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According to Elie Halevy, the term was coined independently by two groups advocating different ways of organizing society and economics: the Saint-Simonianss, and most likely Pierre Leroux, in the years 1831-33, and the followers of Robert Owen, around 1835. [Elie Halevy, Histoire du Socialisme Européen (Paris, Gallimard, 1948, pp. 17-18, note); originally published 1937] By the time of the Revolution of 1848 there were a variety of competing "socialisms", ranging from the utopian socialism of Charles Fourier to the self-described "scientific" socialism of Karl Marx and Friedrich Engels.
Depending on the context, the term socialism may refer either to these ideologies or any of their many lineal descendants. While these cover a very broad range of views, they have in common a belief that society ought to be run for the broad common good rather than for the benefit of a small economic elite. All "socialist" ideologies emphasize economic cooperation over economic competition; virtually all envision some sort of economic planning (many, but by no means all, favor central planning); all advocate placing at least some of the means of production -- and at least some of the distribution of goods and services -- into collective or cooperative ownership.
Historically, the ideology of socialism grew up hand in hand with the rise of organized labor. In many parts of the world, the two are still strongly associated with one another; in other parts, they have become two very distinct movements.
Since the 19th century, socialist ideas have developed and separated into many different streams. Notable ideologies that have been referred to using the label "socialism" are:
The German National Socialists (Nazis) claimed to be "socialist". However, these are generally considered conflicting ideologies (see Socialism and Nazism). Similarly, the Arab Socialist Ba'ath Party in Syria and Iraq claims to be in a tradition of secular, non-Marxian socialists.
Various Catholic clerical parties have at times referred to themselves as "Christian Socialists". Two examples are the Christian Social Party of Karl Lueger in Austria before and after World War I and the contemporary Christian Social Union in Bavaria. Most other socialists would consider these two parties to be "socialist" in name only. However, there are other individuals and groups, past and present, that are clearly both Christian and Socialist, such as the Frederick Denison Maurice, author of The Kingdom of Christ (1838), or the contemporary Christian Socialist Movement (CSM), affiliated with the British Labour Party. (See main article Christian socialism; see also Christian left.)
There are a few questions that point up some of the big differences among socialisms:
As in the realm of ideology, there is no single consensus what it means for a particular economic system to be called "socialist." Nearly all self-described socialists would agree that a socialist economy must be run for the benefit of the vast majority of the people (Marxists and many other socialists would say "the proletariat" or "the workers"; in countries where agriculture figures prominently, nearly all would also add peasant farmers to that) rather than for a small aristocratic, plutocratic, or capitalist class. Many, perhaps most, self-described socialists would say that socialism also entails democratic controlled of that economy, although they would differ vastly over the appropriate institutions of that democracy and over whether control should be centralized or highly dispersed. Similarly, they would differ over the extent to which that economy would involve markets, and if so whether markets would apply only to consumer goods or, in some cases, to the means of production (factory and farm equipment, for example). For consumer goods, this is simply a question of efficient distribution; for the means of production, this is a question of ownership of the economy, and therefore of control over it.
Many non-socialists use the expression "socialist economy" (or "socialization" of a sector of the economy) almost exclusively to refer to centralized control under government aegis: for example, consider the use of the term "socialized medicine" in the US by opponents of single-payer health care.
Both socialists and non-socialists are in general agreement that a socialist economy would not include private or estate ownership of large enterprises; there is less agreement on whether any such enterprises would be owned by society at large or (at least in some cases) owned cooperatively by their own workers.
It has been claimed, both by socialists and non-socialists, that the former Soviet Union and the Eastern Bloc had socialist economies, as the means of production were owned almost entirely by the state and the bulk of the economy was centrally controlled by the Communist Party acting through the state. Other socialists object to that label, because the people in those countries had little or no control over the government, and instead posit that these societies were state-capitalist, or as some Trotskyists would say, a "Deformed Worker's State". Trotskyists contend that the Stalinist economies fulfilled one criterion of a socialist economy, in that it was controlled by the state, but not the other criterion, that the state must be in turn democratically controlled by the workers. Many non-Marxist socialists would agree with the general outline of this, while perhaps dissenting from the statement that state control of the economy is one of the criteria of socialism. Further, many socialists would argue that the Soviet Union and its satellite states merely replaced a capitalist ruling class with a new ruling class, the coordinator class or nomenklatura, who played an extremely analogous role, managing the economy for their own benefit, or at least attempting to do so.
