Economic goods are constantly in motion and take the form of a circuit. The circulation of goods is their economic movement, starting from the phase of production and ending with consumption.

The economic cycle is divided into four phases: production, distribution, exchange and consumption (rice).

The starting point is production, in which the very creation of economic benefits (material goods and services) necessary for the existence and development of a person takes place. Production is the basis (foundation) of any economy.

Production involves the constant return of the producer of goods to the initial phase of movement (production phase), but this return should differ from the original one by higher quantitative and qualitative characteristics, both of the production process itself and of the result obtained.

Distribution of the produced product affects all participants in production, determines the share of each person in the products produced, which depends on the total amount of goods created and on the specific contribution of an individual economic entity to production. The forms of distribution can be wages, rent, interest, profit, fees, etc. As production grows, the volume of distributed income also increases. Distribution determines the movement of the product in the exchange phase (something remains with the producer, and something is exchanged).

The third stage of the cycle of economic benefits - exchange, which covers a system of connections and relations that allows producers to exchange the products of their labor, i.e. it is the process of movement of economic goods and services from one entity to another. Exchange penetrates deeply into production, because there is a need for workers to exchange experience and knowledge in order to achieve higher production efficiency.

The purpose of exchange is to satisfy the needs of each individual through the process of buying and selling goods and services. This stage is necessary because each commodity producer specializes in the production of one (or group) of goods and services, but in order to satisfy his needs, he must exchange the product of his labor for the goods of other producers. This stage of social production ensures continuous communication between producers and consumers through a system of exchange of the results of production activities between all market participants.

Consumption means the use of created economic goods to meet the diverse needs of people. It can be personal (food, clothes, shoes, etc.) and industrial (machines, machines, equipment, etc.).

Consumption constitutes a special - final - stage of the circulation of economic goods. At this time, useful things disappear in the process of production consumption, and they must be re-produced. Thus, the movement of economic goods, which began with production, inevitably returns to the starting point.

All stages of the circulation of economic benefits in social production are interconnected and interdependent.

A person always strives to ensure that his whole life is connected with the presence of a wide variety of benefits. Goods can exist independently of a person ( natural goods– soil, climate, water and forest resources, etc.) and depend on its activities ( economic benefits, the quantitative and qualitative expression of which is determined by the effort of a person, his physical and mental activity, technical equipment of labor).

Economic benefits are very diverse. Firstly, this is due to the diversity of people's needs, which are formed under the influence of various factors and situations - economic (income level), social (lifestyle), natural (difference in climatic zones), which can operate in conditions when the country is experiencing an economic crisis. growth, recession, crisis.

Secondly, the multiplicity of benefits is associated with the influence of the demographic factor (the population on earth by the beginning of the third millennium is 6 billion people and continues to grow).

Economic benefits can be in material form and in the form of services. If we talk about the material form, then we mean the means of production and consumer goods created by man, between which there must be a certain proportion.

Now let's consider the question of what value such an economic good as a service has for society. Despite the many interpretations of the term "service" in the economic literature, it can be said that service- an action aimed at satisfying a person's needs, in the process of which a new, previously non-existing tangible product is not created, but the quality of an already existing, created product is changed.

In Soviet economic science, the role and importance of the service sector was downplayed for a long time. This was due to the fact that work in the service sector was classified as non-productive activity. Only activities in the sphere of material production were considered productive. This has also left its mark on the presentation of economic theory in many textbooks that deal with the problems of creating a material product, rather than providing services.

In our country there is such classification service industries:

Services included in material production (freight transport, communication for production maintenance, warehousing, etc.);

Services related to non-material production (education, medicine, art, sports, etc.).

Economic benefits can be interchangeable(butter and margarine, tooth powder and toothpaste, etc.) and complementary(car and gasoline, housing and housing and communal services).

