Misplaced Pages

Part of a series on
Economics
History Outline Index
Branches and classifications Applied Econometrics Heterodox International Micro / Macro Mainstream Mathematical Methodology Political JEL classification codes
Concepts, theory and techniques Economic systems Economic growth Market National accounting Experimental economics Computational economics Game theory Operations research Middle income trap Industrial complex
By application Agricultural Behavioral Business Cultural Democracy Demographic Development Digitization Ecological Education Engineering Environmental Evolutionary Expeditionary Feminist Financial Geographical Happiness Health Historical Humanistic Industrial organization Information Institutional Knowledge Labour Law Managerial Monetary Natural resource Organizational Participation Personnel Planning Policy Public Public choice / Social choice theory Regional Rural Service Socio Sociological Solidarity Statistics Urban Welfare
Notable economists de Mandeville Quesnay Smith Malthus Say Ricardo von Thünen List Bastiat Cournot Mill Gossen Marx Walras Jevons George Menger Marshall Edgeworth Clark Pareto von Böhm-Bawerk von Wieser Veblen Fisher Pigou Heckscher von Mises Schumpeter Keynes Knight Polanyi Frisch Sraffa Myrdal Hayek Kalecki Röpke Kuznets Tinbergen Robinson von Neumann Hicks Lange Leontief Galbraith Koopmans Schumacher Friedman Samuelson Simon Buchanan Arrow Baumol Solow Rothbard Greenspan Sowell Becker Ostrom Sen Lucas Stiglitz Thaler Hoppe Krugman Piketty more
Lists Glossary Economists Publications (journals) Schools
Business portal Money portal
v t e

In political philosophy, the means of production refers to the generally necessary assets and resources that enable a society to engage in production. While the exact resources encompassed in the term may vary, it is widely agreed to include the classical factors of production (land, labour, and capital) as well as the general infrastructure and capital goods necessary to reproduce stable levels of productivity. It can also be used as an abbreviation of the "means of production and distribution" which additionally includes the logistical distribution and delivery of products, generally through distributors; or as an abbreviation of the "means of production, distribution, and exchange" which further includes the exchange of distributed products, generally to consumers.

The concept of "Means of Production" is used by researchers in various fields of study — including politics, economics, and sociology — to discuss, broadly, the relationship between anything that can have productive use, its ownership, and the constituent social parts needed to produce it.

Industrial production

From the perspective of a firm, a firm uses its capital goods, which are also known as tangible assets as they are physical in nature. Unfinished goods are transformed into products and services in the production process. Even if capital goods are not traded on the market as consumer goods, they can be valued as long as capital goods are produced commodities, which are required for production. The total values of capital goods constitute the capital value.

The social means of production are capital goods and assets that require organized collective labor effort, as opposed to individual effort, to operate on. 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. 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.

Knowledge production

In a knowledge economy, learning, research, development, innovation, ideas and creativity are the means of production; communication such as books, articles, videos disseminated both physically and digitally over the Internet are a means of distribution. In a broad sense, the "means of production" also includes the "means of distribution" such as stores, the internet and railroads (Infrastructural capital).

Depreciation

The means of production of the firm may depreciate, which means there is a loss in the economic value of capital goods or tangible assets (e.g. machinery, factory equipment) due to wear and tear, and aging. This is known as the depreciation of capital goods.

Marxism and Marxist theory of class

Part of a series on the
Marxian critique of political economy
Concepts Capitalist mode of production Capital Commodity Concrete and abstract labour Critique of political economy Means of production Mode of production Productive forces Relations of production Socially necessary labour time Socialization Wage labour Wage slavery Wertkritik Wertabspaltungskritik Value-form
Topics Crisis theory Imperialism Historical materialism Technological unemployment Falling profit-rate tendency
Works Outlines of a Critique of Political Economy Economic and Philosophical Manuscripts of 1844 Wage Labour and Capital A Contribution to the Critique of Political Economy Grundrisse Das Kapital Theories of Surplus Value Value, Price and Profit
People Karl Marx Friedrich Engels Paul Lafargue Roman Rosdolsky Étienne Balibar Robert Kurz Mark Fisher Claus Peter Ortlieb Geoff Pilling Moishe Postone NML: Hans-Georg Backhaus Helmut Reichelt Hans-Jürgen Krahl
Journals Monthly Review New School Economic Review Crisis and Critique Historical Materialism Socialist register Capital & Class
Related topics Critique of political economy Economics Marxist sociology
Socialism portal
v t e

