Socialization (economics)
Encyclopedia
In economic discourse, socialization has several different but related connotations. In socialist economics, the term usually refers to the process whereby production is reorganized away from producing for private profit to producing goods and services directly for use
, along with the end of the laws of capitalism
, and in its most developed form, the end of monetary
valuation and monetary calculation in production. The phrase "social production" has been used to classify the form of workplace relationships and ownership structure of the open-source software
movement.
Socialization has also been used to refer to social ownership, a form of ownership distinct from employee-owned cooperatives, public-ownership and private-ownership. Economists such as John Roemer
, Pat Devine
and Alec Nove have advocated for socially owned enterprises as a major component for hypothetical socialist economies, defining social ownership as ownership of an enterprise by those affected by the use of the assets involved.
In the theoretical work of Karl Marx
and Frederich Engels, socialization refers to the process of transforming an economic activity from a solitary activity to a social relationship. Socialization is a process that begins to take place under capitalism
and is a hallmark of the capitalist mode of production in the form of socialization of production in the factory and socialization of labor by transforming the process of producing goods and services into a highly collective and mechanized process. This occurs due to centralization of capital
and in industries where there are increasing returns to scale. In Marxist theory, a contradiction develops between the socialized production and the private ownership and appropriation of the surplus value and profits, leading to a situation where socialization is expanded in scope to include socialization of the surplus value in the form of cooperative ownership over the means of production; a transition from capitalism to socialism
.
.
Pat Devine defines social ownership as "...ownership by those who are affected by - who have an interest in - the use of the assets involved", distinguishing it from other forms of ownership and 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."
John Roemer's model of market socialism
features a form of social ownership where individuals would receive a non-transferable coupon entitling them to a share of the profits generated by autonomous non-governmental, publicly owned enterprises.
This socialization of production and centralization of capital that takes place under capitalism lays the foundations for a socialist economy. Socialism entails ownership of the socialized means of production by the workers engaged in the production (see: Worker cooperative
) and social, or worker control in the appropriation of the socially produced surplus product (profit), either in the form of economic planning
and planned investment, or by autonomous worker cooperatives. The establishment of social ownership over the means of production resolves the contradiction between social production and individual exchange/appropriation under capitalism.
Socialization of the workplace is contrasted to rigid hierarchy and bureaucracy, as workers gain more autonomy, collective decision-making power and control over the output they produce in a socialized work environment. Socialization of industry is different from nationalization
, which can, but usually does not imply the socialization of the workplace; socialization of industry can take place in private or cooperative-owned enterprises. In a capitalist economy, socialization entails "commodification" and is therefore limited. Socialization therefore takes a different form in the capitalist mode of production
than in the socialist mode of production
.
identifies the emergence of the open software movement and peer-to-peer production as an emergent alternative mode of production
to the capitalist economy that is based on collaborative self-management, common ownership of resources, and the (direct) production of use-values through the free cooperation of producers who have access to distributed capital.
Commons-based peer production
generally involves developers who produce goods and services with no aim to profit directly, but freely contribute to a project relying upon an open common pool of resources and software code. In both cases, production is carried out directly for use - software is produced solely for their use-value.
or Municipalization
). It has also been applied to any tax-funded programs, whether privately run or government-run. The term "socialized" is usually used in a pejorative sense, most commonly in reference to publicly funded health care programs (See: socialized medicine
).
It is important to note that in economic and Marxist terminology, publicly funded or even state-run, universal healthcare services would not constitute a "socialist" industry because the employees and workers do not own their means of production and participate in the management of the enterprise. Furthermore, a majority of universal healthcare programs are simply publicly subsidized, privately owned capitalist health and pharmaceutical firms; private ownership of the means of production and private profit-generating firms being the antithesis of socialism.
Production for use
Production for use is a defining criterion of a socialist economy and distinguishes socialism from capitalism...
, along with the end of the laws of capitalism
Law of value
-General: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 against Pierre-Joseph Proudhon, with reference to David Ricardo's economics...
