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The Nicaraguan Revolution encompassed the rising opposition to the Somoza dictatorship in the 1960s and 1970s, the campaign led by the Sandinista National Liberation Front (FSLN) to violently oust the dictatorship in 1978-79, the subsequent efforts of the FSLN to govern Nicaragua from 1979 until 1990[157] and the socialist measures which included widescale agrarian reform[158][159] and educational programs.[160] The People's Revolutionary Government was proclaimed on 13 March 1979 in Grenada which was overthrown by armed forces of the United States in 1983. The Salvadoran Civil War (1979–1992) was a conflict between the military-led government of El Salvador and the Farabundo Martí National Liberation Front (FMLN), a coalition or 'umbrella organization' of five socialist guerrilla groups. A coup on October 15, 1979 led to the killings of anti-coup protesters by the government as well as anti-disorder protesters by the guerillas, and is widely seen as the tipping point towards the civil war.[161] In 1982, the newly elected French socialist government of François Mitterrand made nationalizations in a few key industries, including banks and insurance companies.[162] Eurocommunism was a trend in the 1970s and 1980s in various Western European communist parties to develop a theory and practice of social transformation that was more relevant for a Western European country and less aligned to the influence or control of the Communist Party of the Soviet Union. Outside Western Europe, it is sometimes called Neocommunism.[163] Some Communist parties with strong popular support, notably the Italian Communist Party (PCI) and the Communist Party of Spain (PCE) adopted Eurocommunism most enthusiastically, and the Communist Party of Finland was dominated by Eurocommunists. The French Communist Party (PCF) and many smaller parties strongly opposed Eurocommunism and stayed aligned with the Communist Party of the Soviet Union until the end of the USSR. In the late 1970s and in the 1980s, the Socialist International had extensive contacts and discussion with the two powers of the Cold War, the United States and the Soviet Union, about East-West relations and arms control. Since then, the SI has admitted as member parties the Nicaraguan FSLN, the left-wing Puerto Rican Independence Party, as well as former Communist parties such as the Democratic Party of the Left of Italy and the Front for the Liberation of Mozambique (FRELIMO). The Socialist International aided social democratic parties in re-establishing themselves when dictatorship gave way to democracy in Portugal (1974) and Spain (1975). Until its 1976 Geneva Congress, the SI had few members outside Europe and no formal involvement with Latin America.[164] Mikhail Gorbachev, General Secretary of the Communist Party of the Soviet Union from 1985 until 1991 After Mao's death in 1976 and the arrest of the faction known as the Gang of Four, who were blamed for the excesses of the Cultural Revolution, Deng Xiaoping took power and led the People´s Republic of China to significant economic reforms. The Communist Party of China loosened governmental control over citizens' personal lives and the communes were disbanded in favor of private land leases. Thus, China's transition from a planned economy to a mixed economy named as "socialism with Chinese characteristics"[165] which maintained state ownership rights over land, state or cooperative ownership of much of the heavy industrial and manufacturing sectors and state influence in the banking and financial sectors. China adopted its current constitution on 4 December 1982. President Jiang Zemin and Premier Zhu Rongji led the nation in the 1990s. Under their administration, China's economic performance pulled an estimated 150 million peasants out of poverty and sustained an average annual gross domestic product growth rate of 11.2%.[166][167] At the Sixth National Congress of the Communist Party of Vietnam in December 1986, reformist politicians replaced the "old guard" government with new leadership.[168][169] The reformers were led by 71-year-old Nguyen Van Linh, who became the party's new general secretary.[168][169] Linh and the reformers implemented a series of free-market reforms – known as Đổi Mới ("Renovation") – which carefully managed the transition from a planned economy to a "socialist-oriented market economy".[170][171] Mikhail Gorbachev wished to move the USSR towards of Nordic-style social democracy, calling it "a socialist beacon for all mankind."[172][173] Prior to its dissolution in 1991, the USSR had the second largest economy in the world after the United States.[174] With the collapse of the Soviet Union, the economic integration of the Soviet republics was dissolved, and overall industrial activity declined substantially.[175] A lasting legacy remains in the physical infrastructure created during decades of combined industrial production practices. Many social democratic parties, particularly after the Cold war, adopted neoliberal market policies including privatisation, deregulation and financialisation. They abandoned their pursuit of moderate socialism in favour of market liberalism. By the 1980s, with the rise of conservative neoliberal politicians such as Ronald Reagan in the United States, Margaret Thatcher in Britain, Brian Mulroney in Canada and Augusto Pinochet in Chile, the Western welfare state was attacked from within. Monetarists and neoliberals attacked social welfare systems as impediments to private entrepreneurship. In the UK, Labour Party leader Neil Kinnock made a public attack against the entryist group Militant at the 1985 Labour Party conference. The Labour Party ruled that Militant was ineligible for affiliation with the Labour Party, and the party gradually expelled Militant supporters. The Kinnock leadership had refused to support the 1984–1985 miner's strike over pit closures, a decision that the party's left wing and the National Union of Mineworkers blamed for the strike's eventual defeat. In 1989, at Stockholm, the 18th Congress of the Socialist International adopted a new Declaration of Principles, saying: Democratic socialism is an international movement for freedom, social justice, and solidarity. Its goal is to achieve a peaceful world where these basic values can be enhanced and where each individual can live a meaningful life with the full development of his or her personality and talents, and with the guarantee of human and civil rights in a democratic framework of society.