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In Marxist theory, the socialist mode of production, also referred to as lower-stage of communism or simply socialism as Karl Marx and Friedrich Engels used the terms socialism and communism interchangeably, refers to a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism. The Marxist definition of socialism is an economic transition 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 products is based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management so that social surplus goes to the working class and hence society as a whole.
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 labour and the means of production seeking to perfect the market process. The Marxist idea of socialism was also heavily opposed to utopian socialism. Although Marx and 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.
Marx himself did not use the term socialism to refer to this development, but he rather called it a communist society that has not yet reached its higher-stage. The term socialism in reference to this societal organization was popularized during the Russian Revolution by Vladimir Lenin. This view is consistent with and helped to inform early conceptions of socialism where the law of value no longer directs economic activity and therefore monetary relations in the form of exchange-value, profit, interest and wage labour would not operate and apply to Marxist socialism.
Mode of production
Karl Marx described a socialist society as such:
|“||What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges. Accordingly, the individual producer receives back from society – after the deductions have been made – exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.||”|
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. However, there have been other conceptions of economic planning, including decentralised and participatory planning. One of Marx's main manuscripts is a postum work called Grundrisse which was published in 1953. In this work, most areas of Marx's thinking output are explored, including 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 and philosophy, among others) in order to achieve happiness and to satisfy intrinsic needs (whatever they may be). The goal of Marx was to design a social system which eliminates the differences in classes between the proletariat and the bourgeoise. By achieving this elimination, the tension and the power differences which force the workers to work under bad conditions with way too low salaries (loans) are gone. According to Marx, capitalism was a system which was guarateed to lead to a secured downfall because big companies would buy small companies, leading to monopolism, so there would be a very small population owning all the money and power. There would be a huge number of people having no money and therefore no potential to buy products from the capitalistic production system. What Marx oversaw was that the loan-workers 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 would not be present in a socialist economy. The value of a good in socialism is its physical utility rather than its embodied labour, cost of production and exchange value as in a capitalist system. Socialism would make use of incentive-based systems and inequality would still exist, but only to a diminishing extent as all members of society would be worker-owners. This eliminates the severity of previous tendencies towards inequality and conflicts arising over ownership of the means of production and property income accruing to a small class of owners. 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".
The advanced stage of socialism, referred to as the upper-stage communism in the Critique of the Gotha Programme, is based on the socialist mode of production, but it is differentiated from lower-stage socialism in a few fundamental ways. While socialism implies public ownership (by a proletarian semi-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.
The fundamental goal of socialism from the view of Karl Marx and Friedrich Engels was the realization of human freedom and individual autonomy. Specifically, this refers to freedom from the alienation imposed upon individuals in the form of coercive social relations as well as material scarcity, whereby the individual is compelled to engage in activities merely to survive to reproduce his or herself. The aim of socialism is to provide an environment whereby individuals are free to express their genuine interests, creative freedom and desires unhindered by forms of social control that force individuals to work for a class of owners who expropriate and live off the surplus product.
As a set of social relations, socialism is defined by the degree to which economic activity in society is planned by the associated producers so that the surplus product produced by socialised assets is controlled by a majority of the population through democratic processes. The sale of labour power would be abolished so that every individual participates in running their institution as stakeholders or members with no one having coercive power over anyone else in a vertical social division of labour which is to be distinguished from a non-social, technical division of labour which would still exist in socialism. The incentive structure changes in a socialist society given the change in the social environment so that an individual labourers' work becomes increasingly autonomous and creative, creating a sense of responsibility for his or her institution as a stakeholder.
Role of the state
In Marxist theory, the state is "the institution of organised violence which is used by the ruling class of a country to maintain the conditions of its rule. Thus, it is only in a society which is divided between hostile social classes that the state exists". The state is seen as a mechanism that is dominated by the interests of the ruling class and utilized to subjugate other classes in order to protect and legitimize the existing economic system.
After a proletarian revolution, the state would initially become the instrument of the proletariat. Conquest of the state apparatus by the proletariat 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, meaning 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.
- Marx, Karl (1875). "Part I". Critique of the Gotha Program. Marxists Internet Archive. Retrieved 8 March 2019.
- "Socialism". Glossary of Terms. Marxists Internet Archive. Retrieved 20 February 2013.
- McNally, David (1993). Against the Market: Political Economy, Market Socialism and the Marxist Critique. Verso. ISBN 978-0-86091-606-2.
- Gasper, Phillip (October 2005). The Communist Manifesto: A Road Map to History's Most Important Political Document. Haymarket Books. p. 23. ISBN 978-1-931859-25-7.
Marx and Engels never speculated on the detailed organization of a future socialist or communist society. The key task for them was building a movement to overthrow capitalism. If and when that movement was successful, it would be up to the members of the new society to decide democratically how it was to be organized, in the concrete historical circumstances in which they found themselves.
- Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Neoliberalism. Stanford University Press. p. 20. ISBN 978-0-8047-7566-3.
According to nineteenth-century socialist views, socialism would function without capitalist economic categories – such as money, prices, interest, profits and rent – and thus would function according to laws other than those described by current economic science. While some socialists recognized the need for money and prices at least during the transition from capitalism to socialism, socialists more commonly believed that the socialist economy would soon administratively mobilize the economy in physical units without the use of prices or money.
- Schweickart, David; Lawler, James; Ticktin, Hillel; Ollman, Bertell (1998). "The Difference Between Marxism and Market Socialism". Market Socialism: The Debate Among Socialists. p. 61–63. "More fundamentally, a socialist society must be one in which the economy is run on the principle of the direct satisfaction of human needs. [...] Exchange-value, prices and so money are goals in themselves in a capitalist society or in any market. There is no necessary connection between the accumulation of capital or sums of money and human welfare. Under conditions of backwardness, the spur of money and the accumulation of wealth has led to a massive growth in industry and technology. [...] It seems an odd argument to say that a capitalist will only be efficient in producing use-value of a good quality when trying to make more money than the next capitalist. It would seem easier to rely on the planning of use-values in a rational way, which because there is no duplication, would be produced more cheaply and be of a higher quality."
- "Karl Marx Socialism and Scientific Communism". Economic Theories. Retrieved 20 February 2013.
- Marx, Karl (1875). "Part 1". Critique of the Gotha Program. "In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!"
- Fromm, Erich (1961). "Marx's Concept Of Socialism". Marx's Concept of Man. Frederick Ungar Publishing. Retrieved 20 February 2013.
- Schweickart, David; Lawler, James; Ticktin, Hillel; Ollman, Bertell (1998). "Definitions of market and socialism". Market Socialism: The Debate Among Socialists. pp. 58–59. "For an Anti-Stalinist Marxist, socialism is defined by the degree to which the society is planned. Planning here is understood as the conscious regulation of society by the associated producers themselves. Put it differently, the control over the surplus product rests with the majority of the population through a resolutely democratic process. [...] The sale of labour power is abolished and labour necessarily becomes creative. Everyone participates in running their institutions and society as a whole. No one controls anyone else."
- "State". Glossary of Terms. Marxists Internet Archive. Retrieved 20 February 2013.
- Engels, Friedrich (1880). "The Development of Utopian Socialism". Socialism: Utopian and Scientific. Marxists Internet Archive. "In 1816, he declares that politics is the science of production, and foretells the complete absorption of politics by economics. The knowledge that economic conditions are the basis of political institutions appears here only in embryo. Yet what is here already very plainly expressed is the idea of the future conversion of political rule over men into an administration of things and a direction of processes of production."