Total social product: definition, structure, indicators, distribution

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

Growth in consumption leads to the fact that people need a large amount of goods. Increasing demand creates supply. Factories are working around the clock to meet the national and international needs of the growing population of the Earth. To measure the volume of output, there are no longer enough standard values, such as the gross national product. Modern realities require the introduction of additional international measures of measurement, such as the total social product.

The value reflects the volume of products produced in the society on a global scale. The concept of a social product allows you to evaluate the movement of capital, labor force and the volume of produced material products.

Definition

The totality of all goods and services produced by society over the reporting period of time is the total social product (SOP). The indicator is general and does not adjust for the type of goods(goods, services). Any tangible or intangible things produced by people are taken into account: soap, legal services, wheat, maintenance, fabrics, cars, etc.

To calculate the SOP, consumer need is not taken, that is, the goods (services) consumed by the end customer should not be accounted for, but the goods produced, regardless of whether the product was sold to the end consumer or not.

When calculating the SOP, services provided free of charge are not taken into account. Only paid analogues are suitable for SOP purposes.

SOP structure

The structure of the total social product is divided into cost and real (natural) forms.

The natural, or real, structure includes the entire volume of consumption services, produced products, and means of production:

1. Manufactured products are all products created by industrial enterprises and having a material (material) form. Simply put, it is a product that is intended for human consumption in everyday life.
2. Means of production are the material and tools used to make goods. For example, a building brick is a material for building the walls of a house, that is, a means of consumption for the final product, in this case, a house.

In some cases, a thing can be both a production product and a means of production at the same time. Tomatois itself a manufactured product of agriculture and can be sold to the final buyer. If the same tomato is used for the production of tomato paste, then it becomes a means of consumption. Now about intangible products.

Consumer services are all intangible goods used in the production process. These include the cost of repairing equipment, wages for workers involved in the process, and more.

The value form of the total social product is the monetary expression of the goods produced. It consists of:

• transfer value is the sum of the means of production spent. It is equivalent to the cost of depreciation of the means of production;
• new value - money spent to meet the needs of workers involved in the production of goods. Plus the money that is spent on the development and expansion of production.

Functions

The total social product is the ultimate goal of social production, regardless of the applied economic system. The functional SOP is subdivided into compensation fund and national income:

The compensation fund is a component of the total product, designed to restore the means of production and consumer goods in natural-material (material) form

The functions of the compensation fund are as follows:

• creating the same funds needed tomanufacture of other means of production (for example, machine tools for machine-building plants);
• creation of the means of production necessary for the manufacture of consumer goods (for example, equipment for the textile or food industry).

2. National income is a part of the SOP, which is the totality of all services and goods produced during the reporting period in monetary terms. Its main function is the ability to express the SOP in the form of money. This allows government agencies to fulfill the function of distributing the country's income.

Reproduction of SOPs

Reproduction of the total social product occurs through the continuous production of consumer goods and luxury. There are two forms of reproduction: simple and extended.

The first is characterized by a continuous process of restoration of consumer products in an amount equal to the quantity of consumed products. In the extended form, the recovery of items for consumption occurs in increasing amounts.

As a result of the reproduction of the national income, the following functions are provided:

• resumption of work of workers employed in production;
• reproduction and formation of reserves, including insurance;
• supply and improvement of the sphere of non-material production.

The function of the SOP is ultimately to create expanded reproduction, as a result of which the national we alth of each country is formed.

Formula for calculating SOP by K. Marx

There are several ways to calculate the total social product. Karl Marx was the first to formulate SOP:

SOP =R + PS + G where:

P - material costs of production (means of production and commodities).

PS - surplus value (according to K. Marx: the value created by the unpaid labor costs of the worker, exceeding the cost of his labor force).

З – labor costs.

Formula for the amount of funds

The cost of SOP can be found by adding the value of all goods. So the formula for the total social product can be represented as the sum of public funds in monetary terms:

SOP=SPV + SFP + (SFN), where:

SFV - the value of the reproduction fund.

SFP is the value of the consumption fund.

SNP - the value of the accumulation fund. Since this fund appears only under conditions of expanded reproduction of the SOP, then with a simple form of reproduction, the latter will be equal to the sum of PV and FP.

The consumption fund and the social accumulation fund are a net social product.

Western style

Is a modified formula of K. Marx. The advantage is its detail, which allows you to make a clearer calculation:

SOP=AI + PHI + D + CI

AI - usage costs, CI - incremental costs, FI - factorial costs, D - total income of entrepreneurs.

Indicators

Because SOP isgeneralizing value, in practice, its individual indicators are often used. The total social product includes:

• Gross social product - cost expression of SOP. It is the sum of the costs of all produced material goods and the costs associated with their production (raw materials, materials).
• Gross domestic product - the total value of goods and services produced within each particular country. Reflects the total cost of final services and products.
• Gross national product expresses the total value of final goods, but unlike GDP, all goods are taken into account, even outside of it.
• The final social product is all the goods that the final consumer acquires for use, not resale.

Distribution

The process of distribution of the total social product is realized through a continuous commodity exchange. Distribution is the link between the production and sale of goods. This process is considered decisive in the development of socio-economic relations and underlies trade. From the point of view of society, all goods should be distributed evenly, but in reality everything turns out differently. Due to the surplus value and the difference in the economic development of individual regions, the total product is distributed depending on the welfare of the population of this particular region.

National we alth, reproduction and distribution are interconnected by common principles. All these indicatorsinfluence each other equally. The higher the national we alth, the greater the mass of the total product and the higher the satisfaction of the general needs of the population, the greater the process of reproduction of goods.

And vice versa, the greater the social product and the speed of its reproduction, the faster the growth of national we alth and the goods are distributed among final consumers.