, and in its most developed form, the end of monetary
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
valuation and monetary calculation in production. The phrase "social production" has been used to classify the form of workplace relationships and ownership structure of the open-source software
Open-source software
Open-source software is computer software that is available in source code form: the source code and certain other rights normally reserved for copyright holders are provided under a software license that permits users to study, change, improve and at times also to distribute the software.Open...
movement.
Socialization has also been used to refer to social ownership, a form of ownership distinct from employee-owned cooperatives, public-ownership and private-ownership. Economists such as John Roemer
John Roemer
John E. Roemer is an American economist and political scientist. He is currently the Elizabeth S. and A. Varick Stout Professor of Political Science and Economics at Yale University. Prior to joining Yale, he was on the economics faculty at the University of California, Davis, and before entering...
, Pat Devine
Pat Devine
Pat Devine is a radical economist concerned mainly with industrial economics and comparative economic systems. He made one of the most thorough descriptions of a future economy where allocation is done by democratic planning and social ownership without any social division of labour...
and Alec Nove have advocated for socially owned enterprises as a major component for hypothetical socialist economies, defining social ownership as ownership of an enterprise by those affected by the use of the assets involved.
In the theoretical work of Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
and Frederich Engels, socialization refers to the process of transforming an economic activity from a solitary activity to a social relationship. Socialization is a process that begins to take place under capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
and is a hallmark of the capitalist mode of production in the form of socialization of production in the factory and socialization of labor by transforming the process of producing goods and services into a highly collective and mechanized process. This occurs due to centralization of capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
and in industries where there are increasing returns to scale. In Marxist theory, a contradiction develops between the socialized production and the private ownership and appropriation of the surplus value and profits, leading to a situation where socialization is expanded in scope to include socialization of the surplus value in the form of cooperative ownership over the means of production; a transition from capitalism to socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
.
In Economics
Socialist economists have defined social ownership and social property differently. In some instances, it is used in reference to worker-managed and employee-owned enterprises. But it is separated and distinct from public ownership and the process of nationalizationNationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
.
Pat Devine defines social ownership as "...ownership by those who are affected by - who have an interest in - the use of the assets involved", distinguishing it from other forms of ownership and 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."
John Roemer's model of market socialism
Market socialism
Market socialism refers to various economic systems where the means of production are either publicly owned or cooperatively owned and operated for a profit in a market economy. The profit generated by the firms system would be used to directly remunerate employees or would be the source of public...
features a form of social ownership where individuals would receive a non-transferable coupon entitling them to a share of the profits generated by autonomous non-governmental, publicly owned enterprises.
In Marxist theory
Socialization is a process that begins to takes place in capitalism as large-scale manufacturing based on a vertical division of labor displaces "cottage industry"; small-scale and family-owned production shops. This process transforms production into an increasingly social and collective process, but appropriation of the social product in the form of private profit continues to be an individual or private affair by investors and private owners of the enterprise. Furthermore, exchange of the commodities produced is the private act of a small group of capitalists or an individual owner. As the process of socialization expands, a contradiction between the socialized nature of production and the individual nature of appropriation of the surplus product arises, coinciding with the obsolescence of the functions performed by the capitalists (the private owners).This socialization of production and centralization of capital that takes place under capitalism lays the foundations for a socialist economy. Socialism entails ownership of the socialized means of production by the workers engaged in the production (see: Worker cooperative
Worker cooperative
A worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...
) and social, or worker control in the appropriation of the socially produced surplus product (profit), either in the form of economic planning
Economic planning
Economic planning refers to any directing or planning of economic activity outside the mechanisisms of the market, in an attempt to achieve specific economic or social outcomes. Planning is an economic mechanism for resource allocation and decision-making in contrast with the market mechanism...
and planned investment, or by autonomous worker cooperatives. The establishment of social ownership over the means of production resolves the contradiction between social production and individual exchange/appropriation under capitalism.
