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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, ...
'' and ''
socialism Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes th ...
'' 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, private ...
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 Marxist philosophy or Marxist theory are works in philosophy that are strongly influenced by Karl Marx's materialist approach to theory, or works written by Marxists. Marxist philosophy may be broadly divided into Western Marxism, which drew fro ...
. The
Marxist Marxism is a left-wing to far-left method of socioeconomic analysis that uses a materialist interpretation of historical development, better known as historical materialism, to understand class relations and social conflict and a dialecti ...
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 The law of the value of commodities (German: ''Wertgesetz der Waren''), known simply as the law of value, is a central concept in Karl Marx's critique of political economy first expounded in his polemic '' The Poverty of Philosophy'' (1847) again ...
no longer directs economic activity. Marxist production for use is coordinated through conscious
economic planning Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources ...
. 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". The social relations of socialism are characterized by the
proletariat The proletariat (; ) is the social class of wage-earners, those members of a society whose only possession of significant economic value is their labour power (their capacity to work). A member of such a class is a proletarian. Marxist philo ...
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 a ...
, 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 In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cos ...
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 colou ...
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. Soc ...
as a whole. The Marxian conception of
socialism Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes th ...
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 owned ...
based on
classical economics Classical economics, classical political economy, or Smithian economics is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam S ...
such as mutualism and Ricardian socialism. Unlike the Marxian conception, these conceptions of socialism retained commodity exchange (
markets 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 ...
) 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 ...
. 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. 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 The Russian Revolution was a period of political and social revolution that took place in the former Russian Empire which began during the First World War. This period saw Russia abolish its monarchy and adopt a socialist form of government ...
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,
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
,
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 socioeconomics, socioeconomic relationship between a workforce, worker and an employment, employer in which the w ...
would not operate and apply to Marxist socialism.


Mode of production

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 ...
described a socialist society as such:
Socialism Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes th ...
is a post-
commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...
economic system and production is carried out to directly produce use-value rather than toward generating
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
. 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 o ...
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 Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group. Conce ...
and participatory planning. 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
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, private ...
.
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, ...
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 The proletariat (; ) is the social class of wage-earners, those members of a society whose only possession of significant economic value is their labour power (their capacity to work). A member of such a class is a proletarian. Marxist philo ...
and the
bourgeoisie The bourgeoisie ( , ) is a social class, equivalent to the middle or upper middle class. They are distinguished from, and traditionally contrasted with, the proletariat by their affluence, and their great cultural and financial capital. Th ...
. 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 language, 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 situati ...
. 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 ar ...
and power. 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 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 A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
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 Meritocracy (''merit'', from Latin , and ''-cracy'', from Ancient Greek 'strength, power') is the notion of a political system in which economic goods and/or political power are vested in individual people based on talent, effort, and achiev ...
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. However, it is different from lower-stage socialism in fundamental ways. While
socialism Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes th ...
implies
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 ...
(by a proletarian semi-state apparatus) or
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 and democratically-control ...
(by a worker cooperative enterprise), communism would be based on
common ownership Common ownership refers to holding the assets of an organization, enterprise or community indivisibly rather than in the names of the individual members or groups of members as common property. Forms of common ownership exist in every econom ...
of 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 a ...
. Class distinctions based on
ownership Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...
of
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used fo ...
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 ...
and services 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
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"
'' human freedom and individual autonomy. Specifically, this refers to
freedom Freedom is understood as either having the ability to act or change without constraint or to possess the power and resources to fulfill one's purposes unhindered. Freedom is often associated with liberty and autonomy in the sense of "giving one ...
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 nee ...
in the form of coercive
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 ...
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 Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx in his critique of political economy. Roughly speaking, it is the extra goods produced above the amount needed for a community of workers to ...
. As a set of social relations, socialism is defined by the degree to which economic activity in society is planned by the
associated producers Associated Producers was an American film production and distribution company of the silent era. Inspired by the foundation of United Artists, the company brought together a group of leading film directors who hoped running their own company woul ...
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 The division of labour is the separation of the tasks in any economic system or organisation so that participants may specialise (specialisation). Individuals, organizations, and nations are endowed with, or acquire specialised capabilities, an ...
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 ex ...
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 An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entit ...
. 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 The proletariat (; ) is the social class of wage-earners, those members of a society whose only possession of significant economic value is their labour power (their capacity to work). A member of such a class is a proletarian. Marxist philo ...
. 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."


See also

* Capitalist mode of production *
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, ...
*
Critique of political economy Critique of political economy or critique of economy is a form of social critique that rejects the various social categories and structures that constitute the mainstream discourse concerning the forms and modalities of resource allocation and ...
*
Economic planning Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources ...
* Green socialism *
Law of value The law of the value of commodities (German: ''Wertgesetz der Waren''), known simply as the law of value, is a central concept in Karl Marx's critique of political economy first expounded in his polemic '' The Poverty of Philosophy'' (1847) again ...
*
Marxism Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...
*
Marxian economics Marxian economics, or the Marxian school of economics, is a heterodox school of political economic thought. Its foundations can be traced back to Karl Marx's critique of political economy. However, unlike critics of political economy, Marxian ...
* Mode of production * Post-capitalism * Primary stage of socialism * Production for use *
Relations of production Relations of production (german: Produktionsverhältnisse, links=no) is a concept frequently used by Karl Marx and Friedrich Engels in their theory of historical materialism and in ''Das Kapital''. It is first explicitly used in Marx's publish ...
* Scientific socialism * Socialist calculation debate * Socialist economics *
Socialisation In sociology, socialization or socialisation (see spelling differences) is the process of internalizing the norms and ideologies of society. Socialization encompasses both learning and teaching and is thus "the means by which social and cul ...
*
Yellow socialism Yellow socialism or yellow unionism, was an economic system proposed in 1902 by Pierre Biétry, as an alternative to the " Red socialism" advocated in Marxism. Biétry envisioned workers organizing unions which would operate in parallel with grou ...


References

{{socialism Economic ideologies Economic systems Marxism Materialism Modes of production Political ideologies Political movements
Marxism Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...