Part of a series on
Marxism
Theoretical works Economic and Philosophic Manuscripts of 1844 The Condition of the Working Class in England The German Ideology The Communist Manifesto The Eighteenth Brumaire of Louis Bonaparte Grundrisse Capital Critique of the Gotha Programme Dialectics of Nature The Origin of the Family, Private Property and the State What Is to Be Done? The Accumulation of Capital Philosophical Notebooks Terrorism and Communism The State and Revolution Essays on Marx's Theory of Value History and Class Consciousness Prison Notebooks The Black Jacobins On Practice Theses on the Philosophy of History Dialectic of Enlightenment A Critique of Soviet Economics The Long Revolution Guerrilla Warfare The Wretched of the Earth Reading Capital The Society of the Spectacle Pedagogy of the Oppressed Ideology and Ideological State Apparatuses Ways of Seeing How Europe Underdeveloped Africa Social Justice and the City Women, Race and Class Marxism and the Oppression of Women Imagined Communities Hegemony and Socialist Strategy The Sublime Object of Ideology Time, Labor and Social Domination The Age of Extremes The Origin of Capitalism Empire Late Victorian Holocausts Change the World Without Taking Power Caliban and the Witch An Introduction to the Three Volumes of Karl Marx's Capital Capitalist Realism Capital in the Anthropocene Towards Socialism or Capitalism? The Revolution Betrayed Literature and Revolution The Struggle Against Fascism in Germany Their Morals and Ours: The class foundations of moral practice
Philosophy Alienation Dialectical materialism Ideology Philosophy of nature Philosophy in the Soviet Union Reification Marxist ethics
Critique of political economy Capital (accumulation) Crisis theory Commodity Concrete and abstract labor Factors of production Falling profit-rate tendency Means of production Mode of production Capitalist Socialist Productive forces Scientific socialism Surplus product Socially necessary labour time Value-form Wage labour
Sociology Base and superstructure Bourgeoisie Class Class consciousness Classless society Commodity fetishism Communist society Critical theory Cultural hegemony Democracy Dictatorship of the proletariat Soviet Radical Democratic centralism Exploitation False consciousness Human nature Immiseration Imperialism Lumpenproletariat Metabolic rift Proletariat Private property Relations of production State theory Working class
History Class struggle Historical determinism Primitive accumulation Proletarian revolution World revolution Theory of historical trajectory
Aspects Aesthetics Archaeology Criminology Cultural analysis Cultural Studies Ethics Film theory Geography Historiography Literary criticism Marxism and religion Sociology Philosophy
Common variants Structural Autonomist Marxism–Leninism Guevarism Maoism Titoism Trotskyism Neo-Gramscianism Regulation school Third-worldist Hegelian Budapest School Frankfurt School Humanist Neue Marx-Lektüre Open Political Praxis School Both Black Classical Communization Feminist Leninism Neo Post Western
Other variants Analytical Austromarxism Centrist Council communism Eurocommunism Instrumental Marxism–Leninism–Maoism Nkrumaism Orthodox Revisionist Situationist Socialism with Chinese characteristics Wertkritik
People Marx Engels Morris Lafargue Rubin Kautsky Plekhanov Du Bois Connolly Lenin Luxemburg Liebknecht Kollontai Bogdanov Stalin Trotsky Grossman Zinoviev Bloch Lukács Korsch Bukharin Ho Serge Gramsci Galiev Pashukanis Bordiga Benjamin Mao Basu Mariátegui Horkheimer Dutt Brecht Marcuse Kalecki Fromm Cox Lefebvre James Adorno Padmore Sartre Deutscher Hoxha Beauvoir Sombart Nkrumah Sweezy Emmanuel Hill Bettelheim Draper Jones Hobsbawm Althusser Hinton Williams Freire Mandel Sivanandan Miliband Cabral Thompson Bauman Fanon Kosik Berger Castro Guevara Liebman Heller Guattari Mészáros O'Connor Wallerstein Mies Tronti Debord Amin Hall Nairn Parenti Negri Jameson Gonzalo Dussel Harvey Laclau Bahro Poulantzas Vattimo Badiou Harnecker Altvater Anderson Löwy Vogel Sison Easthope Rancière Berman Przeworski Cohen Therborn Losurdo Ture Postone Rodney Bannerji Spivak Newton Sakai Wood Federici Wolff Balibar Eagleton Kurz Hartsock Rowbotham Mouffe Geras Brenner Davis Massey Cleaver Bishop Haraway Panitch Clarke Jessop Davis Wright Fraser Burawoy Holloway Rose Screpanti Tamás Hampton Cano Žižek Berardi Sankara Hennessy McDonnell Douzinas Roediger Foster West Ghandy Marcos Heinrich Prashad Kelley Dean Lordon Linera Fisher Li Coulthard Malm Seymour Toscano Bhattacharya Moufawad-Paul Srnicek Horvat Hamza Saito
Journals Antipode Capital & Class Capitalism Nature Socialism Constellations Critique: Journal of Socialist Theory Historical Materialism Mediations Monthly Review New Left Review Race & Class Rethinking Marxism Science & Society Socialist Register
Related topics 21st-century communist theorists Anarchism Creative destruction Conflict theory Criticism of Marxism Communism Communalism Economic determinism History of communism Left-wing politics Marxian economics New Left Old Left Municipalism Political ecology Socialism Authoritarian Democratic Market Reformist Revolutionary Social Utopian Left-wing populism Universal class Vulgar Marxism Economism Worker cooperative Workers' council
Outline Communism portal Philosophy portal Socialism portal
v t e