[176] In the 1990s, the British Labour Party, under Tony Blair, enacted policies based on the free market economy to deliver public services via the Private finance initiative. Influential in these policies was the idea of a "third Way" which called for a re-evalutation of welfare state policies.[177] In 1995, the Labour Party re-defined its stance on socialism by re-wording Clause IV of its constitution, effectively rejecting socialism by removing all references to public, direct worker or municipal ownership of the means of production. The Labour Party stated: "The Labour Party is a democratic socialist party. It believes that, by the strength of our common endeavour we achieve more than we achieve alone, so as to create, for each of us, the means to realise our true potential, and, for all of us, a community in which power, wealth, and opportunity are in the hands of the many, not the few."[178] Contemporary socialist politics African Kwame Nkrumah, the first President of Ghana and theorist of African socialism on a Soviet Union commemorative postage stamp. African socialism has been and continues to be a major ideology around the continent. Julius Nyerere was inspired by Fabian socialist ideals.[179] He was a firm believer in rural Africans and their traditions and ujamaa, a system of collectivisation that according to Nyerere was present before European imperialism. Essentially he believed Africans were already socialists. Other African socialists include Jomo Kenyatta, Kenneth Kaunda, Nelson Mandela and Kwame Nkrumah. Fela Kuti was inspired by socialism and called for a democratic African republic. In South Africa the African National Congress (ANC) abandoned its partial socialist allegiances after taking power, and followed a standard neoliberal route. From 2005 through to 2007, the country was wracked by many thousands of protests from poor communities. One of these gave rise to a mass movement of shack dwellers, Abahlali baseMjondolo that, despite major police suppression, continues to work for popular people's planning and against the creation of a market economy in land and housing. Asian In Asia, states with socialist economies — such as the People's Republic of China, North Korea, Laos and Vietnam — have largely moved away from centralised economic planning in the 21st century, placing a greater emphasis on markets. Forms include the Chinese socialist market economy and the Vietnamese socialist-oriented market economy. They utilise state-owned corporate management models as opposed to modelling socialist enterprise on traditional management styles employed by government agencies. In China living standards continued to improve rapidly despite the late-2000s recession, but centralized political control remained tight.[180] Brian Reynolds Myers in his book The Cleanest Race, and later supported by other academics,[181][182] dismisses the idea that Juche is North Korea's leading ideology, regarding its public exaltation as designed to deceive foreigners and that it exists to be praised and not actually read[183] pointing out that North Korea's latest constitution, of 2009, omits all mention of communism.[184] Though the authority of the state remained unchallenged under Đổi Mới, the government of Vietnam encourages private ownership of farms and factories, economic deregulation and foreign investment, while maintaining control over strategic industries.[171] The Vietnamese economy subsequently achieved strong growth in agricultural and industrial production, construction, exports and foreign investment. However, these reforms have also caused a rise in income inequality and gender disparities.[185][186][187] Elsewhere in Asia, some elected socialist parties and communist parties remain prominent, particularly in India and Nepal. The Communist Party of Nepal in particular calls for multi-party democracy, social equality, and economic prosperity.[188] In Singapore, a majority of the GDP is still generated from the state sector comprising government-linked companies.[189] In Japan, there has been a resurgent interest in the Japanese Communist Party among workers and youth.[190][191] In Malaysia, the Socialist Party of Malaysia got its first Member of Parliament, Dr. Jeyakumar Devaraj, after the 2008 general election. In 2010, there were 270 kibbutzim in Israel. Their factories and farms account for 9% of Israel's industrial output, worth US$8 billion, and 40% of its agricultural output, worth over $1.7 billion.[192] Some Kibbutzim had also developed substantial high-tech and military industries. For example, in 2010, Kibbutz Sasa, containing some 200 members, generated $850 million in annual revenue from its military-plastics industry.[193] European Alexis Tsipras, socialist Prime Minister of Greece who led the Coalition of the Radical Left (SYRIZA) through a victory in the Greek legislative election, 2015. The United Nations World Happiness Report 2013 shows that the happiest nations are concentrated in northern Europe, where the Nordic model of social democracy persists, with Denmark topping the list. The Nordic countries ranked highest on the metrics of real GDP per capita, healthy life expectancy, having someone to count on, perceived freedom to make life choices, generosity and freedom from corruption.