The means of production is a term which describes

land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various isla ...

labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the la ...

and capital that can be used to produce products (such as

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not t ...

services Service may refer to: Activities * Administrative service, a required part of the workload of university faculty * Civil service, the body of employees of a government * Community service, volunteer service for the benefit of a community or a p ...

); however, the term can also refer to anything that is used to produce products. It can also be used as an abbreviation of the "means of production and distribution" which additionally includes the

logistical Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...

distribution and delivery of products, generally through distributors, or as an abbreviation of the "means of production, distribution, and exchange" which further includes the exchange of distributed products, generally to consumers. This concept is used throughout fields of study including

politics Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of resources or status. The branch of social science that stud ...

economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...

, and

sociology Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation an ...

to discuss, broadly, the relationship between anything that can have productive use, its ownership, and the constituent social parts needed to produce it.

Industrial production

From the perspective of a firm, a

firm A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared go ...

uses its capital goods, which are also known as tangible assets as they are physical in nature. Unfinished goods are transformed into products and services in the production process. Even if capital goods are not traded on the market as consumer goods, they can be valued as long as capital goods are produced commodities, which are required for production. The total values of capital goods constitute the capital value. The social means of production are capital goods and assets that require organized collective labor effort, as opposed to individual effort, to operate on. The ownership and organization of the social means of production is a key factor in categorizing and defining different types of economic systems. The means of production includes two broad categories of objects: instruments of labor (tools,

factories A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. T ...

, infrastructure, etc.) and subjects of labor (

natural resource Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. ...

s and raw materials). People operate on the subjects of labor using the instruments of labor to create a product; or stated another way, labor acting on the means of production creates a good. In an

agrarian society An agrarian society, or agricultural society, is any community whose economy is based on producing and maintaining crops and farmland. Another way to define an agrarian society is by seeing how much of a nation's total production is in agriculture ...

the principal means of production is the soil and the shovel. In an industrial society the means of production become social means of production and include factories and mines.

Knowledge production

In a knowledge economy, computers and networks are means of production. In a broad sense, the "means of production" also includes the "means of

distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...

" such as stores, the internet and railroads (

Infrastructural capital Public capital is the aggregate body of government-owned assets that are used as a means for productivity.Aschauer, D. A. (1990). Why is infrastructure important? Conference Series roceedings Federal Reserve Bank of Boston. Pp. 21-68. Such asset ...

Depreciation

The means of production of the firm may depreciate, which means there is a loss in the economic value of capital goods or tangible assets (e.g. machinery, factory equipment) due to wear and tear, and aging. This is known as the

depreciation In accountancy, depreciation is a term that refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wear, and second, the ...

of capital goods.

Marxism and Marxist theory of class

The analysis of the technological sophistication of the means of production and how they are owned is a central component in the Marxist theoretical framework of historical materialism and in Marx critique of political economy, and later in Marxian economics. In Marx's work and subsequent developments in Marxist theory, the process of

socioeconomic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern societies progress, stagnate, or regress because of their l ...

evolution is based on the premise of

technological improvements Technological change (TC) or technological development is the overall process of invention, innovation and diffusion of technology or processes.From ''The New Palgrave Dictionary otechnical change by S. Metcalfe. •biased and biased tech ...

in the means of production. As the level of technology improves with respect to productive capabilities, existing forms of

social relations A social relation or also described as a social interaction or social experience is the fundamental unit of analysis within the social sciences, and describes any voluntary or involuntary interpersonal relationship between two or more individuals ...

become superfluous and unnecessary, creating contradictions between the level of technology in the means of production on the one hand and the

organization of society In sociology, a social organization is a pattern of relationships between and among individuals and social groups. Characteristics of social organization can include qualities such as sexual composition, spatiotemporal cohesion, leadership, ...

and its

economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...

on the other. In relation to technological improvements in means of production, new technologies and scientific breakthroughs can rearrange the market structure, create massive economic impact and disrupt the profit pool in the economy. Further impact of

disruptive technologies In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances. The concept wa ...

may lead to certain forms of labour power economically unnecessary and uncompetitive and even widening income inequality. These contradictions manifest themselves in the form of class conflicts, which develop to a point where the existing mode of production becomes unsustainable, either collapsing or being overthrown in a social revolution. The contradictions are resolved by the emergence of a new mode of production based on a different set of

including, most notably, different patterns of ownership for the means of production. Ownership of the means of production and control over the surplus product generated by their operation is the fundamental factor in delineating different

modes of production In the Marxist theory of historical materialism, a mode of production (German: ''Produktionsweise'', "the way of producing") is a specific combination of the: * Productive forces: these include human labour power and means of production (tools, ...

. Capitalism is defined as private ownership and control over the means of production, where the surplus product becomes a source of

unearned income Unearned income is a term coined by Henry George to refer to income gained through ownership of land and other monopoly. Today the term often refers to income received by virtue of owning property (known as property income), inheritance, pensions ...

for its owners. Under this system, profit-seeking individuals or organizations undertake a majority of economic activities. However, capitalism does not indicate all material means of production are privately owned as partial economies are publicly owned. By contrast,

socialism Socialism is a left-wing Economic ideology, economic philosophy and Political movement, movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to Private prop ...

is defined as

social ownership Social ownership is the appropriation of the surplus product, produced by the means of production, or the wealth that comes from it, to society as a whole. It is the defining characteristic of a socialist economic system. It can take the form of ...

of the means of production so that the surplus product accrues to

society A society is a group of individuals involved in persistent social interaction, or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. Soci ...

at large.

