Editing Means of production (section)

== Marxism and Marxist theory of class ==
{{Marxian critique of political economy sidebar}}{{Marxism|Economics}}
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 [[Marxian critique of political economy|Marx's critique of political economy]], and later in [[Marxian economics]].

In Marx's work and subsequent developments in Marxist theory, the process of [[socioeconomic]] evolution is based on the premise of [[technological improvements]] in the means of production. As the level of technology improves with respect to productive capabilities, existing forms of [[Social relations of production|social relations]] become superfluous and unnecessary as the advancement of technology integrated within the means of production contradicts the established [[organization of society]] and its [[economy]].

The increasing efficiency of the means of production via the  creation and adaptation of new technologies over time has a tendency to rearrange local and global market structures, leading to the disruption of existing profit pools, creating the possibility of massive economic impact. [[Disruptive technologies]] can lead to the devaluation of various forms of labor power, up to the point of making human labor power economically noncompetitive in certain applications, potentially widening income inequality.<ref>{{Cite web|last=James|first=Manyika|date=2013|title=Disruptive technologies: Advances that will transform life, business, and the global economy|url=https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Disruptive%20technologies/MGI_Disruptive_technologies_Executive_summary_May2013.pdf |archive-url=https://web.archive.org/web/20200722183150/https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Disruptive%20technologies/MGI_Disruptive_technologies_Executive_summary_May2013.pdf |archive-date=2020-07-22|url-status=live|access-date=2021-04-25|website=www.mckinsey.com}}</ref>

According to Marx, escalating tension between the upper and lower class is a major consequence of technology decreasing the value of labor force and the contradictory effect an evolving means of production has on established social and economic systems. Marx believed increasing inequality between the upper and lower classes acts as a major catalyst of [[class conflicts]], which develop to a point where the existing mode of production inevitably becomes unsustainable, either collapsing or being overthrown in a [[social revolution]], at which point the contradictory relationship between technological advancement and the value of labor force is resolved by the emergence of a new mode of production based on a different set of [[social relations]] including, most notably, different patterns of ownership for the means of production.<ref>[http://www.marxists.org/glossary/terms/m/o.htm#mode-production Mode of Production]. Marxism.org</ref>

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]]. Capitalism is defined as private ownership and control over the means of production, where the surplus product becomes a source of [[unearned income]] 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.<ref>{{Cite book|last=Black|first=John|url=https://www.worldcat.org/oclc/970401192|title=Capitalism--A dictionary of economics|date=2017|others=Nigar Hashimzade, Gareth D. Myles|isbn=978-0-19-181994-0|edition=5|location=[Oxford]|oclc=970401192}}</ref>

=== 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, the U.S., 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]]'' 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]], comprises the majority of the population that lacks access to the means of production and are therefore induced to sell their [[labour power]] for a wage or salary to gain access to necessities, goods and services.<ref>{{cite book |last= Ishiyama, Breuning |first= John, Marijke|title= 21st Century Political Science: A Reference Handbook |publisher= SAGE Publications, Inc |date= October 22, 2010|quote= For Marx, class was defined by an individual’s relationship to the means of production...Class is determined by the extent to which people own most, some, or little of the means of production, or by their relationship to the means of production. It generally conflicts over control or access to the means of production that drives history. }}</ref>

According to Marx, wages and salaries are considered as the price of [[labour power]], 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.<ref>{{Cite book|last=Black|first=John|url=https://www.worldcat.org/oclc/970401192|title=Employee--A dictionary of economics|date=2017|others=Nigar Hashimzade, Gareth D. Myles|isbn=978-0-19-181994-0|edition=5|location=[Oxford]|oclc=970401192}}</ref> 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 tends 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.<ref>{{Cite journal|last1=Lazear|first1=Edward P.|last2=Shaw|first2=Kathryn L.|date=2007|title=Personnel Economics: The Economist's View of Human Resources|url=https://www.jstor.org/stable/30033753|journal=The Journal of Economic Perspectives|volume=21|issue=4|pages=91–114|doi=10.1257/jep.21.4.91|jstor=30033753|issn=0895-3309}}</ref>

To the question of why classes exist in [[human societies]] in the first place, Karl Marx offered a [[Marx's theory of history|historical]] and scientific explanation that it was the [[cultural practice]] 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]]. This explanation is consistent with the bulk of Marxist theory in which Politics and [[Marxism and religion|Religion]] are seen as mere outgrowths ([[base and superstructure|superstructures]]) of the basic underlying economic reality of a people.<ref>[http://www.marx2mao.com/M&E/SUS80.html Frederick Engels: Socialism: Utopian and Scientific Chapter III Historical Materialism] Marx2mao.com.  p. 74</ref>