[194] The objectives of the Party of European Socialists, the European Parliament's socialist and social-democratic bloc, are now "to pursue international aims in respect of the principles on which the European Union is based, namely principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law." As a result, today, the rallying cry of the French Revolution – "Egalité, Liberté, Fraternité" – which overthrew absolutism and ushered industrialisation into French society, are promoted as essential socialist values.[195] To the left of the PES at the European level is the Party of the European Left, (PEL; also commonly abbreviated "European Left") which is a political party at the European level and an association of democratic socialist, socialist[196] and communist[196] political parties in the European Union and other European countries. It was formed in January 2004 for the purposes of running in the 2004 European Parliament elections. PEL was founded on 8–9 May 2004 in Rome.[197] Elected MEPs from member parties of the European Left sit in the European United Left–Nordic Green Left (GUE/NGL) group in the European parliament. The socialist Left Party in Germany grew in popularity[198] due to dissatisfaction with the increasingly neoliberal policies of the SPD, becoming the fourth biggest party in parliament in the general election on 27 September 2009.[199] Communist candidate Dimitris Christofias won a crucial presidential runoff in Cyprus, defeating his conservative rival with a majority of 53%.[200] In Ireland, in the 2009 European election, Joe Higgins of the Socialist Party took one of three seats in the capital Dublin European constituency. In Denmark, the Socialist People's Party (SF or Socialist Party for short) more than doubled its parliamentary representation to 23 seats from 11, making it the fourth largest party.[201] In 2011, the socialist parties of Social Democrats, Socialist People's Party and the Danish Social Liberal Party formed government, after a slight victory over the liberal parties. They were led by Helle Thorning-Schmidt, and had the Red-Green Alliance as a supporting party. In Norway, the Red-Green Coalition consists of the Labour Party (Ap), the Socialist Left Party (SV), and the Centre Party (Sp), and governed the country as a majority government from the 2005 general election until 2013. In the Greek legislative election of 2015, the Coalition of the Radical Left (SYRIZA), led by Alexis Tsipras, won a legislative election for the first time while the Communist Party of Greece won 15 seats in parliament. SYRIZA has been characterized as an anti-establishment party,[202] whose success has sent "shock-waves across the EU".[203] In the UK, the National Union of Rail, Maritime and Transport Workers put forward a slate of candidates in the 2009 European Parliament elections under the banner of No to EU – Yes to Democracy, a broad left-wing alter-globalisation coalition involving socialist groups such as the Socialist Party, aiming to offer an alternative to the "anti-foreigner" and pro-business policies of the UK Independence Party.[204][205][206] In the following May 2010 UK general election, the Trade Unionist and Socialist Coalition, launched in January 2010[207] and backed by Bob Crow, the leader of the National Union of Rail, Maritime and Transport Workers union (RMT), other union leaders and the Socialist Party among other socialist groups, stood against Labour in 40 constituencies.[208][209] The Trade Unionist and Socialist Coalition plans to contest the 2011 elections, having gained the endorsement of the RMT June 2010 conference.[210] In France, the Revolutionary Communist League (LCR) candidate in the 2007 presidential election, Olivier Besancenot, received 1,498,581 votes, 4.08%, double that of the Communist candidate.[211] The LCR abolished itself in 2009 to initiate a broad anti-capitalist party, the New Anticapitalist Party, whose stated aim is to "build a new socialist, democratic perspective for the twenty-first century".[212] On 25 May 2014 in Spain the left wing party Podemos entered candidates for the 2014 European parliamentary elections, some of which were unemployed. In a surprise result, it polled 7.98% of the vote and thus was awarded five seats out of 54.[213][214] while the older United Left was the third largest overall force obtaining 10,03 % and 5 seats, 4 more than the previous elections.[215] All around Europe and in some places of Latin America there exists a social center and Squatting movement mainly inspired by autonomist and anarchist ideas.[216][217] North American Members of the Democratic Socialists of America march at the Occupy Wall Street protest in New York. According to a 2013 article in The Guardian, "Contrary to popular belief, Americans don't have an innate allergy to socialism. Milwaukee has had several socialist mayors (Frank Zeidler, Emil Seidel and Daniel Hoan), and there is currently an independent socialist in the US Senate, Bernie Sanders of Vermont."[218] Sanders has described himself as a democratic socialist[219][220] and has praised Scandinavian-style social democracy.