HOME

TheInfoList




Social ownership is the appropriation of the
surplus product Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy. The ...
, produced by the
means of production The means of production is a concept that encompasses the social use and ownership Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual prope ...
, to society as a whole. It is the defining characteristic of a
socialist Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, s ...

socialist
economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the co ...
. It can take the form of
state ownership State ownership, also called government ownership and public ownership, is the ownership of an Industry (economics), industry, asset, or Business, enterprise by the State (polity), state or a public body representing a community as opposed to an ...
,
common ownership Common ownership refers to holding the assets of an organization, enterprise Enterprise (or the archaic spelling Enterprize) may refer to: Business and economics Brands and enterprises * Enterprise GP Holdings Enterprise GP Holdings ...
,
employee ownership Employee stock ownership, or employee share ownership, is where a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a m ...
,
cooperative ownership A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise".citizen ownership of equity Social ownership is the appropriation of the surplus product produced by the means of production by a society or community as a whole, and is the defining characteristic of a socialist Socialism is a Political philosophy, political, Soci ...
. Traditionally, social ownership implied that
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
and
factor market In economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within those societies. ...
s would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society; but the articulation of models of
market socialism Market socialism is a type of economic system involving the Public ownership, public, Cooperative ownership, cooperative, or social ownership of the means of production in the framework of a market economy. Market socialism differs from Economi ...
where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy. Social ownership of the means of production is the common defining characteristic of all the various forms of
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
. The two major forms of social ownership are society-wide
public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
and
cooperative ownership A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise".surplus product Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy. The ...
. With society-wide public ownership, the surplus is distributed to all members of the public through a
social dividend The social dividend is the return on the capital assets and natural resources owned by society in a socialist Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decision ...
whereas with co-operative ownership the economic surplus of an enterprise is controlled by all the worker-members of that specific enterprise. The goal of social ownership is to eliminate the distinction between the class of private owners who are the recipients of passive property income and workers who are the recipients of labor income (wages, salaries and commissions), so that the surplus product (or
economic profits An economic profit is the difference between the revenue a commerce , commercial entity has received from its outputs and the opportunity costs of its inputs. Unlike an accounting profit, an economic profit takes into account both a firm's Impli ...
in the case of market socialism) belong either to society as a whole or to the members of a given enterprise. Social ownership would enable productivity gains from labor automation to progressively reduce the average length of the working day instead of creating job insecurity and unemployment. Reduction of necessary work time is central to the
Marxist Marxism is a method of socioeconomic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern societies progress, ...
concept of human freedom and overcoming alienation, a concept widely shared by Marxist and non-Marxist socialists alike.
Socialization as a process Social ownership is the appropriation of the surplus product Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philos ...
is the restructuring the economic framework, organizational structure and institutions of an economy on a socialist basis. The comprehensive notion of socialization and the
public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
form of social ownership implies an end to the operation of the laws of capitalism,
capital accumulation Capital accumulation (also termed the accumulation of capital) is the dynamic that motivates the , involving the of money or any with the of increasing the initial monetary of said asset as a whether in the form of , , , or . The aim of cap ...
and the use of
money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corner">174x174px Money is any item or verifiable record that is generally a ...

money
and financial valuation in the production process, along with a restructuring of workplace-level organization.''What is socialization? A program for practical socialism'', by Korsch, Karl. 1975. Duke University Press. New German Critique, No. 6, pp. 60-81: "The socialization demanded by socialism signifies a new regulation of production with the goal of replacing the private capitalist economy with a socialist communal economy."


Objectives

Social ownership is variously advocated to end the Marxian concept of exploitation, to ensure that income distribution reflects individual contributions to the social product, to eliminate unemployment arising from technological change, to ensure a more
egalitarian Egalitarianism (), or equalitarianism, is a school of thought within political philosophy that builds from the concept of social equality, prioritizing it for all people. Egalitarian doctrines are generally characterized by the idea that all hu ...
distribution of the economy's surplus,''Market Socialism, a case for rejuvenation'', by Pranab Bardhan and John Roemer. 1992. Journal of Economic Perspectives, Vol. 6, No. 3, pp. 101–16: "Public ownership in the narrow sense of state control of firms is not necessary to achieve one of socialism's goals, a relatively egalitarian distribution of the economy's surplus. We take public ownership, in a wider sense, to mean that the distribution of the profits of firms is decided by the political democratic processyet control of firms might well be in the hands of agents that do not represent the state." or to create the foundations for a non-market socialist economy. In
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices philosophy. The term ''philosopher'' comes from the grc, φιλόσοφος, , translit=philosophos, meaning 'lover of wis ...

