Means of production
Encyclopedia
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital
and natural capital
. This includes the classical
factors of production
minus financial capital
and minus human capital
. They include two broad categories of objects: instruments of labour (tools, factories, infrastructure
, etc.) and subjects of labour (natural resources and raw materials). People operate on the subjects of labour, using the instruments of labour, to create a product; or, stated another way, labour acting on the means of production creates a product. When used in the broad sense, the "means of production" includes the "means of distribution" which includes stores, banks, and railroads.
The term can be simply and picturesquely described in an agrarian society as the soil and the shovel; in an industrial society, the mines and the factories.
are defined by Karl Marx
in Das Kapital
as labour, subjects of labour, and instruments of labour; i.e., the term is equivalent to means of production plus labour. 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 Capital, he uses "factors of production," in his famous Preface to the Critique of Political Economy, he uses "productive forces" (note that this is in the English versions and may depend on the translation.)
Production relations (Marx: 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
(Marx: Produktionsweise)
(In political context) - the facilities and resources for producing goods.
Study of how people take over other governments using force and violence, not talks and agreements.
. Marx argued that, while in pre-capitalist societies it is clearly the labourer that uses the means of production to create product; in capitalism, whose nature as a mode of production
is embodied in its drive to reproduce
and increase capital, it is more realistic to say that the means of production uses the labourer.
The idea of factors of production is typically used as an explanation for income as duly paid to owners of each means of production and also to the workers themselves within capitalism
. By comparison, the term means of production applies to these means independent of their ownership and their compensation, and regardless of whether the mode of production is capitalist, feudal
, slave, communal, or otherwise.
To the question of why classes exist in human societies in the first place, Karl Marx
offered an historical 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. To remain consistent with these principles, an explanation as to why classes exist in a society must be derived from causes that are essentially economic in nature, and must appeal to the alleged underlying reality of material production.
There are two subtle but important points to the Ownership of the Means of Production. The first being that owning the Means of Production is not the same thing as owning physical property, nor is it equal to owning money. Rather OMP refers to a cultural practice in which a few individuals within a larger corporation (or company) control and decide what is done with the entire profit created by that corporation.
The conclusion ultimately reached is that while the "owners" of a corporation only contribute a tiny fraction of the total labor and time in creating profit, they have complete control over that profit and how it is used. The practice of OMP in human societies is then a type of game where some people are labeled owners (Marx used the term, Bourgeoisie
) and other people are labeled workers (Marx used the term, Proletariat
). The bourgeoisie have complete control over both how the proletariat are paid in wages and complete control over how the profit from production is used, thus giving rise to a class division.
Contrarian interpretations of this practice might state that wages paid to workers are subsumed under the regular costs of maintaining business. However, Marx considered it a reification
to treat labor as just another "factor" in production; it implied an inversion of means and ends, so that people were effectively used as things.
Marx's terms are often employed in economic analysis by socialists
who advocate public ownership
of some or all of the means of production. The affinity between labor movement causes and this advocacy is very strong - and often shared by social democrats
, socialists
, communists
and greens
. Marxists define economic system
s in terms of how the means of production are used, and which social class
controls them. Thus, in capitalism, the means of production are controlled by the bourgeoisie
, (the "capitalists" - the owners of capital). In the pure ideal of upper-stage socialism
(see: Pure communism), such as that "communism" was/is supposed to be, the MoP are controlled by the workers production cooperative associations directly. In fact this situation has only been historically realized temporarily such as in the Israeli kibbutz
or the early Soviets before the entrenchment of the communist party as a "New Class
", or in isolated or preliminary form such as in the final phase of the Second Spanish Republic
, or various experimental utopian communities; although in embryonic form.
Infrastructural capital
Public capital is the aggregate body of government-owned assets that are used as the means for private productivity. Such assets span a wide range including: large components such as highways, airports, roads, transit systems, and railways; local, municipal components such as public education,...
and natural capital
Natural capital
Natural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...