[221][222] Anti-capitalism, anarchism and the anti-globalisation movement rose to prominence through events such as protests against the World Trade Organization Ministerial Conference of 1999 in Seattle. Socialist-inspired groups played an important role in these movements, which nevertheless embraced much broader layers of the population and were championed by figures such as Noam Chomsky. In Canada, the Co-operative Commonwealth Federation (CCF), the precursor to the social democratic New Democratic Party (NDP), had significant success in provincial politics. In 1944, the Saskatchewan CCF formed the first socialist government in North America. At the federal level, the NDP is currently the Official Opposition, after winning 103 out of 308 seats (up from 37) in the 2011 Canadian federal election.[223] South American and Caribbean For the Encyclopedia Britannica "the attempt by Salvador Allende to unite Marxists and other reformers in a socialist reconstruction of Chile is most representative of the direction that Latin American socialists have taken since the late 20th century. ... Several socialist (or socialist-leaning) leaders have followed Allende’s example in winning election to office in Latin American countries."[224] Venezuelan President Hugo Chávez, Nicaraguan President Daniel Ortega, Bolivian President Evo Morales, and Ecuadorian president Rafael Correa refer to their political programmes as socialist. Chávez has adopted the term socialism of the 21st century. After winning re-election in December 2006, Chávez said, "Now more than ever, I am obliged to move Venezuela's path towards socialism."[225] Hugo Chávez was also reelected in October 2012 for his third six-year term as President, but he died in March 2013 from cancer. After Chávez's death on 5 March 2013, vice-president from Chavez's party Nicolás Maduro assumed the powers and responsibilities of the President. A special election was held on 14 April of the same year to elect a new President, which Maduro won by a tight margin as the candidate of the United Socialist Party of Venezuela; he was formally inaugurated on 19 April.[226] "Pink tide" is a term being used in contemporary 21st-century political analysis in the media and elsewhere to describe the perception that Leftist ideology in general, and Left-wing politics in particular, are increasingly influential in Latin America.[227][228][229] Presidents Fernando Lugo of Paraguay, Evo Morales of Bolívia, Luiz Inácio Lula da Silva of Brasil, Rafael Correa of Ecuador, and Hugo Chávez of Venezuela, in Fórum Social Mundial for Latin America Foro de São Paulo is a conference of leftist political parties and other organizations from Latin America and the Caribbean. It was launched by the Workers' Party (Portuguese: Partido dos Trabalhadores - PT) of Brazil in 1990 in the city of São Paulo. The Forum of São Paulo was constituted in 1990 when the Brazilian Workers' Party approached other parties and social movements of Latin America and the Caribbean with the objective of debating the new international scenario after the fall of the Berlin Wall and the consequences of the implementation of what were taken as neoliberal policies adopted at the time by contemporary right-leaning governments in the region, the stated main objective of the conference being to argue for alternatives to neoliberalism.[230] Among its member include current socialist and social-democratic parties currently in government in the region such as Bolivia´s Movement for socialism, Brazil´s Workers Party, the Communist Party of Cuba, the Ecuadorian PAIS Alliance, the Venezuelan United Socialist Party of Venezuela, the Socialist Party of Chile, the Uruguayan Broad Front, the Nicaraguan Sandinista National Liberation Front and the salvadorean Farabundo Martí National Liberation Front. International The Progressive Alliance is a political international founded on 22 May 2013 by political parties, the majority of whom are current or former members of the Socialist International. The organisation states the aim of becoming the global network of "the progressive", democratic, social-democratic, socialist and labour movement".[231][232] Philosophy Early socialist thought took influences from a diverse range of philosophies such as civic republicanism, Enlightenment rationalism, romanticism, forms of materialism, Christianity (both Catholic and Protestant), natural law and natural rights theory, utilitarianism and liberal political economy.[233] The philosophical basis for a lot of early socialism was heavily influenced by the emergence of positivism during the European Enlightenment. Positivism held that both the natural and social worlds could be understood through scientific knowledge and be analyzed using scientific methods. This core outlook influenced early social scientists and different types of socialists ranging from anarchists like Peter Kropotkin to technocrats like Saint Simon.[234] The fundamental objective of socialism is to attain an advanced level of material production and therefore greater productivity, efficiency and rationality as compared to capitalism and all previous systems, under the view that an expansion of human productive capability is the basis for the extension of freedom and equality in society.[235] Many forms of socialist theory hold that human behaviour is largely shaped by the social environment. In particular, socialism holds that social mores, values, cultural traits and economic practices are social creations and not the result of an immutable natural law.[236][237] The object of their critique is thus not human avarice or human consciousness, but the material conditions and man-made social systems (i.e.: the economic structure of society) that gives rise to observed social problems and inefficiencies. In the 20th century socialist economists were heavily influenced by neoclassical economics and its precepts in analytic philosophy. Notable socialists often combined neoclassical economics with Marxian analysis and historical materialism. Bertrand Russell, often considered to be the father of analytic philosophy, identified as a socialist. Bertrand Russell opposed the class struggle aspects of Marxism, viewing socialism solely as an adjustment of economic relations to accommodate modern machine production to benefit all of humanity through the progressive reduction of necessary work time.