The increase in consumption leads to the fact that people need a large amount of goods. Increasing demand creates supply. Factories work around the clock in order to meet the national and international needs of the growing population of the Earth. To measure the volume of output, there are already few standard values, such as gross national product. Modern realities require the introduction of additional international measures of measurement, such as the aggregate social product.
The value reflects the volume of production in society on a global scale. The concept of social product allows you to evaluate the movement of capital, labor and the volume of produced material products.
Definition
The totality of all goods and services developed by the company for the reporting period of time is an aggregate social product (SOP). The indicator is generalizing and does not make allowance for a variety of goods (goods, services). All tangible or intangible things made by people are accepted for accounting: soap, legal services, wheat, maintenance, fabrics, machines, etc.
For the calculation of SOPs, the consumer need is not taken, that is, the account should be taken not of the goods (service) consumed by the final buyer, but of the produced one, regardless of whether the product was sold to the final consumer or not.
When calculating SOPs, services rendered free of charge are not taken into account. For SOP purposes, only paid analogues are suitable.
SOP structure
The total social product by structure is divided into value and material (natural) forms.
The natural, or material, structure includes the entire volume of consumption services, manufactured products, and means of production:
- Produced products are all products created by industrial enterprises and having a material (material) form. Simply put, this is a product that is intended for human consumption in everyday life.
- Means of production are material and improvised means used for the manufacture of goods. For example, a brick for construction is a material for building the walls of a house, that is, a means of consumption for the final product, in this case, the house.
In some cases, a thing can turn out to be both a production product and a means of production at the same time. Tomato is itself a manufactured agricultural product and can be sold to the end customer. 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 costs of equipment repair, remuneration of workers involved in the process, and more.
The value form of the aggregate social product is the monetary expression of the goods produced. It consists of:
- carry-over 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 - the money spent on meeting the needs of workers involved in the production of goods. Plus the money 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. SOP for functional purpose is divided into a reimbursement fund and national income:
- The reimbursement fund is a component of the aggregate product intended to restore the means of production and commodities in natural-material (material) form.
The functions of the reimbursement fund are as follows:
- the creation of the means necessary for the manufacture of other means of production (for example, machines 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 - this is part of the SOP, which is the aggregate of all services and goods produced in the reporting period in monetary terms. Its main function is the ability to express SOP in the form of money. This allows government agencies to fulfill the function of distributing the country's income.
SOP Reproduction
Reproduction of the aggregate social product occurs through the continuous production of commodities and luxury. There are two forms of reproduction: simple and expanded.
The first is characterized by a continuous process of restoring consumption products in an amount equal to the amount of consumed products. With an expanded form, the restoration of articles for consumption occurs in increasing sizes.
As a result of the reproduction of national income, the following functions are provided:
- the resumption of labor of workers employed in production;
- reproduction and formation of reserves, including insurance;
- supply and improvement of the sphere of intangible production.
The functions of SOPs ultimately consist in creating expanded reproduction, as a result of which the national wealth of each country is formed.
The formula for calculating SOP K. Marx
There are several ways to calculate the total social product. The first SOP formula was derived by Karl Marx:
SOP = P + PS + Z, where:
R - 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 an employee, exceeding the value of his labor force).
C - the costs associated with the payment of labor.
Fund Amount Formula
The value of SOPs can be learned by adding up the value of all the benefits. So the formula for the total social product can be represented as the sum of public funds in monetary terms:
SOP = SPS + SFP + (SPS), where:
SPV - the cost of the reproduction fund.
TFP is the value of the consumption fund.
SNP - the value of the accumulation fund. Since this fund appears only in conditions of expanded reproduction of SOPs, with a simple form of reproduction, the latter will be equal to the sum of PV and FP.
The consumption fund and the accumulation fund of society are a pure social product.
Western model
It is a modified formula of K. Marx. The advantage is its granularity, which allows for a more accurate calculation:
SOP = AI + FI + D + DI
AI - costs of use, CI - additional costs, FI - factorial costs, D - total income of entrepreneurs.
Indicators
Since SOP is a generalizing quantity, in practice its individual indicators are often used. The total social product includes:
- Gross social product - the value expression of SOP. It represents the sum of the costs of all produced material goods and the costs associated with their production (raw materials).
- Gross domestic product - the total value of goods and services produced within each country. Reflects the total cost of final services and products.
- Gross national product expresses the total value of the final goods, but unlike GDP, all goods are taken into account, even beyond its borders.
- The final social product is all the benefits that the end consumer acquires for use, not resale.
Distribution
The distribution process of the aggregate social product is implemented through 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 a particular region.
National wealth, reproduction and distribution are interconnected by general principles. All these indicators affect each other equally. The higher the national wealth, 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 larger the social product and the speed of its reproduction, the faster the increase in national wealth occurs and the goods are distributed among end consumers.