Economic benefits are divided into long-term reusable (car, book, electrical appliances, videos, etc.), and short-lived, disappearing in the process of one-time consumption (bread, meat, drinks, matches, etc.).

Economic benefits can also be divided into real and future, direct (consumer) and indirect (production).

In each of the cases considered, attention must be paid to maintaining certain proportions between these benefits. Otherwise, there may be negative economic and social consequences.

Economic goods are constantly in motion and take the form of a circuit. When one speaks of the circulation of goods, one understands not only the movement of goods in space and time. Circulation of goods is their economic movement, starting from the production phase, implying a constant return to the initial phase. But this return must differ from the original act of production by higher quantitative and qualitative characteristics, both of the production process itself and of the result obtained.

The need to repeat the production process is caused by the fact that there is a gradual physical disappearance of material wealth (machines wear out, food products consumed, etc.). There is also a moral depreciation of previously produced material goods (production requires more advanced machines, materials, machines, mechanisms, and a person needs new commodities).

Thus, the circulation of goods occurs according to the following phases:

1) production (the initial phase of the movement of an economic good);

2) distribution (determines the movement of the product to the exchange phase);

3) exchange (connects production and distribution on the one hand and consumption on the other);

4) consumption (gives a signal to production what needs to be produced and in what volumes).

The whole process of circulation is connected with the activity of various subjects eq. relations - households, enterprises and organizations and is regulated by the state through prices, taxes, interest rates. It is in the interests of the state to accelerate the process of circulation of eq. benefits, but in a way that does not undermine the stability of the economic and social systems.

This model can be refined by including turnovers within sectors. Emphasizing the main thing, the simple model of the circuit somewhat idealizes the reality. First, it does not take into account the accumulation of both economic goods and monetary resources, as well as the fact that some resources may fall out of the turnover process. For example, if consumers start saving a portion of their income, the impact of aggregate demand decreases. Such circumstances can further significantly modify the elementary circuit model. The most important of their consequences is the development of the credit system.

Second, the scheme abstracts somewhat from the role of the state. The role of the state in modern world is very diverse, since it affects both the agents of the market economy and the markets for products, factors of production, credit, etc. At the same time, the state uses various methods: economic, administrative, political, etc. It is not possible to show this on the diagram. Thirdly, the circuit model can be refined by including international trade.

Reproduction is a process of constant repetition and renewal of production. In any society, reproduction includes the following main points:

1. Reproduction of material goods. Means of labor in the process of production wear out, objects of labor and consumer goods are consumed.

2. Reproduction of the labor force. The reproduction of the labor force in a broad sense means the preparation of a new generation of workers who have professional qualities.

3. Reproduction natural resources and human environment.

4. Reproduction of relations between people arising in production, distribution, exchange and consumption.

Reproduction has four phases: production, distribution, exchange and consumption.

Production - this is the starting point where the product is created, or rather , material goods and services. Therefore, it plays a decisive role in the life of society.

Distribution - phase of reproduction, where distribution, firstly, of the results of social production, and secondly, of resources or factors of production.

Exchange means exchange of activities between people and the exchange of products of labor.

Consumption - use of the product in the process of satisfying needs, the final phase of reproduction. Distinguish

· personal consumption - products are consumed.

· production consumption - the means of production and labor power are consumed, as a result of which products of labor are created.

All phases of reproduction are interconnected, interact, are in unity. The decisive role in this unity belongs to production. . Other phases are inconceivable without production. At the same time, distribution, exchange and consumption have an inverse effect on production.

Reproduction is divided into:

1. simple reproduction - product dimensions, as well as his quality stay every year unchanged. All surplus product goes for personal consumption. The factors of production remain unchanged.

2. extended reproduction -the size of the produced product and its quality increase. The factors of production also change.

The source of expanded reproduction is the surplus product. Extended reproduction has two types:

1) extensive type – involvement of additional labor, natural, basic and revolving funds without changing their technical basis.

2) intense - based on the improvement of the means of production and the growth of labor productivity.