[238] Freedom and creativity Socialists tend to argue that "capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of the relative few who emerge victorious from free-market competition—people who then use their wealth and power to reinforce their dominance in society. Because such people are rich, they may choose where and how to live, and their choices in turn limit the options of the poor."[59] From the socialist perspective, freedom is conceived of as a concrete situation as opposed to a purely abstract or moral concept, and is closely related to human creativity and the importance socialists ascribe to creative freedom. Socialists view creativity as an essential aspect of human nature, and define freedom as a state of being where individuals are able to express their creativity unhindered by constraints of both material scarcity and coercive social institutions.[239] Marxists stress the importance of freeing the individual from coercive, exploitative and alienating social relationships they are compelled to partake in merely to survive, as well as the importance of economic development as providing the material basis for the existence of a state of society where there are enough resources to allow for each individual to pursue his or her genuine creative interests. In Marxist terminology, this is the goal of transcending alienation through material abundance.[240] The socialist concept of individuality is thus intertwined with the concept of individual creative expression. Karl Marx believed that expansion of the productive forces and technology was the basis for the expansion of human freedom, and that socialism, being a system that is consistent with modern developments in technology, would enable the flourishing of "free individualities" through the progressive reduction of necessary labour time. The reduction of necessary labour time to a minimum would grant individuals the opportunity to pursue the development of their true individuality and creativity.[241] Perspectives on equality In general, models of socialism often include some form of co-operative management of economic affairs based on equal power relationships, and socialists generally oppose hierarchies of a non-technical nature. Karl Marx eschewed theorizing on moral concepts. Instead of advocating principles of justice or equality, Marx's case for socialism was grounded in economic and materialist logic and his analysis of the development of the productive forces.[242] Although Karl Marx is sometimes mistaken as an egalitarian, Marx opposed idealism and the concept of "equality". Marx did, however, have a theory of the evolution of moral principles in relation to specific economic systems.[243] In Marxist theory, upper-stage communism is based on a principle whereby access to goods and services is based on need, stressing equal access to the articles of consumption. The "equality" in a communist society is not about equality of outcome, but about equal access to the articles of consumption so that individuals are free from dependency on other individuals or groups, and are thus able to overcome alienation.[244] The American socialist economist John Roemer has put forth a new perspective of equality and its relationship to socialism. Roemer attempts to reformulate Marxist analysis to accommodate normative principles of distributive justice, shifting the argument for socialism away from purely technical and materialist reasons to one of distributive justice. Roemer argues that, according to the principle of distributive justice, the traditional definition of socialism based on the principle that individual compensation be proportional to the value of the labour one expands in production is inadequate. Roemer concludes that egalitarians must therefore go beyond socialism as it is classically defined.[245] Critique of capitalism Further information: Socialist critique of capitalism Socialists do not base their critique of capitalism on the denunciation of greed, vilification of human nature or capitalists, or on human avarice[246] but on the structural causes of social and economic problems that emerge from the normal functioning of the capitalist system. Socialists generally argue that capitalism concentrates power and wealth within a small segment of society that controls the means of production and derives its wealth through economic exploitation. This creates unequal social relations which fail to provide opportunities for every individual to maximise their potential,[247] and after a certain stage of development, fails to utilise available technology and resources to their maximum potential due to restrictive property relations.[248] Economics See also: Socialist economics and Production for use Socialist economics starts from the premise that "individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members."[59] The original conception of socialism was an economic system whereby production was organised in a way to directly produce goods and services for their utility (or use-value in classical and Marxian economics): the direct allocation of resources in terms of physical units as opposed to financial calculation and the economic laws of capitalism (see: Law of value), often entailing the end of capitalistic economic categories such as rent, interest, profit and money.[249] In a fully developed socialist economy, production and balancing factor inputs with outputs becomes a technical process to be undertaken by engineers.