Capital as a factor of production.

Capital(from Mam.Capitalis - main) as a factor of production. Defining capital in this way, many economists identify it with the means of production. Capital in a broad sense, according to other economists, is the accumulated (aggregate) amount of goods, property, assets used to obtain profit, wealth. It is believed that capital consists of durable goods created by the economic system for the production of other goods.

Another view of capital is associated with its monetary form. “Capital, when embodied in not yet invested finance, is a sum of money.” The shortest definition of capital was given by Karl Marx (1818-1883): “it is a self-increasing value”. Outwardly, capital appears in specific forms: in the means of production (constant capital), in money (money capital), in people (variable capital), in goods (commodity capital). All these definitions have a common idea, namely: capital is characterized by the ability to generate income. So, we can state the following definition: capital in the interpretation of modern economic theory is one of the four main factors of production created by the economic system itself, represented by all the means and resource possibilities of production that are created by people in order to with their help to produce other goods and services.

Economists distinguish between three types of capital:

1) physical, or basic;

2) negotiable;

3) human.

Physical capital is capital materialized in buildings, machine tools and equipment that has been functioning in the production process for several years. Another type of capital, including raw materials, materials, energy resources, is spent in one production cycle. It is called working capital. The money spent on working capital is fully returned to the entrepreneur after the sale of the product. Fixed capital costs cannot be recovered so quickly. Human capital arises as a result of education, training and the maintenance of physical health.

History shows that, thanks to the development of tools of labor, labor was replaced by capital and the overall productivity of labor increased, when manual labor based on the use of simple tools of labor began to be replaced by mechanized labor based on the use of machines as the main tools of labor. From the middle of the XX century. machines began to be supplemented and even supplanted by automatic machines capable of replacing part of mental labor.

Entrepreneurship as a factor of production.

Entrepreneurship as a factor of production. Entrepreneurial ability is usually understood as a special type of human resource, which consists in the ability to most effectively use all other factors of production. The specificity of this type of human resource consists in the ability and desire to introduce new types of manufactured product, technologies, forms of business organization and the possibility of incurring losses in the production process on a commercial basis. Risk is the main distinguishing feature of an entrepreneur, and the purpose of doing business is to maximize income by identifying the most effective combination of production factors. Nobody guarantees the entrepreneur that the end result of his activity will be a loss or he will receive income.

It is customary to include in this resource: firstly, entrepreneurs, which include the owners of companies, managers who are not their owners, as well as business organizers who combine owners and managers in one person; secondly, the entire entrepreneurial infrastructure of the country, namely: the existing institutions of the market economy, i.e. banks, stock exchanges, insurance companies, consulting firms; third, the entrepreneurial ethics and culture, and the entrepreneurial spirit of the community.

In general, the entrepreneurial resource can be characterized as a special mechanism for realizing the entrepreneurial abilities of people, based on the current model of the market economy. All of the above provides a basis for defining entrepreneurship as a factor of production.

All factors of production interact with each other (Figure 1.2.1).

Combining factors of production

From the point of view of an econo-mist, these are all natural resources that are used in production. Such resources include oil, water, timber, gas, ore deposits, etc. These resources are rare and in many cases their reserves are decreasing every day.

Work is a very broad term that encompasses all kinds of human abilities and skills that can be used in the production of goods and services. More precisely, the owners of this factor do not sell labor, but their labor power.

In economics, the term "capital" is often used to refer to all artificial devices used in production. Understood in this way, capital consists of buildings and structures, equipment, tools and vehicles, sales facilities and semi-finished products.

BUSINESS ABILITY

This factor of production combines the economic resources of land, capital, labor in one enterprise

Scheme. Interaction of factors of production

Adam Smith attributed accumulated labor to capital, which was embodied in the means of production. David Ricardo attributed the means of production themselves to capital. Physiocrats considered the land as their capital.

Capital can be expressed in physical form. And it can also be expressed in monetary form, which was first done by Karl Marx, who defined capital as the value created by the labor of workers.

Capital- these are capital goods (determining the amount of monetary, material and intellectual resources) intended for production in the process of carrying out entrepreneurial activities.

As a means of production, capital is subdivided into fixed and circulating.

Basic capital can be used for several interest cycles (buildings, machines and other equipment).