Karl Marx
's analysis of capitalism, social ownership of the means of production emerges in response to the contradictions between socialized production and private appropriation of surplus value in capitalism. Marx argued that productivity gains arising from the substitution of
variable capital Constant capital (c), is a concept created by Karl Marx and used in Marxian economics, Marxian political economy. It refers to one of the forms of Capital (economics), capital invested in Production (economics), production, which contrasts with v ...
(labor inputs) for
constant capital Constant capital (c), is a concept created by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist and socialist revolutionary. Born in Tri ...
(capital inputs) would cause labor displacement to outstrip the demand for labor. This process would lead to stagnant wages and rising unemployment for the working class alongside rising property income for the capitalist class, further leading to an over-accumulation of capital. Marx argued that this dynamic would reach a point where social ownership of the highly automated means of production would be necessitated to resolve this contradiction and resulting social strife. Thus the Marxist case for social ownership and socialism is not based on any moral critique of the distribution of property income (wealth) in capitalism, but rather the Marxist case for socialism is based on a systematic analysis of the development and limits of the dynamic of capital accumulation. For Marx, social ownership would lay the foundations for the transcendence of the capitalist law of value and the accumulation of capital, thereby creating the foundation for socialist planning. The ultimate goal of social ownership of productive property for Marx was to expand the "realm of freedom" by shortening average work hours so that individuals would have progressively larger portion of their time to pursue their genuine and creative interests. Thus the end goal of social ownership is the transcendence of the Marxist concept of alienation. The economist David McMullen identifies five major benefits of social ownership, where he defines it as society-wide ownership of productive property: first, workers would be more productive and have greater motivation since they would directly benefit from increased productivity, secondly this ownership stake would enable greater accountability on the part of individuals and organizations, thirdly social ownership would eliminate unemployment, fourth it would enable the better flow of information within the economy, and finally it would eliminate wasteful activities associated with "wheeling and dealing" and wasteful government activities intended to curb such behavior and deal with unemployment. From a non-Marxist, market socialist perspective, the clearest benefit of social ownership is an equalization of the distribution of property income, eliminating the vast disparities in wealth that arise from private ownership under capitalism. Property income (profit, interest and rent) is distinguished from labor income (wages and salaries) which in a socialist system would continue to be unequal based on one's
marginal product of laborIn economics, the marginal product of labor (MPL) is the change in output that results from employing an added unit of labor. It is a feature of the production function, and depends on the amounts of physical capitalPhysical capital represents in ...
social ownership would only equalize passive property income. Notable non-Marxist and Marxist socialist theorists alike have argued that the most significant argument for social ownership of the means of production is to enable productivity gains to ease the work burden for all individuals in society, resulting in progressively shorter hours of work with increasing automation and thus a greater amount of free time for individuals to engage in creative pursuits and leisure.