During the Soviet era, a common term used by communists to refer to their own economies was "actually existing socialism" (presumably as against any number of theoretically possible socialisms, but carrying an implicit statement that their economy was, indeed, socialist). Another similarly used term was (and is) "real socialist". Typically, when these terms were or are used by anyone outside of the particular parties that ruled these countries, they are placed in scare quotes and are used with at least mild irony.
Most past and present states ruled by parties of Communist orientation called (or call) themselves "Socialist", with the exception of the People's Republic of China in the Mao Zedong era, which called itself "Communist". However, in the western world they were usually all referred to as "Communist states". Once again, whether these states were socialist or not was (and is) disputed, with the large majority of today’s socialists contending that they were not socialist, for reasons directly analogous to those just discussed for a "socialist" economy.
There are also some who dispute whether it is appropriate to refer to any state, past, present, future, or hypothetical as "socialist", preferring to reserve that word for an economy or even a society, but not a state.
Although Marxists generally use the word "socialism" in the senses described above, another specifically Marxist use of the term is worth noting. Karl Marx, in his exposition of historical materialism, his Hegelian model of a supposedly inevitable outline of history, saw socialism as a phase of human society that would follow capitalism and precede communism. Marx is by no means consistent about this throughout his writings and is by no means clear about the expected characteristics of such a society, but is reasonably consistent in his belief in the inevitable revolutionary triumph of socialism over capitalism, and its eventual (apparently less revoutionary) transformation into communism.
According to Marx, this socialist society will be controlled by the industrial workers (the proletariat), whose familiarity with large, collective undertakings will be reflected in the character of this society. It will be a dictatorship of the proletariat contrasted to the existing dictatorship of the bourgeoisie (the capitalists). It is worth noting in this context that Marx was not necessarily advocating or predicting "dictatorship" in the sense that word is commonly used: he was referring to what class would be dominant. While Leninist dictatorship is arguably consistent with this vision, so is worker democracy, analogous to bourgeios democracy. This would still conform to Marx's (relatively undeveloped) model of the "dictatorship" of a class.
Again according to Marx, eventually the state would "wither away" and this "socialist" society will be replaced by a classless "communist" society. In holding this classless non-state as the ultimate goal, Marx expressed an ideal closer to that of anarchisn than of Leninism. Certainly, "withering away" does not seem to have been the project of any of the states erected in the name of Marxism.
As remarked above, some self-described socialists, especially those who identify as social democrats, but also including (for example) the reform-oriented Euro-communists (Marxist, but by no means Stalinist), advocate a mixed economy rather than a complete re-working of existing capitalist economies along socialist lines. These views also extend to many who would not describe themselves as "socialists".
In the most moderate formulation, collective ownership is typically limited to control of natural resources and public utilities. The rationale for prioritizing these is that natural resources are a common patrimony and that (all or some) public utilities are natural monopolies.
Others would extend a socialist approach to what they deem to be essential industries (to prevent certain capitalists from having a stranglehold on society), or those that inherently require massive concentration of capital (to keep such massive concentrations of wealth, and hence of power, out of private hands). There is also often a rationale of national defense or national sovereignty. Thus, many otherwise capitalist countries have, at least at times, nationalized such industries as steel, automobiles, or airplanes.
In such states, there is a mixed economy with varying degrees of government ownership and private ownership, and with various degrees either of central planning by the government or other cooperative planning.
Most socialist thinkers argue that free market economics, a hallmark of capitalist systems, generally results in profits for a few at the expense of the many. Communists in particular, and especially in the dozen decades before the breakup of the Soviet Union, were adamantly opposed to any compromise with capitalism, claiming that any economic system that permitted the private accumulation of wealth was inherently unjust (see: labor theory of value).
While few self-described communists support any scheme upholding private ownership of the means of production (except, perhaps, as a temporary disposition on the way to something purer), other socialists are split over this, arguing over whether to only moderate the workings of market capitalism to produce a more equitable distribution of wealth, or whether to expropriate the entire owning class to guarantee this distribution. Many socialists acknowledge the extreme complexity of designing other appropriate non-market mechanisms to identify demand, especially for non-essential goods. Some have put forward models of market socialism where markets exist, but an owning class does not.
