Socialist mode of production

The socialist mode of production, or simply (Marxist) socialism or communism as Karl Marx and Friedrich Engels used the terms communism and socialism interchangeably,^[1]^[2] is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of production for use-value (i.e. direct satisfaction of human needs, or economic demands), therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of "to each according to his needs";^[3] Soviet models often distributed products based on the principle of "to each according to his contribution".^[4] 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. Surplus value goes to the working class and hence society as a whole.^[5]

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.^[6] 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,^[7] 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. Instead, Marx called it a communist society that has not yet reached its higher-stage.^[8] The term socialism was popularized during the Russian Revolution by Vladimir Lenin. 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, profit, interest and wage labour would not operate and apply to Marxist socialism.^[9]

^ Steele, David (1992). From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation. Open Court Publishing Company. pp. 44–45. ISBN 978-0-87548-449-5. By 1888, the term 'socialism' was in general use among Marxists, who had dropped 'communism', now considered an old fashioned term meaning the same as 'socialism'. ... At the turn of the century, Marxists called themselves socialists. ... The definition of socialism and communism as successive stages was introduced into Marxist theory by Lenin in 1917 ... , the new distinction was helpful to Lenin in defending his party against the traditional Marxist criticism that Russia was too backward for a socialist revolution.
^ Hudis, Peter; Vidal, Matt, Smith, Tony; Rotta, Tomás; Prew, Paul, eds. (September 2018–June 2019). The Oxford Handbook of Karl Marx. "Marx's Concept of Socialism". Oxford University Press. ISBN 978-0-19-069554-5. doi:10.1093/oxfordhb/9780190695545.001.0001. "Marx used many terms to refer to a post-capitalist society—positive humanism, socialism, Communism, realm of free individuality, free association of producers, etc. He used these terms completely interchangeably. The notion that 'socialism' and 'Communism' are distinct historical stages is alien to his work and only entered the lexicon of Marxism after his death."
^ Marx, Karl (1875). "Part I". Critique of the Gotha Program.
^ Gregory and Stuart, Paul and Robert (2003). Comparing Economic Systems in the Twenty-First. South-Western College Pub. p. 118. ISBN 0-618-26181-8. "Under socialism, each individual would be expected to contribute according to capability, and rewards would be distributed in proportion to that contribution. Subsequently, under communism, the basis of reward would be need."
^ "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.
^ Marx, Karl (1875). "Part I". Critique of the Gotha Program. Marxists Internet Archive. Retrieved 8 March 2019.
^ 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.

[1] Steele, David (1992). From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation. Open Court Publishing Company. pp. 44–45. ISBN 978-0-87548-449-5. By 1888, the term 'socialism' was in general use among Marxists, who had dropped 'communism', now considered an old fashioned term meaning the same as 'socialism'. ... At the turn of the century, Marxists called themselves socialists. ... The definition of socialism and communism as successive stages was introduced into Marxist theory by Lenin in 1917 ... , the new distinction was helpful to Lenin in defending his party against the traditional Marxist criticism that Russia was too backward for a socialist revolution.

[2] Hudis, Peter; Vidal, Matt, Smith, Tony; Rotta, Tomás; Prew, Paul, eds. (September 2018–June 2019). The Oxford Handbook of Karl Marx. "Marx's Concept of Socialism". Oxford University Press. ISBN 978-0-19-069554-5. doi:10.1093/oxfordhb/9780190695545.001.0001. "Marx used many terms to refer to a post-capitalist society—positive humanism, socialism, Communism, realm of free individuality, free association of producers, etc. He used these terms completely interchangeably. The notion that 'socialism' and 'Communism' are distinct historical stages is alien to his work and only entered the lexicon of Marxism after his death."

[3] Marx, Karl (1875). "Part I". Critique of the Gotha Program.

[4] Gregory and Stuart, Paul and Robert (2003). Comparing Economic Systems in the Twenty-First. South-Western College Pub. p. 118. ISBN 0-618-26181-8. "Under socialism, each individual would be expected to contribute according to capability, and rewards would be distributed in proportion to that contribution. Subsequently, under communism, the basis of reward would be need."

[5] "Socialism". Glossary of Terms. Marxists Internet Archive. Retrieved 20 February 2013.

[6] McNally, David (1993). Against the Market: Political Economy, Market Socialism and the Marxist Critique. Verso. ISBN 978-0-86091-606-2.

[7] 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.

[GothaCritique-8] Marx, Karl (1875). "Part I". Critique of the Gotha Program. Marxists Internet Archive. Retrieved 8 March 2019.

[9] 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.

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