. This includes the classical
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....
factors of production
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
minus financial capital
Financial capital
Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
and minus human capital
Human capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...
. They include two broad categories of objects: instruments of labour (tools, factories, infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
, etc.) and subjects of labour (natural resources and raw materials). People operate on the subjects of labour, using the instruments of labour, to create a product; or, stated another way, labour acting on the means of production creates a product. When used in the broad sense, the "means of production" includes the "means of distribution" which includes stores, banks, and railroads.
The term can be simply and picturesquely described in an agrarian society as the soil and the shovel; in an industrial society, the mines and the factories.
Related terms
Factors of productionFactors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
are defined by Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
in Das Kapital
Das Kapital
Das Kapital, Kritik der politischen Ökonomie , by Karl Marx, is a critical analysis of capitalism as political economy, meant to reveal the economic laws of the capitalist mode of production, and how it was the precursor of the socialist mode of production.- Themes :In Capital: Critique of...
as labour, subjects of labour, and instruments of labour; i.e., the term is equivalent to means of production plus labour. The factors of production are often listed in economic writings derived from the classical school
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....
as "land, labour and capital". Marx sometimes used the term "productive forces" equivalently with "factors of production;" in Capital, he uses "factors of production," in his famous Preface to the Critique of Political Economy, he uses "productive forces" (note that this is in the English versions and may depend on the translation.)
Production relations (Marx: 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
Mode of production
In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...
(Marx: Produktionsweise)
(In political context) - the facilities and resources for producing goods.
Study of how people take over other governments using force and violence, not talks and agreements.
Marxist analysis of ownership of MoP within capitalism
The analysis of people's relationships with the means of production is one element that stands at the basis of MarxismMarxism
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
. Marx argued that, while in pre-capitalist societies it is clearly the labourer that uses the means of production to create product; in capitalism, whose nature as a mode of production
Mode of production
In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...
is embodied in its drive to reproduce
Reproduction (economics)
In Marxian economics, economic reproduction refers to recurrent processes by which the initial conditions necessary for economic activity to occur are constantly re-created...
and increase capital, it is more realistic to say that the means of production uses the labourer.
The idea of factors of production is typically used as an explanation for income as duly paid to owners of each means of production and also to the workers themselves within capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
. By comparison, the term means of production applies to these means independent of their ownership and their compensation, and regardless of whether the mode of production is capitalist, feudal
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
, slave, communal, or otherwise.
To the question of why classes exist in human societies in the first place, Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
offered an historical 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. To remain consistent with these principles, an explanation as to why classes exist in a society must be derived from causes that are essentially economic in nature, and must appeal to the alleged underlying reality of material production.
There are two subtle but important points to the Ownership of the Means of Production. The first being that owning the Means of Production is not the same thing as owning physical property, nor is it equal to owning money. Rather OMP refers to a cultural practice in which a few individuals within a larger corporation (or company) control and decide what is done with the entire profit created by that corporation.
The conclusion ultimately reached is that while the "owners" of a corporation only contribute a tiny fraction of the total labor and time in creating profit, they have complete control over that profit and how it is used. The practice of OMP in human societies is then a type of game where some people are labeled owners (Marx used the term, Bourgeoisie
Bourgeoisie
In sociology and political science, bourgeoisie describes a range of groups across history. In the Western world, between the late 18th century and the present day, the bourgeoisie is a social class "characterized by their ownership of capital and their related culture." A member of the...
) and other people are labeled workers (Marx used the term, Proletariat
Proletariat
The proletariat is a term used to identify a lower social class, usually the working class; a member of such a class is proletarian...
). The bourgeoisie have complete control over both how the proletariat are paid in wages and complete control over how the profit from production is used, thus giving rise to a class division.
