The socialist mode of production, sometimes referred to as the communist mode of production, or simply (Marxian) socialism or communism as

Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

and

Friedrich Engels Friedrich Engels ( ,"Engels"
'' communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a ...

'' and ''

socialism Socialism is a left-wing Economic ideology, economic philosophy and Political movement, movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to Private prop ...

'' interchangeably, is a specific historical phase of

economic development In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and ...

and its corresponding set of

social relations A social relation or also described as a social interaction or social experience is the fundamental unit of analysis within the social sciences, and describes any voluntary or involuntary interpersonal relationship between two or more individuals ...

that emerge from

capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...

in the schema of

historical materialism Historical materialism is the term used to describe Karl Marx's theory of history. Marx locates historical change in the rise of class societies and the way humans labor together to make their livelihoods. For Marx and his lifetime collaborat ...

within Marxist theory. The Marxist definition of socialism is that of production for

use-value Use value (german: Gebrauchswert) or value in use is a concept in classical political economy and Marxist economics. It refers to the tangible features of a commodity (a tradeable object) which can satisfy some human requirement, want or need, o ...

(i.e. direct satisfaction of human needs, or economic demands), therefore the law of value no longer directs economic activity. Marxist

production for use Production for use is a phrase referring to the principle of economic organization and production taken as a defining criterion for a socialist economy. It is held in contrast to production for profit. This criterion is used to distinguish commu ...

is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of " to each according to his needs", however soviet models have often distributed products based on the principle of "

to each according to his contribution "To each according to his contribution" is a principle of distribution considered to be one of the defining features of socialism. It refers to an arrangement whereby individual compensation is representative of one's contribution to the social pr ...

". The social relations of socialism are characterized by the proletariat effectively controlling the

means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...

, either through

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 jointly owned and democratically-contro ...

enterprises or by

public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry, asset, or enterprise by the state or a public body representing a community, as opposed to an individual or private party. Public ownershi ...

or private artisanal tools and self-management. Surplus value goes to the

working class The working class (or labouring class) comprises those engaged in manual-labour occupations or industrial work, who are remunerated via waged or salaried contracts. Working-class occupations (see also " Designation of workers by collar colo ...

and hence

society A society is a group of individuals involved in persistent social interaction, or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. Soci ...

as a whole. The Marxian conception of

stands in contrast to other early conceptions of socialism, most notably early forms of

market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owne ...

based on classical economics such as mutualism and

Ricardian socialism Ricardian socialism is a branch of classical economic thought based upon the work of the economist David Ricardo (1772–1823). The term is used to describe economists in the 1820s and 1830s who developed a theory of capitalist exploitation from ...

. 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 Utopian socialism is the term often used to describe the first current of modern socialism and socialist thought as exemplified by the work of Henri de Saint-Simon, Charles Fourier, Étienne Cabet, and Robert Owen. Utopian socialism is often de ...

. 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 Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

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 The socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices fo ...

. Marx himself did not use the term ''socialism'' to refer to this development. Instead, Marx called it a communist society that has not yet reached its higher-stage.Marx, Karl (1875)
"Part I"
''

Critique of the Gotha Program The ''Critique of the Gotha Programme'' (german: Kritik des Gothaer Programms) is a document based on a letter by Karl Marx written in early May 1875 to the Social Democratic Workers' Party of Germany (SDAP), with whom Marx and Friedrich Engels wer ...

''. Marxists Internet Archive. Retrieved 8 March 2019. The term ''socialism'' was popularized during the Russian Revolution by

Vladimir Lenin Vladimir Ilyich Ulyanov. ( 1870 – 21 January 1924), better known as Vladimir Lenin,. was a Russian revolutionary, politician, and political theorist. He served as the first and founding head of government of Soviet Russia from 1917 to 1 ...

. This view is consistent with and helped to inform early concepts of socialism in which the law of value no longer directs economic activity. Monetary relations in the form of

exchange-value In political economy and especially Marxian economics, exchange value (German: ''Tauschwert'') refers to one of the four major attributes of a commodity, i.e., an item or service produced for, and sold on the market, the other three attributes be ...

, profit,

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...

and

wage labour Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a ...

would not operate and apply to Marxist socialism.

Mode of production

described a socialist society as such:

Socialism Socialism is a left-wing Economic ideology, economic philosophy and Political movement, movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to Private prop ...

is a post- commodity economic system and production is carried out to directly produce

rather than toward generating profit. The

accumulation of capital Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of ...

is rendered insufficient in socialism as production is carried out independently of capital accumulation in a planned fashion. However, there have been other concepts of economic planning, including decentralised and

participatory planning Participatory planning is an urban planning paradigm that emphasizes involving the entire community in the community planning process. Participatory planning emerged in response to the centralized and rationalistic approaches that defined early ...

