Cost theory: description, types and applications. Theory of surplus value: a description

The classical theory of value is devoted to one of the most important elements of economic relations. Without it, it is difficult to imagine modern commodity and monetary ties of various producers and buyers.

Classical theory

The most famous theory of value is also called labor theory of value. Its founder is the famous Scottish explorer Adam Smith. He created the English school of classical economics. The main thesis of the scientist was the idea that the well-being of the people can grow only by increasing the productivity of their labor. Therefore, Smith publicly advocated the improvement of the working conditions of the entire English population. His theory of value says that the source of value is socially divided labor in all spheres of production.

This thesis was developed by another prominent economist of the early XIX century, David Ricardo. The Englishman argued that the price of any product is determined by the labor necessary for its production. For Ricardo, Smith's theory of value was the basis of the entire economy of capitalism.

Marxist theory

The labor theory of value was adopted by another well-known economist. They were Karl Marx. The German philosopher and ideologist studied the exchange of goods on the market and came to the conclusion that all products (even the most diverse) have the same content of an internal character. It was a cost. Therefore, all goods are equated to each other in accordance with a certain proportion. Marx called this ability an exchange value. This property is inherent in any product. This phenomenon is based on social work.

In his own way, Marx developed Smith's ideas. So, for example, he became the founder of the notion that work has a dual nature - abstract and concrete. For many years, the German scientist systematized his knowledge in the field of political economy. This huge array of ideas and facts became the foundation for a new Marxist idea. This was the so-called theory of surplus-value. It became one of the main arguments in the then criticism of the capitalist system.

Surplus value

A new theory of the value of Marx stated that the worker, selling his own labor, becomes an exploited bourgeoisie. Between the proletarians and the capitalists there was a conflict, the cause of which was the costs of the system of the European economy. Owners' money multiplied only through the use of labor, and this is the order Karl Marx criticized most.

The value of the commodity, which the capitalist establishes, always exceeds the cost of the labor of the hired proletarian. Thus, the bourgeois received profit from the fact that they raised prices for their own income. At the same time, workers always received low wages, because of which they could not get out of their own exploited environment. They found themselves in a dependent position from the employer.

Absolute surplus value

The Marxist theory of labor costs also includes a term such as "absolute surplus value." What does it result from? This surplus value, which the capitalists receive by extending the working day of their subordinates.

There are certain time frames necessary for the production of goods. When proprietors force proletarians to work outside these limits, the exploitation of labor begins.

Limit value

The theory of marginal utility, or, in another way, the theory of marginal cost, emerged as a result of research by several famous economists of the nineteenth century: William Jevons, Karl Menger, Friedrich von Wieser, etc. She first explained the relationship between the price of goods and psychological attitudes The buyer. According to its basic theses, consumers acquire what may be a source of satisfaction or pleasure for them.

The theory of marginal utility has made several important things. First, thanks to it, a new approach to the study of the problem of production efficiency was formulated. Secondly, for the first time the rule of limit was used. Later, many other economic theories will adopt it. The theory of marginal cost has forced scientists to shift their main research attention from the costs of the final result of production. And finally, for the first time in the center of the study was the behavior of buyers.

Marginalism

The classical theory of value, whose adherents were Smith, Ricardo and Marx, believed that commodity value is an objective value, since it is determined by the amount of labor spent on production. The theory of marginal utility offered the opposite approach to the problem. It was also called marginalism. The new theory said that the value of the goods is determined not by production labor costs, but by the effect that it can have on the buyer.

The essence of marginalism can be formulated as follows. The consumer lives in a world full of various benefits. Because of their variety, prices become subjective. They depend only on the mass behavior of buyers. If the product is in demand, then the prices will start to grow. It does not matter how much the manufacturer spent money on it before. It only matters whether the buyer wants to purchase the goods. This relationship can also be represented as a chain from the consumer, the need, the utility of the good, its value and the final price.

Law of value

The classical theory of value considers the law of value as one of the most important aspects of economic relations since the most ancient times. The exchange of goods took place even in Egypt and Mesopotamia about five thousand years ago. This was indicated by the German scientist and the closest associate of Karl Marx, Friedrich Engels. Then the law of value arose. However, he found the greatest application in the heyday of capitalism. This is due to the fact that in the conditions of a market economy, the production of goods acquires a mass character.

What is the essence of the law of value? What is his main message? This law states that the exchange of goods and their production are carried out in accordance with the cost and necessary labor costs. This relationship operates in any society where there is an exchange. It is also important to work time, which is spent on the creation and preparation of goods for sale. The more it is, the higher the purchase price.

The law of value, like the basic theory of value, boils down to the fact that individual working time must correspond to the socially necessary. Such costs become a certain standard, in which manufacturers must fit. If they can not cope with this, they will suffer losses.

Functions of the law of value

In the nineteenth century, economic value theories attributed a large role to the law of value in the formation of economic relations. The modern market at the international and national levels only confirms this thesis. The law provides factors that help stimulate the economy and develop production. Its effectiveness directly depends on the relationship with other economic phenomena - competition, monopoly and monetary circulation.

An important function of the law of value is to ensure its distribution of labor between different production spheres. It regulates the use of resources needed to create goods and their appearance on the market. An important aspect for this function is price dynamics. Together with the fluctuation of this market indicator, there is a distribution of labor and capital between different economic branches.

Stimulation of production costs

The law of value stimulates production costs. How does this pattern work? If the producer of the goods makes his individual labor costs higher than the public, he will certainly suffer losses. This is an insurmountable economic pattern. In order not to go bankrupt, the manufacturer will have to reduce own labor costs. To this he is forced precisely by the law of value, acting on any market, regardless of belonging to one or another industry.

If the commodity producer has a low individual value of the goods, he will get certain economic advantages in comparison with his competitors. So the owner not only reimburses the cost of labor, but also receives a noticeable income. This pattern makes successful market players of those manufacturers who invest their own funds in improving production on the basis of scientific and technological progress.

The modern theory of value

Along with the development of a market economy, the notion of it is changing. Nevertheless, the modern theory of value is entirely based on the laws formulated by Adam Smith. One of her main statements is the thesis that social work is divided into two parts - the scientific and technical sphere and the sphere of reproduction.

What are their differences? The scientific and technical sphere of social labor includes the production of new goods on the basis of discoveries in science and technology. This is how consumer value is formed (in the new economic theory it is also called absolute value).

In the sphere of reproduction there are other factors of production. Here, relative, or exchange, value is formed. It is determined by the energy costs of reproduction of services and goods. The modern theory of value has made it possible to determine the regularities in determining the value of individual wages. First of all, it depends on the attitude of society towards the effectiveness and usefulness of a particular profession.