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
economic activity is based on
directly maximizing use-value
through conscious economic planning, where monetary relations in the form of exchange-value and wage labor cease to exist out. Socialism is
characterized by the working-
class 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. [1] Mode of production Socialism is a post-commodity 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.[2] 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.[3] Intermediate phases The period in which capitalism
becomes increasingly insufficient
as an economic system and
immediately after the proletarian conquest of the state, 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". 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.[4] 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.[5] 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".[6] 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.[7] 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.