Criticism of private ownership

Social ownership is contrasted with the concept of
private ownership Private property is a legal designation for the ownership of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the propert ...
and is promoted as a solution to what its proponents see as being inherent issues to private ownership.
Market socialists Market socialism is a type of economic system involving the public In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This ...
and non-market
socialists Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, s ...
therefore have slightly different conceptions of social ownership. The former believe that private ownership and private appropriation of
property income Property income refers to profit or income received by virtue of owning property. The three forms of property income are rent, received from the ownership of natural resources; interest, received by virtue of owning financial assets; and profit, r ...
is the fundamental issue with capitalism, and thus believe that the process of capital accumulation and profit-maximizing enterprise can be retained, with their profits being used to benefit society in the form of a
social dividend The social dividend is the return on the capital assets and natural resources owned by society in a socialist Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decision ...
. By contrast, non-market socialists argue that the major problems with capitalism arise from its contradictory economic laws that make it unsustainable and historically limited. Therefore, social ownership is seen as a component of the establishment of non-market coordination and alternative "socialist laws of motion" that overcome the systemic issues of capital accumulation. The socialist critique of private ownership is heavily influenced by the Marxian analysis of capitalist property forms as part of its broader critique of alienation and exploitation in capitalism. Although there is considerable disagreement among socialists about the validity of certain aspects of Marxian analysis, the majority of socialists are sympathetic to Marx's views on exploitation and alienation. Socialists critique the private appropriation of property income on the grounds that because such income does not correspond to a return on any productive activity and is generated by the working class, it represents exploitation. The property-owning (capitalist) class lives off passive property income produced by the working population by virtue of their claim to ownership in the form of stock, bonds or private equity. This exploitative arrangement is perpetuated due to the structure of capitalist society. From this perspective, capitalism is regarded as class system akin to historical class systems like slavery and feudalism. Private ownership has also been criticized on ethical grounds by the economist James Yunker. Yunker argues that because passive property income requires no mental or physical exertion on the part of the recipient and because its appropriation by a small group of private owners is the source of the vast inequalities in contemporary capitalism, this establishes the ethical case for social ownership and socialist transformation.


Socialization as a process

Socialization is conceived as a process that transforms the economic processes and, by extension, the social relations within an economy. As such, it is distinct from the process of "nationalization" which does not necessarily imply a transformation of the organizational structure of organizations or the transformation of the economic framework under which economic organizations operate. Marxists envision socialization as a restructuring of social relations to overcome alienation, replacing hierarchical social relations within the workplace with an association of members.


Socialization debates

During the 1920s, socialists in Austria and Germany were engaged in a comprehensive dialogue about the nature of socialization and how a program of socialization could be effectively carried out. Austrian scientific thinkers whose ideas were based on
Ernst Mach Ernst Waldfried Josef Wenzel Mach (; ; 18 February 1838 – 19 February 1916) was an Austrian physicist and philosopher A philosopher is someone who practices philosophy. The term ''philosopher'' comes from the grc, φιλόσοφος, , t ...

Ernst Mach
's empiricist notion of energy and technological optimism, including Josef Popper-Lynkeus and Carl Ballod, proposed plans for rational allocation of exhaustible energy and materials through statistical empirical methods. This conception of non-capitalist calculation involved the use of energy and time units, the latter being viewed as the standard cardinal unity of measurement for socialist calculation. These thinkers belonged to a technical school of thought called "scientific utopianism", which is an approach to social engineering that explores possible forms of social organization. The most notable thinker belonging to this school of thought was the Viennese philosopher and economist
Otto Neurath Otto Karl Wilhelm Neurath (; 10 December 1882 – 22 December 1945) was an Austria Austria (, ; german: Österreich ), officially the Republic of Austria (german: Republik Österreich, links=no, ), is a landlocked Eastern Alps, East Alp ...

Otto Neurath
, whose conception of socialism as a natural, non-monetary economic system became widespread within the socialist movement following the end of World War I. Neurath's position was held in contrast to other socialists in this period, including the revisionist perspective stemming from
Eduard Bernstein Eduard Bernstein (; 6 January 1850 – 18 December 1932) was a German social democratic Social democracy is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social ...

Eduard Bernstein
, the orthodox social democratic perspective of
Karl Kautsky Karl Johann Kautsky (; ; 16 October 1854 – 17 October 1938) was a Czech-Austrian philosopher A philosopher is someone who practices philosophy. The term ''philosopher'' comes from the grc, φιλόσοφος, , translit=philosophos, meaning ...
, the Austro-Marxism models of
labor-time calculation Labor-time calculation is a method of economic calculation that uses labor time as the basic unit of accounting and valuation. This method of calculation was advocated by the economists Otto Bauer, Helene Bauer and as an alternative to calculat ...
from Otto Bauer and the emerging school of neoclassical market socialism. Neurath's position opposed all models of market socialism because it rejected the use of money, but was also held in contrast with the more orthodox Marxist conception of socialism held by Karl Kautsky, where socialism only entails the elimination of money as capital along with super-session of the process of capital accumulation. Otto Neurath conceptualized a comprehensive view of socialization during the socialization debates. "Total socialization" involved not only a form of ownership but also the establishment of economic planning based on
calculation in kind Calculation in kind or calculation in-natura is a way of valuating resources and a system of accounting that uses disaggregated physical magnitudes as opposed to a common unit of calculation. As the basis for a socialist Socialism is a poli ...
, and was contrasted with "partial socialization". "Partial socialization" involved the use of in-kind calculation and planning within a single organization, which externally operated within the framework of a monetary market economy. Neurath's conception of socialism was the initial point of criticism of
Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School The Austrian School is a heterodox In religion, heterodoxy (from Ancient Greek Ancient Greek includes the forms of the Greek languag ...