Contrarian interpretations of this practice might state that wages paid to workers are subsumed under the regular costs of maintaining business. However, Marx considered it a reification
Reification (Marxism)
Reification or Versachlichung, literally "objectification" or regarding something as a separate business matter) is the consideration of an abstraction, relation or object as if they had human or living existence and abilities, when in reality they do not...
to treat labor as just another "factor" in production; it implied an inversion of means and ends, so that people were effectively used as things.
Marx's terms are often employed in economic analysis by socialists
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
who advocate public ownership
Public property
Public property is property, which is dedicated to the use of the public. It is a subset of state property. The term may be used either to describe the use to which the property is put, or to describe the character of its ownership...
of some or all of the means of production. The affinity between labor movement causes and this advocacy is very strong - and often shared by social democrats
Social democracy
Social democracy is a political ideology of the center-left on the political spectrum. Social democracy is officially a form of evolutionary reformist socialism. It supports class collaboration as the course to achieve socialism...
, socialists
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
, communists
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
and greens
Green Movement
The Green Movement refers to a series of actions after the 2009 Iranian presidential election, in which protesters demanded the removal of Mahmoud Ahmadinejad from office...
. Marxists define economic system
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
s in terms of how the means of production are used, and which social class
Social class
Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...
controls them. Thus, in capitalism, the means of production are controlled by the bourgeoisie
Bourgeoisie
In sociology and political science, bourgeoisie describes a range of groups across history. In the Western world, between the late 18th century and the present day, the bourgeoisie is a social class "characterized by their ownership of capital and their related culture." A member of the...
, (the "capitalists" - the owners of capital). In the pure ideal of upper-stage socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
(see: Pure communism), such as that "communism" was/is supposed to be, the MoP are controlled by the workers production cooperative associations directly. In fact this situation has only been historically realized temporarily such as in the Israeli kibbutz
Kibbutz
A kibbutz is a collective community in Israel that was traditionally based on agriculture. Today, farming has been partly supplanted by other economic branches, including industrial plants and high-tech enterprises. Kibbutzim began as utopian communities, a combination of socialism and Zionism...
or the early Soviets before the entrenchment of the communist party as a "New Class
New class
The "New Class" model, as a theory of new social groups in post-industrial societies, gained ascendency during the 1970s as social and political scientists noted how "New Class" groups were shaped by post-material orientations in their pursuit of political and social goals...
", or in isolated or preliminary form such as in the final phase of the Second Spanish Republic
Second Spanish Republic
The Second Spanish Republic was the government of Spain between April 14 1931, and its destruction by a military rebellion, led by General Francisco Franco....
, or various experimental utopian communities; although in embryonic form.
See also
- Clause IVClause IVClause IV historically refers to part of the 1918 text of the British Labour Party constitution which set out the aims and values of the party. Before its revision in 1995, its application was the subject of considerable dispute.-Text:...
- DistributismDistributismDistributism is a third-way economic philosophy formulated by such Catholic thinkers as G. K...
- Factors of productionFactors of productionIn economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
- Information revolution
- gross fixed capital formationGross fixed capital formationGross fixed capital formation is a macroeconomic concept used in official national accounts such as the UNSNA, NIPAs and the European System of Accounts . The concept dates back to the NBER studies of Simon Kuznets of capital formation in the 1930s, and standard measures for it were adopted in the...
- Mode of productionMode of productionIn the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...
- MarxismMarxismMarxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
- NationalizationNationalizationNationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
- Productive forcesProductive forcesProductive forces, "productive powers" or "forces of production" [in German, Produktivkräfte] is a central idea in Marxism and historical materialism....
- propertyPropertyProperty is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
- Private propertyPrivate propertyPrivate property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
- PrivatizationPrivatizationPrivatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
- Relations of productionRelations of productionRelations of production is a concept frequently used by Karl Marx and Friedrich Engels in their theory of historical materialism, and in Das Kapital...
- Socialization (economics)Socialization (economics)In economic discourse, socialization has several different but related connotations. In socialist economics, the term usually refers to the process whereby production is reorganized away from producing for private profit to producing goods and services directly for use, along with the end of the...