Revolving capital is used during one interest cycle and includes raw materials, materials, energy, cash.

Forms of capital use:

"Capital accumulation involves the use of part of the profit as additional capital

"Concentration as - an increase in capital in the process of accumulation

"The centralization of capital is an increase in capital as a result of monopolization.

TYPES OF CAPITAL:

"Industrial

"Trading, the use of which is associated with the sale of goods

"Loan, the use of capital when issuing a loan for a fee.

The interest rate is the return on capital.

It is defined:

"The rate of profit, that is, the net income received for the year or rent for the same time

"Capital income can be defined on the financial assets of enterprises and the population.

An important role in making economic decisions is played by determining the current value of future goods. This process is called discounting.

CURRENT COST:

V - present value

N is the annually paid constant income

J -% - rate.

Profit is the excess over the% rate, rental payments and over the salary rate.

14. Entrepreneurial activity: essence, organizational and legal forms

Entrepreneurship- This is a proactive independent activity of citizens and their associations, aimed at making a profit (income), carried out at their own risk and under property responsibility.

Entrepreneurial activity is organized on the following principles:

free choice of activities;

attraction on a voluntary basis of property and funds of legal entities and citizens;

independent formation of programs of activity;

setting prices in accordance with the law;

free hiring of workers;

free disposal of the profit remaining after making the mandatory payments established by law (taxes, fines, etc.);

foreign economic activity.

The following types of entrepreneurial activities are distinguished:

industrial entrepreneurship (production and consumption of goods and services);

commercial entrepreneurship (associated not with production, but with the sale of goods and services). Commercial entrepreneurship is carried out by trade enterprises, commodity exchanges, etc.

financial entrepreneurship extends to circulation (banks, stock exchanges).

Entrepreneurs can be citizens of the country, legal entities of all forms of ownership, recognized as capable. Entrepreneurial activity is a set of sequentially or concurrently carried out transactions. Deal- This is the interaction of two or more economic entities in the interests of obtaining mutual benefit, based on a written agreement or oral agreement.

The capital market is an integral part of the overall market for factors of production. To understand it, it is necessary to find out the very content of the category "capital". There are several points of view on this complex economic category. So, it is often believed that capital is money, since it is a universal commodity that can be used to pay wages and settle with suppliers, invest in production development.

Other economists believe that capital is time, because it takes a period of time to generate income. Moreover, income is a kind of reward for refusing to meet current needs for the sake of meeting them in the future.

It is also widely believed that capital is a means of production that can be used to produce other goods. This understanding of capital as a good has a long history. So, for example, the physiocrats considered the land as capital, A. Smith - the accumulated goods and labor, and D. Ricardo - the invested means of production.

There are economists who believe that capital is the source of interest. They proceed from the fact that capital can bring interest or other income to its owner. At the same time, the essence of capital is approached one-sidedly, it is narrowed down to a loan product - capital that brings interest, and the role of capital as a source of interest is not revealed.

When using the achievements of scientific and technological revolution, the essence of capital began to be reduced to “human capital”. The role of science, which is increasingly turning into a direct productive force, is sharply increasing. Investments in science and education, contributing to the formation of "human capital", largely determine the possibilities of economic growth and raising the standard of living of the people.

Each of these concepts of capital, highlighting one side or another, does not reveal its essence in all its diversity. Let us consider in this connection the specific forms of capital associated with its market circulation, turnover and reproduction.

Capital turnover. Depreciation. Industrial capital, which exists in three main functional forms: monetary, productive and commodity, acts as the material and material basis of the market relations of enterprises. Before starting production, the firm in the sphere of circulation buys with money D the means of production Cn and labor power Pc necessary for it. In the sphere of production P, the means of production and labor force create the commodity and its value T1. After being sold in the sphere of circulation, the value of the commodity turns from a commodity into a monetary form D1, and D1 = D + Dd. Successively passing through three stages: circulation, production and again circulation, industrial capital, respectively, transforms from one functional form into another (money, productive, commodity), up to return (with an increment of Dd into the original money form, that is, there is a circulation of capital:

The turnover of the firm's capital, which is not considered as a separate act, but as a periodically repeating process, as a result of which the advanced funds fully return to their original monetary form, is called the turnover of the firm's capital. At the same time, the turnover of capital does not coincide with its circulation, because as a result of each circulation, only a part of the advanced capital in monetary form is returned to the company.These differences between the turnover and the circulation of capital are explained by the peculiarities of the turnover of means of labor and objects of labor.