Ludwig von Mises
in the
socialist calculation debate The socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a Socialist mode of production, socialist economy would perform economic calculation given the absence of the law of value ...
.''Otto Neurath’s Economics in Context'', by Nemeth, Elisabeth; Schmitz, Stefan W.; Uebel, Thomas E. 2007. In the subsequent socialist calculation debates, a dichotomy between socialists emerged between those who argued that socialization entailed the end of monetary valuation and capital markets, and those who argued that monetary prices could be used within a socialized economy. A further distinction arose between market socialists who argued that social ownership can be achieved within the context of a market economy, where worker-owned or publicly owned enterprises maximized profit and those who argued that socially owned enterprises operate according to other criteria, like marginal cost pricing.


Typology

Social ownership and socialization is categorically distinct from the process of
nationalization Nationalization (or nationalisation) is the process of transforming privately-owned asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangi ...
. In most cases, "socialization" is understood to be a deeper process of transforming the
social relations of production Relations of production (german: Produktionsverhältnisse, links=no) is a concept frequently used by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political the ...
within economic organizations as opposed to simply changing titles of ownership. In this sense, "socialization" often involves both a change in ownership and a change in organizational management, including self-management or some form of workplace democracy in place of a strict hierarchical form of control. More fundamentally, social ownership implies that the surplus product (or economic profits) generated by publicly owned enterprise accrues to all of societystate ownership does not necessarily imply this. Fundamentally, there are two major forms of "social ownership": * Society-wide public ownership by an entity or network of entities representing society. * Employee-owned cooperative enterprise, with the members of each individual enterprise being co-owners of their organization. These possibilities give rise to a socialization dilemma, faced by advocates of public ownership: if social ownership is entrusted exclusively to state agents, then it is liable to bureaucratization; if it is entrusted exclusively to workers, then it is liable to monopoly power and abuse of market position. Additionally, there are two major forms of management or "social control" for socially owned organizations, both of which can exist alongside the two major modes of social ownership. The first variant of control is public management, where enterprises are run by management held accountable to an agency representing the public either at the level of national, regional or local government. The second form of social control is worker self-management, where managers are elected by the member-workers of each individual enterprise or enterprises are run according to self-directed work processes. The exact forms of social ownership vary depending on whether or not they are conceptualized as part of a market economy or as part of a non-market planned economy.