Many opponents of socialism, particularly in America, claim that people generally prosper as a result of free market economies; hence, that capitalism works for the benefit of all, rather than merely for a wealthy elite. The extreme of this capitalist, anti-socialist ideological position is that any meddling with markets can only be to the public detriment, and that regardless of what inequities exist under capitalism, the result of any other system could only be worse for the average person.
In practice, many aspects of the socialist worldview and socialist policy have been integrated with capitalism in many European countries and in other parts of the world to form mixed economies. Social democracy typically involves state ownership of some corporations (considered strategically important to the people) and participation in ownership of the means of production by workers. This can include profit sharing and worker representation on decision-making boards of corporations. Social services are important in social democracies. Such services include social welfare for the disadvantaged and unemployment insurance.
Likewise, market economies in the United States and other capitalist countries have integrated some aspects of socialist economic planning. Democratic countries typically place legal limits on the centralization of capital through anti-trust laws and limits on monopolies, though the extent to which these laws are actually enforced has to do with the balance of power between the actually existing or emerging monopoly firms. Ownership of stock has become common for middle class workers, both in companies they work for and in other companies (see mutual fund). Unionization has led to profit sharing. Social welfare and unemployment insurance are mandated by law in the US, UK, Canada and other market economies. There is a lively debate today as to whether the world is moving closer to or farther away from "socialism", as defined by different people. Another component of this debate is whether or not these developments are to be hailed.
A number of leading thinkers, historians, economists and historians have raised many issues with socialist theory. These individuals include Milton Friedman, Ayn Rand, Ludwig Von Mises, Friedrich Hayek, and Joshua Muravchik, to name a few. Most of their objections and critiques seem directed more at a centrally planned economy (not a part of all proposed socialisms), some at socialism and Marxism in general, but because these distinctions are relatively difficult to tease out of their writings, it is probably useful to take them up in a single context. These objections and critiques usually fall into the following categories:
According to the critics of socialism, under socialism incentives either play a minimal role or are ignored totally. A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity. Socialism, say the critics, is based on the theory that incentives don't matter.
This is essentially the point made by Slavenka Drakulic in How We Survived Communism & Even Laughed (ISBN 0060975407), where she argues that a major contributor to the fall of state communism was the failure to produce the basic consumer goods that its people desired. She argues that, because of the makeup of the leadership of these regimes, the concerns of women got particularly short shrift. She illustrates this, in particular, by the system's failure to produces washing machines.
Of the many forms of socialism, the one that appears to have made the greatest effort to address this criticism is participatory economics, or "Parecon." Parecon envisions an iterative process to match what consumers want with what producers are ready to offer, while keeping personal consumption requests anonymous. [1]
According to the critics of socialism, the price system in a market economy guides economic activity so flawlessly that most people don't appreciate its importance or see its effect. Adam Smith dubbed this effect the "unseen hand" of the market. Market prices transmit information about relative scarcity and then efficiently coordinate economic activity. The economic content of prices provides incentives that promote economic efficiency.
Some forms of socialism propose to abolish markets entirely. All, or nearly all, advocate some form of governmental or other "social" interference with market prices. Free-market economists argue that a controlled or fixed price always transmits misleading information about relative scarcity and that inappropriate behavior results from a controlled price, because false information has been transmitted by an artificial price.
Obviously, a command economy tries to replace the invisible hand with a highly visible one (what libertarian Sharon Harris of Advocates for Self-Government calls a "visible fist" [1]). The claim is that a more rational result can be achieved by the efforts of economic coordinators rather than by market forces. While some socialists oppose a centrally planned economy, all advocate the overt inclusion of non-economic factors in determining economic decisions.
Socialists of all stripes seem to be united in their rejection of the claim of market rationality in determining prices. Among the issues they point out, and which they say would be handled better by some other mechanism, are:
Many historical and proposed forms of socialism would not operate under a profit-and-loss system of accounting. All these forms of socialism give less of a role to competition than does a capitalist economy. A profit system is an monitoring mechanism which continually evaluates the economic performance of every business enterprise. In theory, at least, under capitalism the firms that are the most efficient and most successful at serving the public interest are rewarded with profits. Firms that operate inefficiently and fail to serve the public interest are penalized with losses.
