The world economy is a multi-level complex system consisting of many elements. It is based on the international and limited to the framework of individual countries national production of goods, their distribution, exchange and consumption.
The international economy is the global and national markets of sales, labor, finance, which are in constant motion, connected with each other, subject to objective laws of management. It is formed by states with different social structures, the level of development of production relations and productive forces, and political structure.
Domestic market
One of the main conditions for its formation is the division of labor. It originated in ancient times. Humanity has gone through several stages of the division of labor.
The first was the separation of livestock from agriculture. At the second stage, craft separated and became an independent economic industry. At the next stage, merchants arose. The development of the national market was subsequently accompanied by even greater fragmentation of industries, specialization of production. This process is endless and objectively associated with increased productivity.
Exchange
Any division of labor is accompanied by exchange. In ancient times, pastoralists needed agricultural products, and farmers needed livestock products.
At first, the exchange took place within a separate community and had primitive forms. Over time, intercommunal relations began to be established.
Before the appearance of money, the exchange was carried out exclusively by goods or services. He was still far from the real domestic market . If the interests of the buyer and seller did not coincide, had to seek a compromise. Often people made several exchanges to get what they wanted for their product.
Thanks to the development of exchange, money arose. Their appearance provided incentives for the manufacture of products exclusively for sale. In other words, production arose on the national market. This , in turn, contributed to the intensification of exchange between states.
Autonomy of manufacturers
Another key condition for the formation of the national market is the isolation of producers. Each economic entity should be able to strive to ensure part of its own interests. At the same time, there should be a clear division of labor between producers.
Every business entity wants to receive for its product an equivalent amount of any other product. Such a desire is formed on the basis of isolation and economic limited interests. She, in turn, arises on the basis of private property relations.
Subsequently, private property began to rely on collective relations, limited to a certain range of interests. So there were partnerships, cooperatives, joint-stock companies, state enterprises.
Commodity production
The deepening division of labor has led to the development of specialization and cooperation of production. At a certain stage in the development of subsistence farming, self-sufficiency was not enough to satisfy the growing needs of a large society. In this regard, different groups of manufacturers began to specialize in a specific product, which was offered in exchange for other products in the national market. This practice led to the destruction of the natural form of management and the transition to commodity production.
At the initial stage, the manufacturer of the product passed it directly to the consumer. This form of the domestic market is considered the simplest. Subsequently, the connection between the manufacturer and the final buyer began to be provided by intermediaries - trading enterprises.
Market definition
In the forgiven sense, it can be considered as a place of exchange (trade) of services and goods. According to the ideas of Soviet people, the national market is a place of sale of agricultural products, a fair or a bazaar.
Wholesale and retail enterprises have not been accepted to be assigned to the market before. Hence the distorted idea of him, even in a simple sense. Meanwhile, if we consider the market as a place of sale, then there is no difference in what space it takes place.
In a generalized sense, the market is the totality of trading processes, regardless of the place in which they occur. Buying and selling is, in fact, the process of connecting the seller and the buyer. It is characterized by various features: type of product, sales volume, price level, method of trade, etc.
According to the third, universal interpretation, the market is associated with the economy as a whole and becomes a reduction in the concept of "market economy".
State involvement
Market - a complex of commodity-money relations that arise when buying and selling products and services. These relations arise between three key actors - the state, business representatives and households (consumers).
Any country has a state economic policy. Its specificity depends on different conditions and factors. The state, acting as a subject of economic relations, acts through a system of state institutions, budget organizations. They carry out the functions of state regulation. In the modern world, the implementation of state economic policy is aimed at ensuring a balance of interests between consumers and sellers (producers).
At the same time, the state represented by the government is a direct participant in the sale. In the main market segments, it buys the resources necessary for itself. So, in the labor market, the government acquires the labor force that is necessary for service in state institutions and budget organizations; on the market of production assets and consumer goods, the procurement of goods of mass and special use is carried out, including weapons, structures, equipment, etc.
Business representatives
Producers work to generate income. They are considered key providers of services and products. In some cases, they sell their own material assets, including land and buildings on the real estate market. This situation, however, is the exception rather than the rule.