Public ownership

Public ownership can exist both within the framework of a market economy and within the framework of a non-market planned economy. In market socialist proposals, public ownership takes the form of state-owned enterprises that acquire capital goods in capital markets and operate to maximize profits, which are then distributed among the entire population in the form of a social dividend. In non-market models of socialism, public ownership takes the form of a single entity or a network of public entities coordinated by economic planning. A contemporary approach to socialism involves linking together production and distribution units by modern computers to achieve rapid feedback in the allocation of capital inputs to achieve efficient economic planning. The economist
Alec Nove Alexander Nove, FRSE Fellowship of the Royal Society of Edinburgh (FRSE) is an award granted to individuals that the Royal Society of Edinburgh, Scotland's national academy of science and Literature, letters, judged to be "eminently distingui ...
defines social ownership as a form of autonomous
public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
, drawing a distinction between state-owned and directed enterprises. Nove advocates for the existence of both forms of enterprise in his model of feasible socialism.''The Economics of Feasible Socialism Revisited'', by Nove, Alexander. 1991. pp. 212–13): "Radoslav Selucky opts for what he calls 'social ownership', with 'means of production managed by those who make use of them', separated from the state...1) State enterprises, centrally controlled and administered, hereinafter referred to as ''centralized state corporations''. 2) Publicly owned (or socially owned) enterprises with full autonomy and a management responsible to the workforce, hereinafter ''socialized enterprises''." Public ownership was advocated by neoclassical socialist economists during the interwar socialist calculation debate, most notable
Oskar Lange Oskar Ryszard Lange (27 July 1904 – 2 October 1965) was a Poland, Polish economics, economist and diplomat. He is best known for advocating the use of market (economics), market pricing tools in socialism, socialist systems and providing a model ...
, ,
Abba P. Lerner Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner; 28 October 1903 – 27 October 1982) was a Russian-born British economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual ...
and
Maurice Dobb Maurice Herbert Dobb (24 July 1900 – 17 August 1976) was a British economist at Cambridge University and a Fellow of Trinity College, Cambridge Trinity College is a Colleges of the University of Cambridge, constituent college of the Unive ...
. Neoclassical market socialist economists in the latter half of the 20th century who advocated public ownership highlighted the distinction between "control" and "ownership". John Roemer and Pranab Bardhan argued that public ownership, meaning a relatively egalitarian distribution of enterprise profits, does not require state control as publicly owned enterprises can be controlled by agents who do not represent the state. David McMullen's concept of decentralized non-market socialism advocates social ownership of the means of production, believing it to be far more efficient than private ownership. In his proposal, property titles would be replaced by "usership" rights and the exchange of capital goods would no longer be possible. Market exchange in capital goods would be replaced by internal transfers of resources, but an internal and decentralized price system would be fundamental to this systems' operation. However, by itself public ownership is not socialist as it can exist under a wide variety of different
political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, such as the distribution of reso ...
and
economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the co ...
s. State ownership by itself does not imply social ownership where income rights belong to society as a whole. As such, state ownership is only one possible expression of public ownership, which itself is one variation of the broader concept of social ownership.


Social ownership of equity

The social ownership of capital and corporate stock has been proposed in the context of a market socialist system, where social ownership is achieved either by having a public body or employee-owned pension funds that own . The American economist
John Roemer John E. Roemer (; born February 1, 1945 in Washington, D.C., to Ruth Roemer and Milton Roemer, namesake of Roemer's law) is an American economist and political scientist. He is currently the Elizabeth S. and A. Varick Stout Professor of Political Sc ...
developed a model of market socialism that features a form of public ownership where individuals receive a non-transferable coupon entitling them to a share of the profits generated by autonomous non-governmental publicly owned enterprises. In this model, "social ownership" refers to citizen ownership of equity in a market economy. James Yunker argues that public ownership of the means of production can be achieved in the same way private ownership is achieved in modern capitalism, using the shareholder system that effectively separates management from ownership. Yunker posits that social ownership can be achieved by having a public body, designated the Bureau of Public Ownership (BPO), own the shares of publicly listed firms without affecting market-based allocation of capital inputs. Yunker termed this model ''Pragmatic market socialism'' and argued that it would be at least as efficient as modern-day capitalism while providing superior social outcomes as public ownership would enable profits to be distributed among the entire population rather than going largely to a class of inheriting rentiers. An alternative form of social ownership of equity is ownership of corporate stock through wage earner funds and pension funds. The underlying concept was first expounded upon in 1976 by the management theorist
Peter Drucker Peter Ferdinand Drucker (; ; November 19, 1909 – November 11, 2005) was an Austrian-American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corp ...
, who argued that pension funds could reconcile employees' need for financial security with capital's need to be mobile and diversified, referring to this development as "pension fund socialism". In Sweden during the late 1970s, the Meidner program was advanced by the
Swedish Social Democratic Party The Swedish Social Democratic Party, officially the Social Democratic Workers' Party of Sweden ( sv, Sveriges Socialdemokratiska Arbetareparti ; S/SAP), contesting elections as The Workers Party – The Social Democrats ( sv, link=no, Arbetarepart ...
as a way to socialize enterprises through employee wage earners' funds, which would be used to purchase corporate stock.
Rudolf Meidner Rudolf Alfred Meidner (23 June 1914 – 9 December 2005) was a Swedish economist. Biography Son of Alfred Meidner and Elise Bandmann, Meidner was born on 23 June 1914 in Breslau, Province of Silesia, Silesia. He was forced to flee Nazi Germany a ...
's original plan was to require Swedish companies over a certain size to issue shares equal to 20 percent of profits, which would be owned by wage-earner funds controlled by employees through their trade unions. This plan was rejected and a watered-down proposal was adopted in 1984, which left corporate decision making just as it was and limited the scope of employee ownership to less than 3.5% of listed company shares in 1990.''The Social Ownership of Capital'', by Minns, Richard. 1996. New Left Review, Vol. 219, pp. 44–45." In his
2020 2020 was heavily defined by the , which led to global and disruption, of events, and the since the of the 1930s. ''Geospatial World'' also called it "the worst year in terms of " in part due to major climate disasters worldwide, includi ...
Presidential campaign,
Bernie Sanders Bernard Sanders (born September8, 1941) is an American politician who has served as the from since 2007 and as for the state's from 1991 to 2007. He is the longest-serving in U.S. congressional history, although he has a close relatio ...