The full turnover of capital takes place only if the entire capital value is returned to the firm in its original volume in monetary form. Since the capital of the firm in the process of circulation passes through the stages of production and circulation, then the time of capital turnover is composed of the time of production and the time of circulation. To determine the rate of capital turnover n, a certain period of time O should be divided by the duration of one turnover o, that is, n = O / o.

According to the method of turnover, the capital of the company is divided into fixed capital spent on the purchase of means of labor, and working capital spent on the purchase of objects of labor and labor. In turn, differences in the method of capital turnover are determined by differences in the functioning in the production of means and objects of labor, and this leads to a different way of transferring the value of these parts of capital to the finished product, to a different method of capital turnover.

Capital (from Lat. Capitalis - main, main property, main amount) - a set of goods, property, assets used to generate profit, wealth. In a narrower sense, it is a source of income in the form of means of production. Money capital is understood as money with the help of which physical capital is acquired. The direction of material and monetary funds in the economy, in production, is also called capital investments or investments. Resources directed to consumption are not capital.

Even at first glance, it is clear that capital is an all-encompassing and universal category. It is no coincidence that K. Marx titled his multivolume work "Capital". Whatever phenomenon of reality is considered, we are sure to come across this concept. Capital is interdependent on all relationships without exception. He is everywhere, either on the face, or, as it were, present. In everyday life, capital is most often understood as a sum of money that brings income to the owner. This point of view on capital was expressed by many thinkers, who, as a rule, proceeded from a separate private economy, and not from the general economy as a whole. Often, attention was drawn to one of the most common form in which a sum of money delivers income, and only this form was recognized as capital.

Capital as a factor of production in the form of a set of goods used in the production of goods and services is a tool, machinery, equipment, storage facilities, transport communications, means of communication, etc. Their technical condition is constantly being improved and has a decisive influence on the overall efficiency of the production process and its effective feasibility. Capital has many meanings and can be interpreted as the sum of money, as something that includes not only material objects (means of production), but also intangible elements, such as human abilities, education, qualifications.

The variety of definitions of "capital" and the main functions of capital.

• 1. Capital is accumulated value. In the theory of capital, this essential characteristic, traditionally considered by many researchers, is recognized as one of the main ones. From these positions, capital always acts as an economic value accumulated in society at a certain date. As the accumulated value, capital is considered in the form of its reserves formed in all sectors of the economy. In households, it is characterized by accumulated cash, gold, and securities. In enterprises, capital is a stock of fixed assets, intangible assets, cash reserves, securities, and inventories of current assets. Within the framework of the country (the national economy as a whole), capital in this capacity acts in the form of stocks of finished products of all types (means of production, objects of labor), gold, foreign exchange reserves, etc.
• 2. Capital is a production resource (factor of production). The accumulated economic benefits can be used primarily in the production process. Capital used in the production of goods and services is a factor of production, i.e. a resource involved in the production process and having a decisive impact on production results. As a factor of production, capital is characterized by a certain productivity. The productivity of capital, or capital productivity, is defined as the ratio of the volume of the product produced to the amount of capital used.
• 3. Capital is an object of ownership and disposal. As an object of entrepreneurial activity, capital is the bearer of ownership and disposal rights. In modern conditions, an entrepreneur who uses capital in the economic process may have disposal rights without ownership of it. In this case, the rights of ownership and disposal of capital are divided in the context of individual economic entities. An example of such a division of rights is the functioning of capital in the system of financial and credit institutions, joint-stock companies, etc., when the owners of capital transfer the rights to dispose of them to other persons.

As an object of ownership and disposal, capital also forms certain proportions of its use by individual business entities, reflected by the ratio of equity and debt capital. This ratio is characterized in economic theory by the category of "capital structure". It affects many aspects of the efficiency of the economic activity of an economic entity and largely determines the level of its market value.