[250] Market socialism refers to an array of different economic theories and systems that utilise the market mechanism to organise production and to allocate factor inputs among socially owned enterprises, with the economic surplus (profits) accruing to society in a social dividend as opposed to private capital owners.[251] Variations of market socialism include Libertarian proposals such as mutualism, based on classical economics, and neoclassical economic models such as the Lange Model. The ownership of the means of production can be based on direct ownership by the users of the productive property through worker cooperative; or commonly owned by all of society with management and control delegated to those who operate/use the means of production; or public ownership by a state apparatus. Public ownership may refer to the creation of state-owned enterprises, nationalisation, municipalisation or autonomous collective institutions. The fundamental feature of a socialist economy is that publicly owned, worker-run institutions produce goods and services in at least the commanding heights of the economy.[252] Management and control over the activities of enterprises are based on self-management and self-governance, with equal power-relations in the workplace to maximise occupational autonomy. A socialist form of organisation would eliminate controlling hierarchies so that only a hierarchy based on technical knowledge in the workplace remains. Every member would have decision-making power in the firm and would be able to participate in establishing its overall policy objectives. The policies/goals would be carried out by the technical specialists that form the coordinating hierarchy of the firm, who would establish plans or directives for the work community to accomplish these goals.[253] The role and use of money in a hypothetical socialist economy is a contested issue. Socialists including Karl Marx, Robert Owen, Pierre-Joseph Proudhon and John Stuart Mill advocated various forms of labour vouchers or labour-credits, which like money would be used to acquire articles of consumption, but unlike money, they are unable to become capital and would not be used to allocate resources within the production process. Bolshevik revolutionary Leon Trotsky argued that money could not be arbitrarily abolished following a socialist revolution. Money had to exhaust its "historic mission", meaning it would have to be used until its function became redundant, eventually being transformed into bookkeeping receipts for statisticians, and only in the more distant future would money not be required for even that role.[254] The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil... I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society. — Albert Einstein, Why Socialism?, 1949[255] Planned economy Main article: Planned economy A planned economy is a type of economy consisting of a mixture of public ownership of the means of production and the coordination of production and distribution through economic planning. There are two major types of planning: decentralised-planning and centralised-planning. Enrico Barone provided a comprehensive theoretical framework for a planned socialist economy. In his model, assuming perfect computation techniques, simultaneous equations relating inputs and outputs to ratios of equivalence would provide appropriate valuations in order to balance supply and demand.[256] The most prominent example of a planned economy was the economic system of the Soviet Union, and as such, the centralised-planned economic model is usually associated with the Communist states of the 20th century, where it was combined with a single-party political system. In a centrally planned economy, decisions regarding the quantity of goods and services to be produced are planned in advance by a planning agency. (See also: Analysis of Soviet-type economic planning). The economic systems of the Soviet Union and the Eastern Bloc are further classified as command economies, which are defined as systems where economic coordination is undertaken by commands, directives and production targets.[257] Studies by economists of various political persuasions on the actual functioning of the Soviet economy indicate that it was not actually a planned economy. Instead of conscious planning, the Soviet economy was based on a process whereby the plan was modified by localized agents and the original plans went largely unfulfilled. Planning agencies, ministries and enterprises all adapted and bargained with each other during the formulation of the plan as opposed to following a plan passed down from a higher authority, leading some economists to suggest that planning did not actually take place within the Soviet economy and that a better description would be an "administered" or "managed" economy.[258] Although central planning was largely supported by Marxist Leninists, some factions within the Soviet Union before the rise of Stalinism held positions contrary to central planning. Leon Trotsky rejected central planning in favour of decentralised planning. He argued that central planners, regardless of their intellectual capacity, would be unable to coordinate effectively all economic activity within an economy because they operated without the input and tacit knowledge embodied by the participation of the millions of people who in the economy. As a result, central planners would be unable to respond to local economic conditions.[259] Self-managed economy See also: Decentralized planning, Economic democracy and Workers' self-management A self-managed, decentralised economy is based on autonomous self-regulating economic units and a decentralised mechanism of resource allocation and decision-making. This model has found support in notable classical and neoclassical economists including Alfred Marshall, John Stuart Mill and Jaroslav Vanek. There are numerous variations of self-management, including labour-managed firms and worker-managed firms. The goals of self-management are to eliminate exploitation and reduce alienation.