Bernie Sanders
proposed that 20% of stocks in corporations with over $100 million in annual revenue be owned by the corporation's workers.


Cooperative ownership

Cooperative ownership is the organization of economic units into enterprises owned by their workforce (
workers cooperative A worker cooperative is a cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a ...
) or by customers who use the products of the enterprise (this latter concept is called a
consumer cooperative Raunds Co-operative Society Limited was a consumer co-operative society based in Raunds, Northamptonshire, founded in 1891 A consumers' co-operative is an enterprise Enterprise (or the archaic spelling Enterprize) may refer to: Business and e ...
). Cooperatives are often organized around some form of self-management, either in the form of elected managers held accountable to the workforce, or in the form of direct management of work processes by the workers themselves. Cooperatives are often proposed by proponents of market socialism, most notably by the economists Branko Horvat, Jaroslav Vanek and Richard Wolff. Cooperative ownership comes in various forms, ranging from direct workers' ownership, employee stock ownership plans through pension funds, to the weakest version involving profit sharing. Profit-sharing and varying degrees of self-management or "
Holacracy Holacracy is a method of decentralized management and organizational Corporate governance, governance, which claims to distribute authority and decision-making through a holarchy of self-organizing teams rather than being vested in a management hier ...

Holacracy
" is practiced in many of the high-technology companies of
Silicon Valley Silicon Valley is a region in Northern California Northern California (colloquially known as NorCal) is a geographic and cultural region that generally comprises the northern portion of the U.S. state of California. Spanning the state's nort ...

Silicon Valley
. The earliest model of cooperative socialism is mutualism, proposed by the French anarchist philosopher
Pierre-Joseph Proudhon Pierre-Joseph Proudhon (, , ; 15 January 1809, Besançon – 19 January 1865, Paris Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated popu ...

Pierre-Joseph Proudhon
. In this system, the state would be abolished and economic enterprises would be owned and operated as producer cooperatives, with worker-members compensated in labor vouchers. The model of market socialism promoted in the former
Socialist Federal Republic of Yugoslavia The Socialist Federal Republic of Yugoslavia, commonly referred to as SFR Yugoslavia or simply Yugoslavia, was a Socialist state, socialist country in Southeast Europe, Southeast and Central Europe that existed from its foundation in the afte ...
was based on what was officially called "social ownership", involving an arrangement where workers of each firm each became members and joint-owners and managed their own affairs in a system of workers' self-management. Contemporary proponents of cooperative ownership cite higher motivation and performance in existing cooperatives. Critics argue that cooperative ownership by itself does not resolve the structural issues of capitalism like economic crises and the business cycle, and that cooperatives have an incentive to limit employment in order to boost the income of existing members.