Socialization of the workplace is contrasted to rigid hierarchy and bureaucracy, as workers gain more autonomy, collective decision-making power and control over the output they produce in a socialized work environment. Socialization of industry is different from nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
, which can, but usually does not imply the socialization of the workplace; socialization of industry can take place in private or cooperative-owned enterprises. In a capitalist economy, socialization entails "commodification" and is therefore limited. Socialization therefore takes a different form in the capitalist mode of production
Capitalist mode of production
In Marx's critique of political economy, the capitalist mode of production is the production system of capitalist societies, which began in Europe in the 16th century, grew rapidly in Western Europe from the end of the 18th century, and later extended to most of the world...
than in the socialist mode of production
Socialism (Marxism)
In Marxist theory, socialism, or the socialist mode of production, refers to a specific historical phase of economic development and its corresponding set of social relations that eventually supersede capitalism...
.
Open-source software
Michel BauwensMichel Bauwens
Michel Bauwens is a Belgian Peer-to-Peer theorist and an active writer, researcher and conference speaker on the subject of technology, culture and business innovation.-Biography:...
identifies the emergence of the open software movement and peer-to-peer production as an emergent alternative mode of production
Mode of production
In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of:...
to the capitalist economy that is based on collaborative self-management, common ownership of resources, and the (direct) production of use-values through the free cooperation of producers who have access to distributed capital.
Commons-based peer production
Commons-based peer production
Commons-based peer production is a term coined by Harvard Law School professor Yochai Benkler to describe a new model of socio-economic production in which the creative energy of large numbers of people is coordinated into large, meaningful projects mostly without traditional hierarchical...
generally involves developers who produce goods and services with no aim to profit directly, but freely contribute to a project relying upon an open common pool of resources and software code. In both cases, production is carried out directly for use - software is produced solely for their use-value.
Misuse of the term
Particularly in the United States, the term "socialization" has been mistakenly used to refer to any state or government-owned industry or service (the proper term for such being either nationalizationNationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
or Municipalization
Municipalization
Municipalization is the transfer of corporations or other assets to municipal ownership. The transfer may be from private ownership or from other levels of government. It is the opposite of privatization and is different from nationalization.-Services:There have been two main waves of...
). It has also been applied to any tax-funded programs, whether privately run or government-run. The term "socialized" is usually used in a pejorative sense, most commonly in reference to publicly funded health care programs (See: socialized medicine
Socialized medicine
Socialized medicine is a term used to describe a system for providing medical and hospital care for all at a nominal cost by means of government regulation of health services and subsidies derived from taxation. It is used primarily and usually pejoratively in United States political debates...
).
It is important to note that in economic and Marxist terminology, publicly funded or even state-run, universal healthcare services would not constitute a "socialist" industry because the employees and workers do not own their means of production and participate in the management of the enterprise. Furthermore, a majority of universal healthcare programs are simply publicly subsidized, privately owned capitalist health and pharmaceutical firms; private ownership of the means of production and private profit-generating firms being the antithesis of socialism.
See also
- CooperativeCooperativeA cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
- Commons-based peer productionCommons-based peer productionCommons-based peer production is a term coined by Harvard Law School professor Yochai Benkler to describe a new model of socio-economic production in which the creative energy of large numbers of people is coordinated into large, meaningful projects mostly without traditional hierarchical...
- CapitalismCapitalismCapitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
- Marxian SocialismSocialism (Marxism)In Marxist theory, socialism, or the socialist mode of production, refers to a specific historical phase of economic development and its corresponding set of social relations that eventually supersede capitalism...
- SocializationSocializationSocialization is a term used by sociologists, social psychologists, anthropologists, political scientists and educationalists to refer to the process of inheriting and disseminating norms, customs and ideologies...
(General sociological definition) - Production for useProduction for useProduction for use is a defining criterion of a socialist economy and distinguishes socialism from capitalism...
, sometimes referred to as "socialized production" - Relations of productionRelations of productionRelations of production is a concept frequently used by Karl Marx and Friedrich Engels in their theory of historical materialism, and in Das Kapital...
- SocialismSocialismSocialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
- Socialized medicineSocialized medicineSocialized medicine is a term used to describe a system for providing medical and hospital care for all at a nominal cost by means of government regulation of health services and subsidies derived from taxation. It is used primarily and usually pejoratively in United States political debates...
- Social peer-to-peer production
- Workplace democracyWorkplace democracyWorkplace democracy is the application of democracy in all its forms to the workplace....