[260] Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related guilds "in an implied contractual relationship with the public".[261] It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century.[261] It was strongly associated with G. D. H. Cole and influenced by the ideas of William Morris. One such system is the cooperative economy, a largely free market economy in which workers manage the firms and democratically determine remuneration levels and labour divisions. Productive resources would be legally owned by the cooperative and rented to the workers, who would enjoy usufruct rights.[262] Another form of decentralised planning is the use of cybernetics, or the use of computers to manage the allocation of economic inputs. The socialist-run government of Salvador Allende in Chile experimented with Project Cybersyn, a real-time information bridge between the government, state enterprises and consumers.[263] Another, more recent, variant is participatory economics, wherein the economy is planned by decentralised councils of workers and consumers. Workers would be remunerated solely according to effort and sacrifice, so that those engaged in dangerous, uncomfortable, and strenuous work would receive the highest incomes and could thereby work less.[264] A contemporary model for a self-managed, non-market socialism is Pat Devine's model of negotiated coordination. Negotiated coordination is based upon social ownership by those affected by the use of the assets involved, with decisions made by those at the most localised level of production.[265] Michel Bauwens identifies the emergence of the open software movement and peer-to-peer production as a new, alternative mode of production to the capitalist economy and centrally planned economy that is based on collaborative self-management, common ownership of resources, and the production of use-values through the free cooperation of producers who have access to distributed capital.[266] Anarchist communism is a theory of anarchism which advocates the abolition of the state, private property, and capitalism in favour of common ownership of the means of production.[267][268] Anarcho-syndicalism as practiced in Catalonia and other places in the Spanish Revolution during the Spanish Civil War. Sam Dolgoff estimated that about eight million people participated directly or at least indirectly in the Spanish Revolution,.[269] The economy of the former Socialist Federal Republic of Yugoslavia established a system based on market-based allocation, social ownership of the means of production and self-management within firms. This system substituted Yugoslavia's Soviet-type central planning with a decentralised, self-managed system after reforms in 1953.[270] The Marxian economist Richard D. Wolff argues that "reorganizing production so that workers become collectively self-directed at their work-sites" not only moves society beyond both capitalism and state socialism of the last century, but would also mark another milestone in human history, similar to earlier transitions out of slavery and feudalism.[271] As an example, Wolff claims that Mondragon is "a stunningly successful alternative to the capitalist organisation of production."[272] State-directed economy See also: State socialism State socialism can be used to classify any variety of socialist philosophies that advocates the ownership of the means of production by the state apparatus, either as a transitional stage between capitalism and socialism, or as an end-goal in itself. Typically it refers to a form of technocratic management, whereby technical specialists administer or manage economic enterprises on behalf of society (and the public interest) instead of workers' councils or workplace democracy. A state-directed economy may refer to a type of mixed economy consisting of public ownership over large industries, as promoted by various Social democratic political parties during the 20th century. This ideology influenced the policies of the British Labour Party during Clement Attlee's administration. In the biography of the 1945 UK Labour Party Prime Minister Clement Attlee, Francis Beckett states: "the government... wanted what would become known as a mixed economy".[273] Nationalisation in the UK was achieved through compulsory purchase of the industry (i.e. with compensation). British Aerospace was a combination of major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders was a combination of the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, and Yarrow Shipbuilders; the nationalisation of the coal mines in 1947 created a coal board charged with running the coal industry commercially so as to be able to meet the interest payable on the bonds which the former mine owners' shares had been converted into.[274][275] Market socialism Main article: Market socialism Market socialism consists of publicly owned or cooperatively owned enterprises operating in a market economy. It is a system that utilises the market and monetary prices for the allocation and accounting of the means of production, thereby retaining the process of capital accumulation. The profit generated would be used to directly remunerate employees or finance public institutions.[276] In state-oriented forms of market socialism, in which state enterprises attempt to maximise profit, the profits can be used to fund government programs and services through a social dividend, eliminating or greatly diminishing the need for various forms of taxation that exist in capitalist systems. The neoclassical economist Léon Walras believed that a socialist economy based on state ownership of land and natural resources would provide a means of public finance to make income taxes unnecessary.