Commons and peer-to-peer

In the context of non-market proposals, social ownership can include holding the means of producing wealth in common (
common ownership Common ownership refers to holding the assets of an organization, enterprise Enterprise (or the archaic spelling Enterprize) may refer to: Business and economics Brands and enterprises * Enterprise GP Holdings Enterprise GP Holdings ...
), with the concept of "usership" replacing the concept of ownership.
Commons-based peer production Commons-based peer production (CBPP) is a term coined by Harvard Law School professor Yochai Benkler. It describes a model of socio-economic production in which large numbers of people work cooperative A cooperative (also known as co-opera ...
involves the distribution of a critical mass of inputs and all outputs through information networks as free goods rather than commodities to be sold for profit by capitalist firms. The economist Pat Devine defines social ownership as "ownership by those who are affected bywho have an interest inthe use of the assets involved", distinguishing it from other forms of ownership. Devine argues that this variant of social ownership will be more efficient than the other types of ownership because "it enables the tacit knowledge of all those affected to be drawn upon in the process of negotiating what should be done to further the social interest in any particular context". The phrases "social production" and "social peer-to-peer" production have been used to classify the type of workplace relationships and ownership structures found in the
open-source software Open-source software (OSS) is computer software Software is a collection of instructions Instruction or instructions may refer to: Computing * Instruction, one operation of a processor within a computer architecture instruction set * Co ...
movement and
Commons-based peer production Commons-based peer production (CBPP) is a term coined by Harvard Law School professor Yochai Benkler. It describes a model of socio-economic production in which large numbers of people work cooperative A cooperative (also known as co-opera ...
processes, which operate, value and allocate value without private property and market exchange.


Ownership in Soviet-type economies

In
Soviet-type economies Soviet-type economic planning (STP) is the specific model of centralized planning A planned economy is a type of economic system where investment, Production (economics), production and the allocation of capital goods takes place according to ec ...
, the means of production and natural resources were almost entirely owned by the state and collective enterprises. State enterprises were integrated into a national planning system, where factor inputs were allocated to them by the Ministry for Technical Supply (Gossnab). According to ''The Great Soviet Encyclopedia'', "socialist ownership" is a form of social ownership that forms the basis for the socialist system, involving the collective appropriation of material wealth by working people. Social ownership arises out of the course of capitalist development, creating the objective conditions for further socialist transformation and for the emergence of a planned economy with the aim of raising the living standards for everyone in society.


Misuse of the term

Particularly in the United States, the term ''socialization'' has been mistakenly used to refer to any state or government-operated industry or service (the proper term for such being either
nationalization Nationalization (or nationalisation) is the process of transforming privately-owned asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangi ...
or
municipalizationMunicipalization is the transfer of private entities, asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used ...
). It has also been incorrectly used to mean any tax-funded programs, whether privately run or government run.


See also

*
Co-determination In corporate governance Corporate governance is the collection of mechanisms, processes and relations used by various parties to control and to operate a corporation. Governance structures and principles identify the distribution of rights and re ...
** Worker representation on corporate boards of directors *
Cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous The federal subject The federal subjects of Russia, also referred to as the subjects of the Russian Federation (russian: субъекты Российск ...
*
Worker cooperative A worker cooperative is a cooperative Workers' self-management, owned and self-managed by its workers. This control may mean a firm where every worker-owner participates in decision-making in a democratic fashion, or it may refer to one in which m ...
*
Employee stock ownership Employee stock ownership, or employee share ownership, is where a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a m ...
*
Market socialism Market socialism is a type of economic system involving the Public ownership, public, Cooperative ownership, cooperative, or social ownership of the means of production in the framework of a market economy. Market socialism differs from Economi ...


Notes


Further reading

* Korsch, Karl (1975). "What Is Socialization? A Program of Practical Socialism". ''New German Critique'' No.6: 60–81. * Minns, Richard (1996). "The Social Ownership of Capital". ''New Left Review'' 219. 1: 42–61. * O'Neil, John (2002). "Socialist Calculation and Environmental Valuation: Money, Markets and Ecology". ''Science and Society'' 66. 1: 137–58.


External links


"Socialization"
by
Anton Pannekoek Antonie “Anton” Pannekoek (2 January 1873 – 28 April 1960) was a Dutch astronomer An astronomer is a scientist in the field of astronomy who focuses their studies on a specific question or field outside the scope of Earth. They observe as ...

Anton Pannekoek
{{DEFAULTSORT:Socialization (Economics) Socialist calculation
Socialization In sociology, socialization is the process of Internalisation (sociology), internalizing the Norm (social), norms and Ideology, ideologies of society. Socialization encompasses both learning and teaching and is thus "the means by which social an ...
Anarchist economics Economic ideologies Economic systems Ownership