• 4. Capital is a part of financial resources. From this point of view, a sufficient amount of capital means not only the possibility of paying compensation to creditors in the event of liquidation of an economic entity, but also maintaining its solvency by creating a reserve in case of losses, i.e. capital serves as "rainy day money." In the process of fulfilling its function as a financial resource, capital provides the means necessary for the creation, organization and functioning of an economic entity, for organizational growth and the development of new types of products and services before attracting borrowed funds. During the growth period, the organization needs additional capital to support and protect against the risks associated with the provision of new services and the construction of new facilities. Finally, as a financial resource, capital also serves as an organisation's growth regulator, aligning its growth and long-term viability.
• 5. Capital is a part of investment resources. By its economic nature, capital is an economic resource for investment. All major forms of capital movement in all sectors of the country's economy are associated with its investment and reinvestment. The process of using capital as a real investment resource is "net capital formation" (the volume of gross capital investment in a certain period, reduced by the amount of depreciation charges). Net capital formation provides an improvement in the production capabilities of individual economic entities and an increase in the production potential of society as a whole due to the net increase in real capital achieved in the investment process.
• 6. Capital is a source of income. Wherever capital is directed as an economic resource - in the real economy or in the financial sphere, it is always potentially capable of generating income for its owner, provided it is effectively used. As a source of income, capital is one of the most important means of shaping the future welfare of its owners.
• 7. Capital is an object of time preference. The process of capital functioning is directly related to the time factor. At the same time, the economic value of the current and future benefits associated with the functioning of capital is unequal for its owners. Economic theory asserts that today's goods are always valued by the individual above the goods of the future. In order to induce the owner of capital to refuse to use it for the purpose of current consumption, it is necessary to provide for such a refusal a sufficiently weighty remuneration for him. Alternative forms of time preference arise at all stages of capital functioning. Accordingly, at each of these stages, the owners of capital are faced with a choice dilemma associated with its use over time.

2 .1 . Production factors - 1) resources with which you can organize the production of goods; 2) the resources used in production, on which the quantity, volume of output depends to a decisive extent; 3) factors used in the production of goods and services.

Production factors = economic resources.

Economic resources (from franz... ressource - an auxiliary tool) - a fundamental concept of economic theory, meaning sources, means of ensuring production.

Economic resources are divided into : 1) natural (raw materials, geophysical), 2) labor (human capital), 3) capital (physical capital), 4) working capital (materials), 5) information resources, 6) financial (money capital). This division is not strictly unambiguous.

The production process is the transformation of economic resources (factors of production) into goods and services.

2.2 . What are the factors of production ?

2.2.1. Version No. 1: Factors of production = economic resources: 1) labor (the activity of people in the production of goods and services through the use of their physical and mental capabilities); 2) land (all types of natural resources available on the planet and suitable for the production of economic benefits); 3) capital (production building, machines, tools). No less important is another factor that connects all the others, 4) entrepreneurial ability.

2.2.2. Version # 2: Factors of production = 1) labor + 2) means of production (natural resources + [produced resources = capital]).

2.2.3. Nowadays, one more very specific type of production factors has acquired an immeasurably greater importance than before - 5) information (knowledge and information that people need for conscious activity in the world of economics). Possession of reliable information is a prerequisite for solving the problems facing an economic entity. However, even complete information is not a guarantee of success. The ability to use the information obtained to make the best decision under the current circumstances characterizes such a resource as knowledge. The carriers of this resource are qualified personnel in the field of management, sales and customer service, technical maintenance of goods. It is this resource that gives the greatest return in business. “What distinguishes a strong company from a weak one is, first of all, the level of qualifications of its specialists and management personnel, their knowledge, motivations and aspirations.

In addition to the listed factors, the following factors play an important role in the economy: 6) general culture; 7) science; 8) social factors (state of morality, legal culture).

2.3 . Work- a set of physical and mental abilities that people use in the process of creating economic benefits.

Labor characteristics : 1) labor intensity (the intensity of labor, which is determined by the degree of expenditure of labor power per unit of time); 2)labor productivity (productivity = labor productivity, which is measured by the amount of products produced per unit of time).

2.4 ... Under " land»Economists understand all types of natural resources. This group includes the gratuitous benefits (???) of nature, which are used in the production process: plots of land on which industrial buildings are located, arable land on which crops are grown, forests, water, mineral deposits.