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 Marx's critique of political economy, and later 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 as the advancement of technology integrated within the means of production contradicts the established organization of society and its economy.

The increasing efficiency of the means of production via the creation and adaptation of new technologies over time has a tendency to rearrange local and global market structures, leading to the disruption of existing profit pools, creating the possibility of massive economic impact. Disruptive technologies can lead to the devaluation of various forms of labor power, up to the point of making human labor power economically noncompetitive in certain applications, potentially widening income inequality.

According to Marx, escalating tension between the upper and lower class is a major consequence of technology decreasing the value of labor force and the contradictory effect an evolving means of production has on established social and economic systems. Marx believed increasing inequality between the upper and lower classes acts as a major catalyst of class conflicts, which develop to a point where the existing mode of production inevitably becomes unsustainable, either collapsing or being overthrown in a social revolution, at which point the contradictory relationship between technological advancement and the value of labor force is 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.

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. Under this system, profit-seeking individuals or organizations undertake a majority of economic activities. However, capitalism does not indicate all material means of production are privately owned as partial economies are publicly owned.

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. Examples of the capitalist class include business owners, shareholders and the minority of people who own factories, machinery and lands. Countries considered as the capitalist countries include Australia, Canada, the U.S., and other nations which hold a free market economy. In modern society, small business owners, minority shareholders and other smaller capitalists are considered as Petite bourgeoisie according to Marx's theory, which is distinct from bourgeoisie and proletariat as they can buy the labour of others but also work along with employees.

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 labour power for a wage or salary to gain access to necessities, goods and services.

According to Marx, wages and salaries are considered as the price of labour power, related to working hours or outputs produced by the labour force. At the company level, an employee does not control and own the means of production in a capitalist mode of production. Instead, an employee is performing specific duties under a contract of employment, working for wages or salaries. As for firms and profit-seeking organizations, from a personnel economics perspective, to maximize efficiency and productivity there must be an equilibrium between labour markets and product markets. In human resource practices, compensation structure tends to shift towards pay-for-performance bonus or incentive pay rather than base salary to attract the right workers, even if conflicts of interest exist in an employer-worker relationship.

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.

Related terms

Factors of production are defined by German philosopher 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 his Critique of Political Economy: A Contribution 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. Besides capitalism and communism, there is another mode of production which is called a Mixed Economic System. In a mixed economy, private ownership of capital goods are protected and a certain level of the market economy is allowed. However, the government has the right to intervene in the market and economic activities for social objectives. Different from the pure capitalism, the government regulation exists to control particular means of production over the private business sector. Different from communism, the majority of means of production are privately owned rather than shared in common.