. One of Marx's main manuscripts is a posthumous work called ''

Grundrisse The ''Grundrisse der Kritik der Politischen Ökonomie'' (''Foundations of a Critique of Political Economy'') is an unfinished manuscript by the German philosopher Karl Marx. The series of seven notebooks was rough-drafted by Marx, chiefly for ...

'', published in 1953. In this work, Marx's thinking is explored regarding production, consumption, distribution, social impact of

Communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a ...

is considered as a living model for humans after capitalism. The emphasis is upon 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) to achieve happiness and to satisfy intrinsic needs. Marx's goal was to design a social system that eliminates the differences in classes between the proletariat and the bourgeoisie. In doing so, the tension and the power differences which force workers to labor in bad conditions for poor wages, disappear. According to Marx, capitalism is a system guaranteed to collapse because big companies would buy small companies, leading to

monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...

. In such a scenario, a very small number of people control most of the

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...

and

power Power most often refers to: * Power (physics), meaning "rate of doing work" ** Engine power, the power put out by an engine ** Electric power * Power (social and political), the ability to influence people or events ** Abusive power Power may a ...

. Poverty for the masses would prevail. Significant capital to buy products from the capitalist production system would be unavailable. Marx postulated that if workers are paid enough so that they still are able to buy products in a capitalist market, they will become essential contributors in assuring the domination of capitalism worldwide.

Market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...

forces to compel capitalists to produce use-values in pursuit of exchange-value. Socialist production involves rational planning of use-values and coordination of investment decisions to attain economic goals. In this approach, cyclical fluctuations that occur in a capitalist market economy do not exist 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 makes use of incentive-based systems, so inequality would still exist, but diminishingly so since workers are worker-owners. In this way, inequality is also diminished and capital and power is more widely distributed. 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 The ''Critique of the Gotha Programme'' (german: Kritik des Gothaer Programms) is a document based on a letter by Karl Marx written in early May 1875 to the Social Democratic Workers' Party of Germany (SDAP), with whom Marx and Friedrich Engels wer ...

'', is based on the socialist mode of production. However, it is different from lower-stage socialism in fundamental ways. While

implies

(by a proletarian semi-state apparatus) or cooperative ownership (by a

worker cooperative A worker cooperative is a cooperative 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 management is elected by ...

enterprise), communism would be based on common ownership of the

. Class distinctions based on ownership of capital cease to exist, along with the need for a state. A superabundance of

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not t ...

and

services Service may refer to: Activities * Administrative service, a required part of the workload of university faculty * Civil service, the body of employees of a government * Community service, volunteer service for the benefit of a community or a p ...

are made possible by automated production that allow for goods to be distributed based on need rather than merit.

Social relations

The fundamental goal of socialism from the view of

and

Friedrich Engels Friedrich Engels ( ,"Engels"
'' human freedom and

individual autonomy Self-ownership, also known as sovereignty of the individual or individual sovereignty, is the concept of property in one's own person, expressed as the moral or natural right of a person to have bodily integrity and be the exclusive controller ...

. Specifically, this refers to freedom from the alienation imposed upon

individuals An individual is that which exists as a distinct entity. Individuality (or self-hood) is the state or quality of being an individual; particularly (in the case of humans) of being a person unique from other people and possessing one's own need ...

in the form of coercive

as well as material

scarcity In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good. ...

, 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 Labour power (in german: Arbeitskraft; in french: force de travail) is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of w ...

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 State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

is "the institution of organised violence which is used by the

ruling class In sociology, the ruling class of a society is the social class who set and decide the political and economic agenda of society. In Marxist philosophy, the ruling class are the capitalist social class who own the means of production and by exte ...

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 dominated by the interests of the ruling class. It subjugates other classes, to protect and legitimize the existing economic system. After a

proletarian revolution A proletarian revolution or proletariat revolution is a social revolution in which the working class attempts to overthrow the bourgeoisie and change the previous political system. Proletarian revolutions are generally advocated by socialists, ...

, the state would initially become the instrument of the proletariat. Conquest of the state by the proletariat is a prerequisite to establishing a socialist system. As socialism is built, the role and scope of the state changes. Class distinctions, based on ownership of the means of production, gradually deteriorate. The concentration of means of production increasingly falls into state hands. Once all means of production become state property, the primary function of the state changes. Political rule via coercion over men diminishes through the creation and enforcement of laws, scientific administration and the direction of the processes of production. As a result, the state becomes an entity of economic coordination rather than a mechanism of class or political control and is no longer a state in the Marxian sense.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."

References

{{socialism Economic ideologies Economic systems Marxism Materialism Modes of production Political ideologies Political movements

Mode of production

Social relations

Role of the state

See also

References