In the modern economy, a variety of enterprises operate: mining, processing, manufacturing, trading, serving. Other enterprises, households, and the state act as buyers. At the same time, enterprises themselves in some cases become consumers. In the labor market, they acquire labor resources, semi-finished products - from other manufacturers. In addition, they can buy money in the form of securities and loans.
Household
It is an economic structure consisting of one or more people and functioning in the consumer sector. Households can sell their labor, goods, land, property, capital, other types of goods and services. However, to ensure their livelihoods, they purchase certain products, use the necessary services.
Structure
The main elements of the modern national market are the markets:
- Production facilities.
- Commodities.
- Securities, currency and money.
- Paid services.
- Labor
- Information and scientific and technological developments.
- Real estate.
- Capital.
Each element, in turn, consists of several parts. For example, within the framework of the consumer market, there is a market for dairy products, clothing, etc.
What is the labor market ?
Any enterprise needs labor. Its acquisition is carried out in an economic environment, within the framework of which, as a result of competition between agents, a certain level of employment and payment for professional activity is formed through the establishment of a supply-demand ratio. Such an economic environment is called the labor market.
What is the demand for labor? It is determined by the needs of enterprises (employers) in one or another number of employees with the necessary qualifications for the production of services and goods. Between demand and the rate of real earnings, an inverse relationship is established. Real salary is the ratio of nominal salary to price level.
Labor supply depends on the population, the proportion of able-bodied citizens in it, the average number of hours worked per year, the quality of work and the qualifications of the staff. The determining factor is the level of salary.
The essence and functions of the labor market
The labor market is seen as a multifaceted sphere of economic and political life. In this environment, labor receives a valuation, determines the conditions of employment, the amount of earnings, job security, the possibility of professional growth, etc.
Market functions are determined by the value of work in the life of the population. In economic terms, labor is one of the key production factors. Accordingly, 2 main functions can be distinguished:
- Social. It consists in ensuring a normal level of income and well-being of each person, reproduction of the abilities of workers.
- Economic. It consists in the rational distribution, regulation, involvement and use of labor in production.
Real estate market
It is considered one of the most promising economic environments. The real estate market is a complex of relations related to operations with structures, land, buildings, etc. As part of transactions, investments are made in objects. The resulting relations in the complex are an element of the national financial market .
Components and classification
The real estate market consists of several segments. Segmentation refers to the division of the economic environment into groups according to homogeneous indicators. In the real estate market there are markets:
- Residential objects.
- Of the earth.
- Non-residential premises.
In general, the market is divided into:
- City housing stock. It, in turn, is divided into low-quality residential premises, typical objects, residential buildings of improved layout, luxury apartments.
- Suburban real estate market. It began to form actively after the removal of restrictions on individual suburban development.
There are fewer operations on the market of non-residential objects than with residential premises. However, their cost is quite high, which makes this segment very attractive.
Investment activities
It is inextricably linked with the analysis of the state and forecasting the development prospects of the investment market. Its key elements are demand, price, supply.
The investment market is a complex of economic relations between the seller and the buyer arising from the objects in which the funds are invested.
A key driver in this economic environment is competition. The subjects of the investment market are the state, enterprises, organizations, institutions (including non-economic), households.
The modern investment market provides an increase in the material well-being of the country and the involvement of the maximum amount of entrepreneurial capital in circulation. Its formation was associated with the desire to profit from capital. In the investment market there are various products, investment in which allows you to earn income.
Conclusion
Existing market relations have a great influence on all spheres of life. Through constantly changing prices, interest rates on loans, production participants receive relevant and objective information about goods and services: their quantity, quality, and assortment necessary for society.
Autonomous producers, in order to make a profit, need to find each other, establish a connection with the consumer. Without a market, it is impossible to determine the level of mutual benefit of a particular connection.
In a market economy with developed competition, the buyer has the opportunity to choose the optimal manufacturer (supplier). However, the seller may choose the appropriate acquirer.
Services and products of one purpose, entering the market, contain different amounts of material and labor costs. However, only socially necessary expenses are recognized on the market. Only their buyer is willing to pay.
The market affects all economic spheres. First of all, the impact is on the manufacturing sector. The market provides participants with information on what, for whom and how to produce. In this case, trade is impossible without competition.
In market regulation, the balance of supply and demand is of particular importance, which has a significant impact on the cost of products and services. With an increase in value, production expands, with a decrease, it decreases.