Socialism (Marxism)
Encyclopedia
In Marxist theory, socialism, or the socialist mode of production, refers to a specific historical phase of economic development and its corresponding set of social relations that eventually supersede capitalism
. Socialism is a mode of production where criteria for economic activity is use-value and direct production for use
through conscious economic planning
, where monetary relations in the form of exchange-value and wage labor become irrelevant. Socialism is characterized by the working-class's effectively controlling the means of production
and the means of their livelihood either through cooperative enterprises or public ownership (with the state being re-organized under socialism) and self management.
economic system, meaning production is carried out to maximize use-value (to directly satisfy human needs, or demand) rather than to exchange on the market to generate a profit (to maximize exchange-value). The stage in which the accumulation of capital was viable and effective is rendered insufficient at the socialist stage of social and economic development, leading to a situation where production is carried out independently of capital accumulation in a planned fashion.
Planning can refer to democratic participatory planning
, industrial democracy
or administrative economic planning
. Instead of relying on the coercive forces of the market to compel capitalists to produce use-values as a byproduct in the pursuit of exchange-value, socialist production is based on the rational planning of use-values and coordinated investment decisions to attain economic goals. As a result, the cyclical fluctuations
that occur in a capitalist market economy will not be present in a socialist economy. The value of a good in socialism is its physical utility rather than its embodied labor, cost of production and exchange value as in a capitalist system.
The advanced stage of socialism, referred to as "upper-stage communism" in Marxist theory, is based on the socialist mode of production but is differentiated from socialism in a few fundamental ways. While socialism implies public ownership (by a state apparatus) or cooperative ownership (by a worker cooperative enterprise), communism would be based on common ownership
of the means of production. Class distinctions based on ownership of capital cease to exist, along with the need for a state. A superabundance of goods and services are made possible by automated production that allow for goods to be distributed based on need rather than merit.
, an economic system that features elements of both socialism and capitalism will probably exist until both the productive forces of the economy and the cultural and social attitudes develop to a point where they satisfy the requirements for a full socialist society (one that has lost the need for monetary value, wage labor and capital accumulation). Specifically, market relations will still exist but economic units are either nationalized or re-organized into cooperatives. This transitional phase is sometimes described as "state capitalism
" or "market socialism
".
Inequality and incentive-based systems would still exist under socialism, but to a diminishing extent as all members of society are de facto workers. This eliminates the severity of previous tendencies towards inequality and conflicts arising from these. The method of compensation and reward in a socialist society would be based on an authentic meritocracy, along the principle of "from each according to his ability, to each according to his contribution
".
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
. Socialism is a mode of production where criteria for economic activity is use-value and direct production for use
Production for use
Production for use is a defining criterion of a socialist economy and distinguishes socialism from capitalism...
through conscious economic planning
Economic planning
Economic planning refers to any directing or planning of economic activity outside the mechanisisms of the market, in an attempt to achieve specific economic or social outcomes. Planning is an economic mechanism for resource allocation and decision-making in contrast with the market mechanism...
, where monetary relations in the form of exchange-value and wage labor become irrelevant. Socialism is characterized by the working-class's effectively controlling the means of production
Means of production
Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth — along with both infrastructural capital and natural capital. This includes the classical factors of production minus financial capital and minus human capital...
and the means of their livelihood either through cooperative enterprises or public ownership (with the state being re-organized under socialism) and self management.
Mode of production
Socialism is a post-commodityCommodity (Marxism)
In classical political economy and especially Karl Marx's critique of political economy, a commodity is any good or service produced by human labour and offered as a product for general sale on the market. Some other priced goods are also treated as commodities, e.g...
economic system, meaning production is carried out to maximize use-value (to directly satisfy human needs, or demand) rather than to exchange on the market to generate a profit (to maximize exchange-value). The stage in which the accumulation of capital was viable and effective is rendered insufficient at the socialist stage of social and economic development, leading to a situation where production is carried out independently of capital accumulation in a planned fashion.
Planning can refer to democratic participatory planning
Participatory planning
Participatory planning is an urban planning paradigm that emphasizes involving the entire community in the strategic and management processes of urban planning; or, community-level planning processes, urban or rural...
, industrial democracy
Industrial democracy
Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decision-making process, in organizations employing industrial...
or administrative economic planning
Economic planning
Economic planning refers to any directing or planning of economic activity outside the mechanisisms of the market, in an attempt to achieve specific economic or social outcomes. Planning is an economic mechanism for resource allocation and decision-making in contrast with the market mechanism...
. Instead of relying on the coercive forces of the market to compel capitalists to produce use-values as a byproduct in the pursuit of exchange-value, socialist production is based on the rational planning of use-values and coordinated investment decisions to attain economic goals. As a result, the cyclical fluctuations
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
that occur in a capitalist market economy will not be present in a socialist economy. The value of a good in socialism is its physical utility rather than its embodied labor, cost of production and exchange value as in a capitalist system.
The advanced stage of socialism, referred to as "upper-stage communism" in Marxist theory, is based on the socialist mode of production but is differentiated from socialism in a few fundamental ways. While socialism implies public ownership (by a state apparatus) or cooperative ownership (by a worker cooperative enterprise), communism would be based on common ownership
Common ownership
Common ownership is a principle according to which the assets of an enterprise or other organization are held indivisibly rather than in the names of the individual members or by a public institution such as a governmental body. It is therefore in contrast to public ownership...
of the means of production. Class distinctions based on ownership of capital cease to exist, along with the need for a state. A superabundance of goods and services are made possible by automated production that allow for goods to be distributed based on need rather than merit.