The law of functioning of expanded production- this is the law of advanced production of means of production in comparison with the production of consumer goods.

Sometimes in society there is diminishing reproduction when observed decline in production due to natural Disasters, wars, destruction, ecological crises.

Economics considers the theoretical basis of reproduction circulation of economic benefits. Circulation refers to the process of movement of economic goods and Money between the subjects of the economy, ensuring the maintenance of the existence of each of them and the entire system as a whole.

At the same time, simple graphical models are used to visually illustrate the movement of flows of goods and income to the economic system (Fig. 2.2).

Rice. 2.2. The simplest model of the circulation of economic goods and resources

AT This model uses four types of production factors, with the help of which economic theory classifies the entire set of resources used in the economy: land, labor, capital and entrepreneurial ability. The prices paid for these factors are set in the resource market shown at the top of the chart. Here, firms act as demanders and households act as supply agents. Prices for finished goods and services are formed in the product market shown at the bottom of the diagram. Here already households act as demand bearers, and enterprises - as supply agents.

More close to reality is another version of the circulation model, which takes into account the role of the state (government) in the movement of goods and resources, which performs a regulatory role in the economy.

The main subjects of a market economy are firms, households, and the state. Between them there is a constant exchange of economic benefits and money.

households- These are relatively isolated economic units that own economic resources, including labor, which supply the economy with production factors and receive income in return.

Firms act as relatively separate economic units in which the factors of production are combined and finished products or services (goods) are produced for the purpose of making a profit.

State participates in the circulation both as one of the subjects of the market (entrepreneurial activity), and through the redistribution of income, forming the revenue and expenditure side of the budget. In the latter case, it receives goods and services, consumption

which is associated with the functioning of the state, as well as support for disabled members of society.

Reversible Special attention on the trail Yu the most important aspects of this process.

/. The flows of money and economic goods in their value terms during the circulation are always equal in magnitude (balanced) and opposite in direction. The reason for this is obvious: each economic entity pays for an economic good an amount exactly equal to its market price.

2. Since the expenditure of one subject is the income of another, and vice versa, then all budgets are interconnected. This is the reason for the isolation of the reproductive process.

axiom of circulation, thing is the magnitude of the flows of economic goods circulating in the national economy is unchanged at all stages of its movement. That is, according to this axiom of circulation, the flows of economic benefits in each of the phases of reproduction will be quantitatively equal.

Strictly speaking, equality is observed in three spheres (production, distribution, consumption), and not in four. After all, the exchange does not cover all the goods produced, some of them are used by the producer himself and do not enter the market. However, the axiom is not violated in relation to the sphere of exchange: the sum of goods received and not received in the sphere of exchange still corresponds to the total volume of production. When the manufacturer himself consumed his product, we can conditionally consider that he sold it to himself. Distributed (and subsequently redistributed) can only be those economic benefits that have previously been produced. And each subject of the economy consumes goods only to the extent that they got to him in the course of distribution (redistribution).

There are two polar mechanisms for the distribution of resources: a command (centrally planned) economy, when all decisions on the use of resources and the distribution of products are made by the will of a single central body, and a market economy, when the distribution of resources is carried out by independent decisions and actions of independent economic agents. In a command economy, what, how and for whom to produce is decided by the central government. But what about the market economy? After all, economic agents, when making certain decisions, are guided only by their own interests. If these decisions are not coordinated by society, how can society influence them? However, an attentive reader of the previous three issues of "ESH" has probably already guessed - through prices. And indeed it is.

Let's try to build the simplest model of the functioning of a market economy. Let us first deal with those who are economic agents. These are, of course, producers (firms) and consumers (households). However, they now have a noticeable increase in hassle.