2.5 . Capital(from lat... capitalis - the main one) as a means of production was understood by Smith and Ricardo. Other economists have argued that capital is "the sum of money" and "securities." There is a view that capital is a person's knowledge, skills and energy used in the production of goods and services. Today, in a broad sense, capital is understood as everything that brings income to its owner. This can be the means of production, and leased land, and cash deposits in the bank, and the labor force used in production.

Capital is 1)real(or physical) and 2) monetary, or financial(money used to acquire physical capital).

!!! The factors of production include not all capital, but only real capital - buildings, structures, machine tools, machinery and equipment, tools, etc. - that is, everything that is used for the production and transportation of goods and services.Financial capital (stocks, bonds, bank deposits and money) is not a factor of production., since it is not associated with real production, but acts as an instrument for obtaining real capital.

Investments(from lat... investre - to clothe) - 1) long-term investment of material and monetary resources in production.

The continuous circular movement of capital forms its turnover. At the stage of production, different parts of the productive capital turn around in different ways (for different periods). Therefore, capital is divided into fixed and circulating.

Main capital (machines, equipment, buildings): 1) is used for a number of years, 2) transfers its value to the product in parts, 3) costs are returned gradually.

Working capital (raw materials, semi-finished products, wages of workers): 1) is consumed in one production cycle, is included in the newly created product entirely, 3) costs are reimbursed after the product is sold.

2.6 ... Entrepreneurial ability is an essential production resource. They are possessed by a very small part of people performing a number of functions, without which the organization and successful production activities are impossible.

Entrepreneurial functions : 1) the ability to correctly combine the factors of production - labor, land, capital - and organize production; 2) the ability to make decisions and take responsibility for oneself; 3) the ability to take risks; 4) be receptive to innovation.

2.7 . Factor income : 1) labor?> wage; 2) earth?> rent(income of the one who owns the land); 3) capital?> percent(payment for using other people's money); 4) entrepreneurial ability?> profit.

Rent(from lat... reddita - returned) - income regularly received by the owner from the use of land, property, capital, which does not require the recipient of the income to carry out entrepreneurial activities, the cost of additional efforts.

Loan capital- temporarily free funds provided in a loan on terms of repayment and payment.

Percent(from Latin pro centrum - for a hundred) - 1)credit interest (loan interest -mouth.) - payment that the borrower must pay for the use of credit, money or material values; 2)deposit interest - payment to the depositor of the bank for providing the bank with money on the deposit for a certain period.

2.8 . Karl Marx on the factors of production .

German economist and philosopher of the 19th century. Karl Marx distinguished the personal and material factors of production, while the person himself acts as a personal factor, as the bearer of labor power, and the material factor of production means the means of production, which in turn consist of means of labor and objects of labor.

Productive forces (= factors of production ) = 1) personal factor (person) + 2) material factor, means of production (means of labor + subject of labor).

Labor toolsthere is "... a thing or a complex of things that a person places between himself and the object of labor and which serve for him as a conductor of his influences on this object." Means of labor, and above all instruments of labor, include machines, machine tools, tools with which a person affects nature, as well as industrial buildings, land, canals, roads, etc. The use and creation of means of labor is a characteristic feature of a person's labor activity. The means of labor in a broader sense include all material conditions of labor, without which it cannot be performed. The general condition of labor is land, the conditions of labor are also production buildings, roads, etc. The results of social cognition of nature are embodied in the means of labor and the processes of their production use, in technology and technology. The level of development of technology (and technology) serves as the main indicator of the degree of mastery of the forces of nature by society.

Subject of labor- the substance of nature, which a person influences in the process of labor in order to adapt it for personal or industrial consumption. An object of labor that has already undergone the influence of human labor, but is intended for further processing, is called a raw material. Some finished products can also enter the production process as a subject of labor (for example, grapes in the wine industry, animal oil in the confectionery industry). "If we consider the entire process from the point of view of its result - the product, then both the means of labor and the object of labor both act as means of production, and labor itself - as productive labor."

The totality of factors of production act as productive forces that are inextricably linked with production relations. Some characterize the material and material content of the process of social production, while others characterize its historically determined form. Evolving, each stage of development of the productive forces, characterized by the type of production relations, constitutes a unique mode of production.

Mode of production = productive forces + production relations.