norton & Company. p. 76. ISBN 978-0393958607. The conception of capital within orthodox economics. Within orthodox economics, the term ‘capital’ generally refers to the means of production. .
2. James M. Henslin (2002). Essentials of Sociology. Taylor & Francis US. p. 159. ISBN 9780205337132.
3. Oxford Dictionaries. "means of production". Oxford Dictionaries. Retrieved 7 December 2017. the facilities and resources for producing goods.
4. Karl Kautsky (1983). Selected Political Writings. 978-0333283844. p. 9. Here we encounter a further characteristic of the modern wage proletarian. He works not with individual but with social means of production, means of production so extensive that they can be operated only by a society of workers, not by the individual worker.
5. Michael Evans, Karl Marx, London, England, 1975. Part II, Chap. 2, sect. a; p. 63.
6. Flower, B. O. The Arena, Volume 37. The Arena Pub. Co, originally from Princeton University. p. 9
7. Mode of Production. Marxism.org
8. Ishiyama, Breuning, John, Marijke (October 22, 2010). 21st Century Political Science: A Reference Handbook. SAGE Publications, Inc. For Marx, class was defined by an individual’s relationship to the means of production...Class is determined by the extent to which people own most, some, or little of the means of production, or by their relationship to the means of production. It is generally conflict over control or access to the means of production that drives history.
9. Frederick Engels: Socialism: Utopian and Scientific Chapter III Historical Materialism Marx2mao.com. p. 74

References

• Institute of Economics of the Academy of Sciences of the U.S.S.R. (1957). Political Economy: A Textbook. London: Lawrence and Wishart.