Note that the basis of a market economy is private ownership in general and private ownership of resources in particular. Labor belongs to the bearer of labor, land to the landowner, even the firms themselves, with their productive capacities, ultimately belong to particular people. Thus, each household is the owner of some of the factors of production: almost certainly labor, and sometimes land and capital. Some of these resources are consumed in the households themselves, but what happens to the rest? They are offered by households for sale in the market. Who is the buyer in this market? Of course, firms that demand resources in order to make goods out of them for sale in another market - in the already known market for goods, where the buyers are in turn households. The circle closes (see diagram - figure).

Circulation of money and economic benefits in a market economy.

Consumers sell their resources to buy goods in the market and satisfy their needs. Producers buy resources to sell the goods they produce and make a profit.

Note that through the system of prices in the market of goods and services it is determined what to produce, and in the resource market - how to produce. With the question: for whom to produce? - the situation is somewhat more complicated. In the resource market, only the price of a resource unit is determined, that is, the amount of money that each owner receives for the sale of this unit.

However, the question of the distribution of the resources themselves between households remains outside the framework of the model under consideration (however, as well as economic theory in general).

If you look closely at the diagram, it will become clear that so far we have dealt only with its upper half, that is, with the market for goods. Indeed, in vol. 2 "ESh" we studied the demand of consumers for goods and services, without saying anything about where it comes from and what determines the income of consumers. In issue 3, we considered the behavior of producers in commodity markets, and considered the prices of resources as given from the outside. It is now clear that consumer income and resource prices are determined in the lower half of the scheme, the resource market.

Note that, in principle, we could build the study of microeconomic theory according to a different scheme, dividing the figure into two parts by an imaginary line - not horizontal, as we did, but vertical.

In this case, we would first consider the household as buyer and seller, and then the firm as seller and buyer. We took a different path, considering first the household as the buyer and the firm as the seller. Therefore, it remains for us to study the household as a seller and the firm as a buyer, to which this issue of "ES" will be fully devoted.

After that, in the next, 5th, issue, we will be able to consider the market for all goods and resources at the same time (ie, the entire figure), by analyzing the conditions in which this market is in equilibrium. We will even go a little further and for the first time try to assess how "well" this market works, that is, how it copes with the task of allocating resources and how it answers the three questions we have posed: what? as? for whom?

But this is ahead, but for now we are waiting for the resource market. Generally speaking, studying the market for resources, after the market for goods has already been studied, turns out to be somewhat simple. Firstly, because the same technical apparatus of supply and demand curves is used and, secondly, because assumptions have already been made about what is the driving force and criterion for choosing economic agents. The consumer maximizes his utility, and the producer maximizes his economic profit.

Indeed, the mechanism of supply and demand operates in factor markets in exactly the same way as in commodity markets. However, the very formation of supply and demand in factor markets has some peculiarities. So, on the demand side, the peculiarity here is that the demand for resources is a derivative demand, that is, it is determined by the demand for a product in the production of which this resource is used (see lecture 32).

Features of supply in the markets of land, labor and capital are discussed in lectures 36, 37 and 38, respectively.

Of course, the diagram of the functioning of a market economy shown in the figure is just a very simplified model, which abstracts from many real processes and phenomena. However, this model turns out to be quite useful for the student of economics, just as it is useful for a traveler geographic map, although it does not reflect all the features of the area.

What remains outside the framework of the model under consideration? Let's name the two most important moments for us.

First, in fact, not all used resources are offered to the market by households. Consumers supply firms with only so-called primary resources (for example, labor of a worker, land for the construction of a hotel).

The rest of the inputs (nails, photocopiers, oil tankers, etc.) are supplied to one firm by another. In our model, where all production was aggregated into a single manufacturing sector of the economy, there was no place to reflect this phenomenon.

Note that only the supply in the markets of primary resources has its own specific differences from the supply in the commodity market. In the markets of all other resources, the supply is formed in exactly the same way as in the commodity markets, it’s just that the company offers for sale not a consumer good, but a production resource.

Second, the "pure" market economy that we have modeled does not really exist.

