Commodity-money relations in a society, Commodity production and goods - Fundamentals of economic theory

Commodity-money relations in a society

The next powerful layer of economic relations in society is the interaction of people around the exchange of goods, circulation of money and securities, exchange and banking activities. The functioning of such important financial institutions of the society as money, stocks, exchanges, credit, banks, etc. is connected with this. It is, however, more logical to begin with commodity production and circulation.

Commodity production and goods

For a long time, natural production, dominated in people's lives, under which every business unit (family, community, monastery) kept isolated from others, a closed economy, producing for itself all a set of necessary products. As the productive forces and the social division of labor develop, this inefficient universal production has been supplanted by a more specialized and more productive commodity economy.

Commodity production - is the production of products not for own consumption, but for exchange, for sale. A product of this type is called a commodity. Every commodity has two basic economic properties: use value and value. For example, use value is the product utility , its specific assignment. Say, the use value of a book is that it satisfies the spiritual needs of people; machine - in its ability to produce other desired products.

How to ...

Choose! The largest selection of informative articles.

Tired of looking for a solution?

Get Your ESSAY Now!

In contrast, cost is materialized in the product work of people. With the modern, high level of specialization in production, most of the products embody the labor of so many people. However, this work is not evaluated by the producers themselves. Objective and real valuation occurs on the market, when the goods are exchanged for other goods. It then becomes clear how much it is necessary and appreciated by consumers.

In other words, if someone suddenly makes an ordinary kitchen pan made of ... gold and wants to sell it expensive (in accordance with the large amount of labor embodied in it), it does not mean at all that the pot will be bought: society can reject such a commodity, because its cost will be inadequate its use value. This is important to consider other manufacturers who (NB) justify the high price for their uncompetitive and poorly bought goods with large labor costs. & quot; Reduce costs & quot ;, - only so can consumers respond to them.

The quantitative ratio in which one commodity is exchanged for another is called the exchange value. So, if the equivalent of 5 axes is 30 kg of grain (in barter exchange), then barter the cost of 1 ax is 6 kg of grain. At the same time, with the advent of money, this cost is already in the form of price. Price, is, therefore, a monetary expression of the value of the commodity.

The latter, however, does not mean that the price and value of each product always coincide numerically. The prices in the market are known to fluctuate , but their "barometric fluctuations" (Marx) usually occur just around the value, rather than some arbitrary value.

Nowadays, the purchase and sale of goods have acquired a mass character and form a continuous trade flow called commodity circulation. This process involves two main stages: wholesale and retail trade (Figure 4.11).

The main directions of wholesale and retail trade

Fig. 4.11. The main directions of wholesale and retail trade

Wholesale is the trade in large quantities of goods, or wholesale. It is carried out at wholesale prices (costs + producer profit) and on three main lines: (a) between manufacturers (for example, direct supplies of fabrics by the textile mill to a garment factory): (about) between the manufacturers of products and the trading enterprises that sell it; (c) between the merchants themselves. Retail covers mainly the sale of personal consumption goods in small quantities directly to consumers and already at higher retail prices (wholesale price + profit sellers).

The main characters of commodity circulation are wholesalers, or, in the West, distributors . The figure of these & quot; distributors & quot; is contradictory. On the one hand, they are useful market agents, delivering goods to hundreds of near and far points of their consumption. And on the other, - "merchants - the same leeches & quot; (Turgenev). They often parasitize at the expense of producers and consumers and act as price increase generators when a lot of "suck in" to the same commodity on the way from production to consumption, pass it to each other, and each strives to "wind" and bite off your share of profits. It's about them said in the Bible: "take what they did not put, and reap what they did not sow" (6-Lk 19:21). 1

Ready to make your order?

Get your great paper now

Profit-seeking traders deliberately restrict purchases and sales, use & quot; price scissors & quot; (buying goods from manufacturers at low, and selling to consumers at inflated prices) are not allowed goods in a wide competitive sale, turning the latter into an "exclusive". As a result, commodity turnover becomes more complicated, instead of rational direct commodity deliveries, society gets multistage, a lot of businessmen are diverted from the sphere of production to trade, and consumers receive an increased price. Knowingly, Ford says that "speculation with finished products has nothing to do with business - it means no more and no less, like a more decent kind of theft" (45-14).

In this regard, the experience is instructive in one of the regions of Spain. There local authorities (the cup of patience which once filled the sale of watermelons with a purchase price of 5 and a retail price of 50 per kilogram) obliged the final traders to indicate in the price tags both prices (both purchasing and retail), /i> so that the buyer could immediately evaluate the reasonableness of the aspirations to their own advantage from different vendors and choose a more modest one. At the same time, double prices discipline the traders themselves.

In the retail sector, inexperienced traders are more likely to abuse higher prices. Some of them believe that it is only necessary to open a shop and get up prices, how the profit will flow by the river (how many novice store owners are fired on this, ruining before our eyes!). They forget that high prices are a sluggish trade, which means that the stagnation and unprofitability of the business.

And meanwhile there is another, more rational way to increase profitability - the acceleration and expansion turnover of goods, for the proverb is true: time is money. Without loosing the capital in the warehoused goods, flexibly reacting to the consumer demand and attracting the customers with a smile, attention, low prices, the reasonable dealer establishes a clear and fast work of his conveyor (purchases - counter - sales) and as a result is growing and expanding.

That's right, without chasing a high trading margin (limiting yourself to -10%), but while gaining speed and volume of commodity turnover, for example, the rapidly growing network of Astrakhan stores with a patriotic name (and content) < Strong income from turnover, and not from a price is the command of a wise businessman.

Returning to the very nature of the commodity exchange relations, we point out that before they took the modern form, they went through a long and winding path of mostly spontaneous development.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)