Structure of social production

From the production of a product or performs a blessing. They are created in a variety of sectors and industries of social production. Distinguish between material and non-material production.

Material production includes the industry, and the generation of wealth (industry, agriculture, construction), and to provide material services (transport, trade, etc.).

Along with the production of material goods, there immaterial production, where are intangible benefits (spiritual values), as well as services are intangible. This is health care, education, research, and other.

Production in its continuous repetition is called reproduction, which includes four phases: production - distribution - exchange – consumption.

In the production of man adapts matter and the forces of nature to meet their needs. Distribution reveals the share of each person to create wealth. It depends on the number of created wealth for distribution. Exchange determined by the nature and the development of production. Exchange of products is designed to deliver the production of each participant, each of its links certain benefits according to the proportion set by the distribution.

Consumption is the final stage of the product flow. It sold its use-ability. There are two types of reproduction: simple and extended.

In simple reproduction size of the work product and quality in each subsequent cycle remain unchanged. Accordingly, the factors of production are not subject to fluctuation. The entire surplus product, if it is used by manufacturers for the purposes of personal consumption.

With enhanced reproduction of the product of the product in each subsequent cycle increases, which is achieved at the expense of improving the quality of the product. Source of expansion or improvement of the quality factor is the surplus product.

The relation between the growth rate and the change in the product of factors of production can vary depending on what type of economic development (expanded reproduction): extensive or intensive.

Types of expanded reproduction:

Extensive type of production - production growth achieved by a quantitative increase in the factors of production, while preserving the same technical framework.

Intensive type of production - production growth achieved by improving the quality of production factors: the use of advanced means of labor cost of items of work and productivity.

Mixed type - achieved by quantitative increase factors and the development of engineering and technology.

Given the characteristics of the intensive type of economic growth, it is necessary to clarify the concept of efficiency. In general terms between the result and the cost in the manufacturing process of the product. This category is used to assess the effectiveness of social production.

The economic efficiency of the economic system - a state in which it is impossible to increase the degree of satisfaction of the needs of at least one person, without compromising the position of the other member of society. This is called the Pareto-efficiency (after the Italian economist Pareto). A better understanding of Pareto efficiency possible in the study of market equilibrium.