Even the most liberal state regulates the market to some extent, and this especially applies to the resource market.

This is understandable: after all, it is in the resource market that the income of members of society is determined, which means that this issue is at the very center of public interests. That's why state regulation, for example, the labor market (the main source of livelihood for the vast majority of people in any society) in the form of establishing a minimum wage, a maximum working day, etc. - a very common thing even in the most "market" countries.

I. ECONOMIC THEORY

1. The structure of needs. Limited resources. economic circuit

Economics primarily studies economic needs and ways to meet them.

Economic Needs – it is the lack of something necessary for the maintenance and development of the individual, the firm and society as a whole.

Exactly economic needs act as an internal stimulus for active human activity. Needs are divided into primary, satisfying the vital needs of a person (food, clothing, etc.), and secondary, which include all other needs (for example, leisure needs: cinema, theater, sports, etc.).

Means that satisfy needs are called benefits.

Some of them are available in almost unlimited quantities (for example, air), others - in a limited amount. The latter are called economic goods. They are made up of things and services.

Economic goods are divided into long-term, involving reusable use (car, book, electrical appliances, videos, etc.), and short-term, disappearing in the process of one-time consumption (bread, meat, drinks, matches, etc.). Among the benefits, there are interchangeable (substitutes) and complementary (complimentary) goods. Substitutes include not only many consumer goods and production resources, but also transport services (train - plane - car), leisure activities (cinema - theater - circus), etc. Examples of complementary goods are a table and a chair, a car and gasoline, a pen and paper. Economic benefits can also be divided into present and future, direct (consumer) and indirect (production).

Economic resources (or factors of production) are the elements used to produce economic goods. The most important of them in modern society are land, labor, capital (including its organization), entrepreneurial ability and information. . 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.

Economic goods do not move by themselves. They act as a means of communication between economic agents. Economic agents- subjects of economic relations involved in the production, distribution, exchange and consumption of economic goods. The main economic agents are individuals (households), firms, the state and its subdivisions. In turn, among the firms, first of all, individual business enterprises, partnership enterprises and corporations are distinguished. Modern economic theory proceeds from the premise of the rational behavior of agents. This means that the goal is to maximize results for a given cost or minimize costs for a given result. Individuals strive to maximize the satisfaction of needs at given costs, the state - to the highest growth public welfare with a certain budget. For example, trade unions also act as economic agents, the purpose of which is to increase wages and improve the social conditions of life of their members, the means is the struggle for favorable conditions for concluding collective agreements.

In modern theories developing the principles classical liberalism, the only real economic agent is the individual. All other agents are regarded as derivative forms of it: firms as legal fictions, and the state as an agency for the specification and protection of property rights.

Economic agents communicate with each other with the help of economic goods. Their movement forms a kind of circulation.

economic circuit- this is a circular movement of real economic benefits, accompanied by a counter flow of cash income and expenses.

The main subjects of the market economy are households and firms. Households make demand for consumer goods and services, being at the same time suppliers economic resources. Firms demand resources by offering consumer goods and services. The behavior of the main economic agents can be expressed by the circulation of supply and demand (Fig. 1.1).

For all the conventionality of the circuit scheme, it reflects the main thing - in a developed market economy there is a constant interaction of supply and demand: demand creates supply, and supply develops demand.

Rice. 1.1. The cycle of supply and demand

The cycle of supply and demand can be specified taking into account the movement of resources, consumer goods and incomes. Household demand is expressed in terms of expenditures made in the markets for consumer goods and services. The sale of these goods and services is the revenue of firms. Buying the resources needed to do this means a cost to the firm. Households, supplying the necessary resources (labor, land, capital, entrepreneurial ability), receive cash income (wages, rent, interest, profit). Thus, the real flow of economic benefits is supplemented by a counter cash flow of income and expenses (Fig. 1.2).

Rice. 1.2. Market circulation of goods and income