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)

Footnotes

1. Gould, Peter; Olsson, Gunnar, eds. (1977). A Search for Common Ground. London: Pion. p. 215. ISBN 9780850860931. Retrieved 8 April 2023. Hindess and Hirst (1977, page 65) define means of production as 'all the conditions necessary to the operation of a particular labour process which are combined in the units of production in which that process takes place' .
2. Edmundson, William A. (2020). "What Are "The Means of Production"?*". Journal of Political Philosophy. 28 (4): 422–423. doi:10.1111/jopp.12211. ISSN 1467-9760. S2CID 212948343. It takes the means of production to comprise anything that is or can be put to productive use... the means of production consist of anything that enables or could enable the extraction of surplus value (exploitation). Similarly, for Proudhon, goods not meant for immediate consumption, whose accumulation might introduce social inequality
3. Marx, Karl; Dobb, Maurice (1971). A contribution to the critique of political economy. London: Lawrence and Wishart. Archived at marxists.org
4. 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.
5. Tuovila, Alicia. "Capital Goods Definition". Investopedia. Retrieved 2021-04-24.
6. Hennings, K. H. (1987), Palgrave Macmillan (ed.), "Capital as a Factor of Production", The New Palgrave Dictionary of Economics, London: Palgrave Macmillan UK, pp. 1–11, doi:10.1057/978-1-349-95121-5_20-1, ISBN 978-1-349-95121-5, retrieved 2021-04-24
7. 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 the 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.
8. Michael Evans, Karl Marx, London, England, 1975. Part II, Chap. 2, sect. a; p. 63.
9. Flower, B. O. The Arena, Volume 37. The Arena Pub. Co, originally from Princeton University. p. 9
10. Black, John (2017). A dictionary of economics. Nigar Hashimzade, Gareth D. Myles (5 ed.). . ISBN 978-0-19-181994-0. OCLC 970401192.{{cite book}}: CS1 maint: location missing publisher (link)
11. James, Manyika (2013). "Disruptive technologies: Advances that will transform life, business, and the global economy" (PDF). www.mckinsey.com. Archived (PDF) from the original on 2020-07-22. Retrieved 2021-04-25.
12. Mode of Production. Marxism.org
13. Black, John (2017). Capitalism--A dictionary of economics. Nigar Hashimzade, Gareth D. Myles (5 ed.). . ISBN 978-0-19-181994-0. OCLC 970401192.{{cite book}}: CS1 maint: location missing publisher (link)
14. Black, Jeremy; Brewer, Paul; Shaw, Anthony; Chandler, Malcolm; Cheshire, Gerard; Cranfield, Ingrid; Ralph Lewis, Brenda; Sutherland, Joe; Vint, Robert (2003). World History. Bath, Somerset: Parragon Books. p. 343. ISBN 0-75258-227-5.
15. 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 generally conflicts over control or access to the means of production that drives history.{{cite book}}: CS1 maint: multiple names: authors list (link)
16. Black, John (2017). Employee--A dictionary of economics. Nigar Hashimzade, Gareth D. Myles (5 ed.). . ISBN 978-0-19-181994-0. OCLC 970401192.{{cite book}}: CS1 maint: location missing publisher (link)
17. Lazear, Edward P.; Shaw, Kathryn L. (2007). "Personnel Economics: The Economist's View of Human Resources". The Journal of Economic Perspectives. 21 (4): 91–114. doi:10.1257/jep.21.4.91. ISSN 0895-3309. JSTOR 30033753.
18. Frederick Engels: Socialism: Utopian and Scientific Chapter III Historical Materialism Marx2mao.com. p. 74
19. Investopedia Staff. "Mixed Economic System Definition". Investopedia. Retrieved 2021-04-25.

Nolan P. K Lenski 2009

References

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

• Marxist terminology
• Communism
• Socialism
• Capitalism
• Marxian economics
• Production economics
• Labour economics
• Capital (economics)
• Factors of production