Intermediate phases
The period in which capitalism becomes increasingly insufficient as an economic system and immediately after the proletarian conquest of the stateProletarian revolution
A proletarian revolution is a social and/or political revolution in which the working class attempts to overthrow the bourgeoisie. Proletarian revolutions are generally advocated by socialists, communists, and most anarchists....
, an economic system that features elements of both socialism and capitalism will probably exist until both the productive forces of the economy and the cultural and social attitudes develop to a point where they satisfy the requirements for a full socialist society (one that has lost the need for monetary value, wage labor and capital accumulation). Specifically, market relations will still exist but economic units are either nationalized or re-organized into cooperatives. This transitional phase is sometimes described as "state capitalism
State capitalism
The term State capitalism has various meanings, but is usually described as commercial economic activity undertaken by the state with management of the productive forces in a capitalist manner, even if the state is nominally socialist. State capitalism is usually characterized by the dominance or...
" or "market socialism
Market socialism
Market socialism refers to various economic systems where the means of production are either publicly owned or cooperatively owned and operated for a profit in a market economy. The profit generated by the firms system would be used to directly remunerate employees or would be the source of public...
".
Social relations
As a set of social relationships, socialism is defined by the degree to which economic activity in society is planned by the associated producers, so that the surplus product of the population is controlled by a majority of the population through democratic processes. The sale of labor power is abolished so that every individual participates in running their institution and no one controls anyone else. The incentive structure changes in a socialist society given the change in the social environment, so that an individual laborers' work becomes increasingly autonomous and creative, creating a sense of responsibility for his or her institution as a stakeholder. The individual is no longer alienated from his or her work; work now becomes a means by which the individual fulfills his or her humanity (pursues his or her interests).Inequality and incentive-based systems would still exist under socialism, but to a diminishing extent as all members of society are de facto workers. This eliminates the severity of previous tendencies towards inequality and conflicts arising from these. The method of compensation and reward in a socialist society would be based on an authentic meritocracy, along the principle of "from each according to his ability, to each according to his contribution
To each according to his contribution
To each according to his contribution is considered by socialists and Marxist socialists as a characteristic of society directly following the transition to socialism, but preceding the final step to communism...
".
Role of the state
In Marxist theory, the state is a mechanism dominated by and utilized in the interests of the ruling class to subjugate other classes, to legitimize the existing socio-economic system and to promote the interests of the dominant class. After a workers' revolution, the state initially becomes the instrument of the working class. Conquest of the state apparatus by the working class must take place to establish a socialist system. As socialism is built, the role and scope of the state changes as class distinctions (based on ownership of the means of production) gradually deteriorate due to the concentration of means of production in state hands. From the point where all means of production become state property, the nature and primary function of the state would change from one of political rule (via coercion) over men by the creation and enforcement of laws into a scientific administration of things and a direction of processes of production; that is the state would become a coordinating economic entity rather than a mechanism of class or political control, and would no longer be a state in the Marxian sense.See also
- Capitalist mode of productionCapitalist mode of productionIn Marx's critique of political economy, the capitalist mode of production is the production system of capitalist societies, which began in Europe in the 16th century, grew rapidly in Western Europe from the end of the 18th century, and later extended to most of the world...
- CommunismCommunismCommunism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
- Economic planningEconomic planningEconomic planning refers to any directing or planning of economic activity outside the mechanisisms of the market, in an attempt to achieve specific economic or social outcomes. Planning is an economic mechanism for resource allocation and decision-making in contrast with the market mechanism...
- MarxismMarxismMarxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
- Marxian economicsMarxian economicsMarxian economics refers to economic theories on the functioning of capitalism based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology and sociological theory, arguing that Marx's approach to understanding the...
- Mode of productionMode of productionIn the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...
- Post-capitalismPost-capitalismPost-capitalism refers to any hypothetical future economic system that is to supersede capitalism as the dominant form of economic organization.-Post-capitalist systems:There have been a number of proposals for a new economic system to replace capitalism...
- Production for useProduction for useProduction for use is a defining criterion of a socialist economy and distinguishes socialism from capitalism...
- Relations of productionRelations of productionRelations of production is a concept frequently used by Karl Marx and Friedrich Engels in their theory of historical materialism, and in Das Kapital...
- Scientific SocialismScientific SocialismScientific socialism is the term used by Friedrich Engels to describe the social-political-economic theory first pioneered by Karl Marx. The purported reason why this socialism is "scientific socialism" is because its theories are held to an empirical standard, observations are essential to its...
- SocialismSocialismSocialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
- Socialist economicsSocialist economicsSocialist economics are the economic theories and practices of hypothetical and existing socialist economic systems.A socialist economy is based on public ownership or independent cooperative ownership of the means of production, wherein production is carried out to directly produce use-value,...
- Socialization of productionSocialization (economics)In economic discourse, socialization has several different but related connotations. In socialist economics, the term usually refers to the process whereby production is reorganized away from producing for private profit to producing goods and services directly for use, along with the end of the...