Determinant of class

Marx's theory of class defines classes in their relation to their ownership and control of the means of production. In a capitalist society, the bourgeoisie, or the capitalist class, is the class that owns the means of production and derives a passive income from their operation. Examples of the capitalist class include business owners, shareholders and the minority of people who own factories, machinery and lands. Countries considered as the capitalist countries include Australia, Canada and other nations which hold a free market economy. In modern society, small business owners, minority shareholders and other smaller capitalists are considered as ''

Petite bourgeoisie ''Petite bourgeoisie'' (, literally 'small bourgeoisie'; also anglicised as petty bourgeoisie) is a French term that refers to a social class composed of semi-autonomous peasants and small-scale merchants whose politico-economic ideological st ...

'' according to Marx's theory, which is distinct from bourgeoisie and proletariat as they can buy the labour of others but also work along with employees. In contrast, the proletariat, or

working class The working class (or labouring class) comprises those engaged in manual-labour occupations or industrial work, who are remunerated via waged or salaried contracts. Working-class occupations (see also " Designation of workers by collar colo ...

, comprises the majority of the population that lacks access to the means of production and are therefore induced to sell their

labor power Labour power (in german: Arbeitskraft; in french: force de travail) is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of w ...

for a wage or salary to gain access to necessities, goods and services. According to Marx, wages and salaries are considered as the price of

labour power Labour power (in german: Arbeitskraft; in french: force de travail) is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of w ...

, related to working hours or outputs produced by the labour force. At the company level, an employee does not control and own the means of production in a capitalist mode of production. Instead, an employee is performing specific duties under a contract of employment, working for wages or salaries. As for firms and profit-seeking organizations, from a personnel economics perspective, to maximize efficiency and productivity there must be an equilibrium between labour markets and product markets. In human resource practices, compensation structure tend to shift towards pay-for-performance bonus or incentive pay rather than base salary to attract the right workers, even if conflicts of interest exist in an employer-worker relationship. To the question of why classes exist in human societies in the first place, Karl Marx offered a historical and scientific explanation that it was the

cultural practice Cultural practice is the manifestation of a culture or sub-culture, especially in regard to the traditional and customary practices of a particular ethnic or other cultural groups. The term is gaining in importance due to the increased controver ...

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 Caste is a form of social stratification characterised by endogamy, hereditary transmission of a style of life which often includes an occupation, ritual status in a hierarchy, and customary social interaction and exclusion based on cultura ...

. This explanation is consistent with the bulk of Marxist theory in which Politics and

Religion Religion is usually defined as a social- cultural system of designated behaviors and practices, morals, beliefs, worldviews, texts, sanctified places, prophecies, ethics, or organizations, that generally relates humanity to supernatural, ...

are seen as mere outgrowths ( superstructures) of the basic underlying economic reality of a people.

Related terms

Factors of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rel ...

are defined by German

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

in his book ''

Das Kapital ''Das Kapital'', also known as ''Capital: A Critique of Political Economy'' or sometimes simply ''Capital'' (german: Das Kapital. Kritik der politischen Ökonomie, link=no, ; 1867–1883), is a foundational theoretical text in materialist phi ...

'' as labor, subjects of labor, and instruments of labor: the term is equivalent to means of production plus labor. 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 economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rel ...

"; in ''Kapital'', he uses "factors of production", in his famous Preface to his ''

Critique of Political Economy Critique of political economy or critique of economy is a form of social critique that rejects the various social categories and structures that constitute the mainstream discourse concerning the forms and modalities of resource allocation and ...

A Contribution to the Critique of Political Economy ''A Contribution to the Critique of Political Economy'' (german: Zur Kritik der Politischen Ökonomie) is a book by Karl Marx, first published in 1859. The book is mainly a critique of political economy achieved by critiquing the writings of the ...

'', he uses "productive forces" (that may depend on the translation). Production relations (German: ''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 In the Marxist theory of historical materialism, a mode of production (German: ''Produktionsweise'', "the way of producing") is a specific combination of the: * Productive forces: these include human labour power and means of production (tools, ...

(German: ''Produktionsweise'') means the dominant way in which production is organised in society. For instance, "

capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...

" is the name for the capitalist ''mode of production'' in which the means of production are owned privately by a small

class Class or The Class may refer to: Common uses not otherwise categorized * Class (biology), a taxonomic rank * Class (knowledge representation), a collection of individuals or objects * Class (philosophy), an analytical concept used differentl ...

(the bourgeoisie) who profits off the labor of the

(the proletariat).

Communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a ...

is a mode of production in which the means of production are not owned by anyone, but shared in common, without class-based

exploitation Exploitation may refer to: *Exploitation of natural resources *Exploitation of labour ** Forced labour *Exploitation colonialism *Slavery ** Sexual slavery and other forms *Oppression *Psychological manipulation In arts and entertainment *Exploi ...

. Besides capitalism and communism, there is another mode of production which is called a Mixed Economic System. In a mixed economy, private ownership of capital goods are protected and a certain level of the market economy is allowed. However, the government has the right to intervene the market and economic activities for social objectives. Different from the pure capitalism, the government regulation exists to control particular means of production over the private business sector. Different from communism, the majority of means of production are privately owned rather than shared in common.

Footnotes

References

* Institute of Economics of the Academy of Sciences of the U.S.S.R. (1957). ''Political Economy: A Textbook''. London: Lawrence and Wishart. {{DEFAULTSORT:Means Of Production Marxist terminology Communism Socialism Capitalism Marxian economics Production economics Labour economics Capital (economics) Factors of production