By rewarding success and penalizing failure, the profit system provides a strong disciplinary mechanism which continually redirects resources away from weak, failing, and inefficient firms toward those firms which are the most efficient and successful at serving the public. A competitive profit system ensures a constant re-optimization of resources and moves the economy toward greater levels of efficiency. Unsuccessful firms cannot escape the strong discipline of the marketplace under a profit/loss system. Competition forces companies to serve the public interest or suffer the consequences.
Under central planning, there is no profit-and-loss system of accounting to accurately measure the success or failure of various programs. Without profits, critics argue, there is no way to discipline firms that fail to serve the public interest and no way to reward firms that do. There is no efficient way to determine which programs should be expanded and which ones should be contracted or terminated.
Without competition, critics claim, centrally planned economies do not have an effective incentive structure to coordinate economic activity. This lack of incentives results in a spiraling cycle of poverty and misery. Instead of continually reallocating resources towards greater efficiency, a centrally planned economy falls into a vortex of inefficiency and failure.
In general, socialists do not address this argument head on, preferring to focus on the downside of the profit motive. For example, this argument can be seen in an article published by the Socialist Party (England and Wales), claiming that the profit motive inherently puts capitalism at odds with ecologically sound policy. http://www.socialismtoday.org/69/green.html.
Another defect of socialism, according to its detractors, is its disregard for the role of private property rights in creating incentives that foster economic growth and development. The failure of socialism around the world is seen as some as a "tragedy of commons" on a global scale.
The "tragedy of the commons" refers in its narrowest sense to the British experience of the sixteenth century when certain grazing lands were communally owned by villages and were made available for public use (or, more precisely, the use of those with rights in that common land). Because each individual had more of an incentive to maximize his (or her) own benefit from this common land than to be concerned for its sustainability, the land was eventually overgrazed and became worthless.
The line of argument is that when assets are publicly owned, there are no incentives in place to encourage wise stewardship. While private property creates incentives for conservation and the responsible use of property, public property encourages irresponsibility and waste. If everyone owns an asset, people act as if no one owns it. And when no one owns it, no one really takes care of it. Public ownership encourages neglect and mismanagement.
As Peruvian economist Hernando de Soto remarked, "you can travel in rural communities around the world and you will hear dogs barking, because even dogs understand property rights. It is only statist governments that have failed to understand property rights."
The socialist counterargument is that some things are almost inevitably commons, notably the quality of the physical environment. While the past and present communist states have an even worse record than capitalist states in this respect, many socialists today would argue that was due more to their non-democratic nature than to their socialist aspects and that, in principle, a democratic system of planning could achieve appropriate shared management of this inevitably shared resource. In fact, in practice, this is what even many otherwise capitalist societies have resorted to, imposing government regulations to restrict air and water pollution. (Paul Burkett makes a specifically Marxist case for socialism as being better able to address the issue of managing the environment in an article "Ecology and Marx’s Vision of Communism" in Socialism and Democracy, Vol. 17, No. 2 [1].)
It should be noted that the USA, and some others, have experimented with market solutions in the form of emissions trading. While certainly a market solution, emissions trading has certain aspects that are more socialist than capitalist, since it uses an artificially created market in which a government decides the number of emissions credits that will be in circulation and the rules under which they may be traded.An ideology or a group of ideologies
Traditional Socialism
The socio-political or intellectual movements basing themselves in the Marxist-Socialist tradition can generally be further divided into:
Other ideologies including the word "Socialism"
What distinguishes the various types of socialism
Note also that while many would say that socialism is defined by state ownership of the means of production, a certain degree of such state ownership is reasonably common in economies that would almost universally be considered capitalist. In Canada, Crown Corporations are responsible for various sectors of the economy deemed to be of strategic importance to the people (for example power generation). Even in the U.S., the federal government continues to run the post office, many local governments own power companies and other utilities, and various governments frequently intervene to subsidize or otherwise influence (though not to own) various sectors of the economy.An economic system
A state that exists, or has existed
See main article Communist stateThe Socialist society that will succeed Capitalism
Socialism and the mixed economy
Opposition and Criticisms of Socialism
Incentives
Prices
Profits and Losses
Private Property Rights