Socialist mode of production

In Marxist theory, the socialist mode of production, also referred to as lower-stage of communism or simply socialism as Karl Marx and Friedrich Engels used the terms socialism and communism interchangeably, refers to a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism. The Marxist definition of socialism is an economic transition where the sole criterion for production is use-value and therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning while distribution of products is based on the principle of 'to each according to his contribution'. The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management so that social surplus goes to the working class and hence society as a whole. The Marxian conception of socialism stands in contrast to other early conceptions of socialism, most notably early forms of market socialism based on classical economics such as mutualism and Ricardian socialism. Unlike the Marxian conception, these conceptions of socialism retained commodity exchange (markets) for labour and the means of production seeking to perfect the market process. The Marxist idea of socialism was also heavily opposed to utopian socialism. Although Marx and Engels wrote very little on socialism and neglected to provide any details on how it might be organized, numerous social scientists and neoclassical economists have used Marx's theory as a basis for developing their own models of socialist economic systems. The Marxist view of socialism served as a point of reference during the socialist calculation debate. Marx himself did not use the term socialism to refer to this development, but he rather called it a communist society that has not yet reached its higher-stage. The term socialism in reference to this societal organization was popularized during the Russian Revolution by Vladimir Lenin. This view is consistent with and helped to inform early conceptions of socialism where the law of value no longer directs economic activity and therefore monetary relations in the form of exchange-value, profit, interest and wage labour would not operate and apply to Marxist socialism. Karl Marx described a socialist society as such: Socialism is a post-commodity economic system, meaning that production is carried out to directly produce use-value (to directly satisfy human needs, or economic demands) as opposed to being produced with a view to generating a profit. The stage in which the accumulation of capital was viable and effective is rendered insufficient at the socialist stage of social and economic development, leading to a situation where production is carried out independently of capital accumulation in a supposedly planned fashion. However, there have been other conceptions of economic planning, including decentralised and participatory planning. One of Marx's main manuscripts is a postum work called Grundrisse which was published in 1953. In this work, most areas of Marx's thinking output are explored, including production, consumption, distribution, social impact of capitalism, communism as the next level after capitalism as a live model for humans emphasizing fair distribution of goods, equality and the optimum environment for humans to live in to develop themselves to their best capabilities (art, politics and philosophy, among others) in order to achieve happiness and to satisfy intrinsic needs (whatever they may be). The goal of Marx was to design a social system which eliminates the differences in classes between the proletariat and the bourgeoise. By achieving this elimination, the tension and the power differences which force the workers to work under bad conditions with way too low salaries (loans) are gone. According to Marx, capitalism was a system which was guarateed to lead to a secured downfall because big companies would buy small companies, leading to monopolism, so there would be a very small population owning all the money and power. There would be a huge number of people having no money and therefore no potential to buy products from the capitalistic production system. What Marx oversaw was that the loan-workers were paid as such that they were and still are able to buy products from the capitalistic production system. In other words, the workers became as essential part to assure the capitalistic system is still alive and dominant in most of world's nations. In contrast to capitalism which relies upon the coercive market forces to compel capitalists to produce use-values as a byproduct of the pursuit of profit, socialist production is to be based on the rational planning of use-values and coordinated investment decisions to attain economic goals. As a result, the cyclical fluctuations that occur in a capitalist market economy would not be present in a socialist economy. The value of a good in socialism is its physical utility rather than its embodied labour, cost of production and exchange value as in a capitalist system. Socialism would make use of incentive-based systems and inequality would still exist, but only to a diminishing extent as all members of society would be worker-owners. This eliminates the severity of previous tendencies towards inequality and conflicts arising over ownership of the means of production and property income accruing to a small class of owners. The method of compensation and reward in a socialist society would be based on an authentic meritocracy along the principle of 'From each according to his ability, to each according to his contribution'. The advanced stage of socialism, referred to as the upper-stage communism in the Critique of the Gotha Programme, is based on the socialist mode of production, but it is differentiated from lower-stage socialism in a few fundamental ways. While socialism implies public ownership (by a proletarian semi-state apparatus) or cooperative ownership (by a worker cooperative enterprise), communism would be based on common ownership of the means of production. Class distinctions based on ownership of capital cease to exist, along with the need for a state. A superabundance of goods and services are made possible by automated production that allow for goods to be distributed based on need rather than merit. The fundamental goal of socialism from the view of Karl Marx and Friedrich Engels was the realization of human freedom and individual autonomy. Specifically, this refers to freedom from the alienation imposed upon individuals in the form of coercive social relations as well as material scarcity, whereby the individual is compelled to engage in activities merely to survive to reproduce his or herself. The aim of socialism is to provide an environment whereby individuals are free to express their genuine interests, creative freedom and desires unhindered by forms of social control that force individuals to work for a class of owners who expropriate and live off the surplus product.