Socialist mode of production

Karl Marx and Friedrich Engels
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In Marxist theory, socialism (also called the socialist mode of production) refers to a specific historical phase of economic development and its corresponding set of social relations that supersede capitalism in the schema of historical materialism. The Marxist definition of socialism is a mode of production where the sole criterion for production is use-value and therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning, while distribution of economic output is based on the principle of to each according to his contribution. The social relations of socialism are characterized by the working class effectively owning the means of production and the means of their livelihood, either through cooperative enterprises or by public ownership or private artisanal tools and self-management, so that the social surplus accrues to the working class and society as a whole.

This view is consistent with, and helped to inform, early conceptions of socialism where the law of value no longer directs economic activity, and thus monetary relations in the form of exchange-value, profit, interest and wage labor would not operate and apply to Marxist socialism.

The Marxian conception of socialism stands in contrast to other early conceptions of socialism, most notably early forms of market socialism based on classical economics such as mutualism and Ricardian socialism. Unlike the Marxian conception, these conceptions of socialism retained commodity exchange (markets) for labor and the means of production, seeking to perfect the market process. The Marxist idea of socialism was also heavily opposed to utopian socialism.

Although Karl Marx and Friedrich Engels wrote very little on socialism and neglected to provide any details on how it might be organized, numerous social scientists and neoclassical economists have used Marx's theory as a basis for developing their own models of socialist economic systems. The Marxist view of socialism served as a point of reference during the socialist calculation debate.

Socialism is a post-commodity economic system, meaning that production is carried out to directly produce use-value (to directly satisfy human needs, or economic demands) as opposed to being produced with a view to generating a profit. 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 supposedly planned fashion. Although Karl Marx and Friedrich Engels understood planning to involve the input and decisions of the individuals involved at localized levels of production and consumption, planning has been interpreted to mean centralized planning by Marxist-Leninists during the 20th century. However, there have been other conceptions of economic planning, including decentralized-planning and participatory planning. It is important to notice and to not make the mistake that Marx' theory and thinking output has anything to do with what Stalin has made from it. Marx' main manuscript, a postum work is called 'Grundrisse' was published in 1953 (the year Stalin passed away). In this work, most areas of Marx' thinking output are explored: production, consumption, distribution, social impact of capitalism, communism as the next level after capitalism as a live model for humans emphasizing fair distribution of goods, equality and the optimum environment for humans to live in to develop themselves to their best capabilities (art, politics, philosophy) in order to achieve happiness and to satisfy intrinsic needs (whatever they may be). Goal of Marx was to design a social system which eliminates the differences in classes between the poor (proletarians) and the rich (bourgeoise). By achieving this elimination, the tension and the power differences are gone to force the workers to work under bad conditions with way too low salaries (loans). Capitalism was, according Marx, a system which was guarateed to lead to a secured downfall because big companies will buy small companies leading to monopolism, so there will be a very small population owning all the money (and power) and there will be a huge amount of people having no money and therefore no potential to buy products from the capitalistic production system. For sure a revolution would happen. What Marx' oversaw was that the loanworkers were paid as such that they were and still are able to buy products from the capitalistic production system, in other words, the workers became as essential part to assure the capitalistic system is still alive and dominant in most of world's nations.

In contrast to capitalism, which relies upon the coercive market forces to compel capitalists to produce use-values as a byproduct of the pursuit of profit, socialist production is to be 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.

This page was last edited on 10 May 2018, at 09:12 (UTC).
Reference: under CC BY-SA license.

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