[277] Yugoslavia implemented a market socialist economy based on cooperatives and worker self-management. Proudhon and his children, by Gustave Courbet, 1865. Pierre Joseph Proudhon, main theorist of mutualism and influential French socialist thinker. Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labour in the free market.[278] Integral to the scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.[279] Mutualism is based on a labour theory of value that holds that when labour or its product is sold, in exchange, it ought to receive goods or services embodying "the amount of labour necessary to produce an article of exactly similar and equal utility".[280] The current economic system in China is formally referred to as a Socialist market economy with Chinese characteristics. It combines a large state sector that comprises the 'commanding heights' of the economy, which are guaranteed their public ownership status by law,[281] with a private sector mainly engaged in commodity production and light industry responsible from anywhere between 33%[282] (People's Daily Online 2005) to over 70% of GDP generated in 2005.[283] Although there has been a rapid expansion of private-sector activity since the 1980s, privatisation of state assets was virtually halted and were partially reversed in 2005.[284] The current Chinese economy consists of 150 corporatised state-owned enterprises that report directly to China's central government.[285] By 2008, these state-owned corporations had become increasingly dynamic and generated large increases in revenue for the state,[286][287] resulting in a state-sector led recovery during the 2009 financial crises while accounting for most of China's economic growth.[288] However, the Chinese economic model is widely cited as a contemporary form of state capitalism, the major difference between Western capitalism and the Chinese model being the degree of state-ownership of shares in publicly listed corporations. The Socialist Republic of Vietnam has adopted a similar model after the Doi Moi economic renovation, but slightly differs from the Chinese model in that the Vietnamese government retains firm control over the state sector and strategic industries, but allows for private-sector activity in commodity production.[289] Social and political theory In this context, socialism has been used to refer to a political movement, a political philosophy and a hypothetical form of society these movements aim to achieve. As a result, in a political context socialism has come to refer to the strategy (for achieving a socialist society) or policies promoted by socialist organisations and socialist political parties; all of which have no connection to socialism as a socioeconomic system. Marxism Main articles: Marxism and Socialism (Marxism) At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure. – Karl Marx, Critique of the Gotha Program[290] The writings of Karl Marx provided the basis for the development of Marxist political theory and Marxian economics. Karl Marx and Friedrich Engels argued that socialism would emerge from historical necessity as capitalism rendered itself obsolete and unsustainable from increasing internal contradictions emerging from the development of the productive forces and technology. It was these advances in the productive forces combined with the old social relations of production of capitalism that would generate contradictions, leading to working-class consciousness.[291] Marx and Engels held the view that the consciousness of those who earn a wage or salary (the working class in the broadest Marxist sense) would be moulded by their conditions of wage slavery, leading to a tendency to seek their freedom or emancipation by overthrowing ownership of the means of production by capitalists, and consequently, overthrowing the state that upheld this economic order. For Marx and Engels, conditions determine consciousness and ending the role of the capitalist class leads eventually to a classless society in which the state would wither away. The Marxist conception of socialism is that of a specific historical phase that will displace capitalism and precede communism. The major characteristics of socialism (particularly as conceived by Marx and Engels after the Paris Commune of 1871) are that the proletariat will control the means of production through a workers' state erected by the workers in their interests. Economic activity would still be organised through the use of incentive systems and social classes would still exist, but to a lesser and diminishing extent than under capitalism. For orthodox Marxists, socialism is the lower stage of communism based on the principle of "from each according to his ability, to each according to his contribution" while upper stage communism is based on the principle of "from each according to his ability, to each according to his need"; the upper stage becoming possible only after the socialist stage further develops economic efficiency and the automation of production has led to a superabundance of goods and services.[292][293] Marx argued that the material productive forces (in industry and commerce) brought into existence by capitalism predicated a cooperative society since production had become a mass social, collective activity of the working class to create commodities but with private ownership (the relations of production or property relations). This conflict between collective effort in large factories and private ownership would bring about a conscious desire in the working class to establish collective ownership commensurate with the collective efforts their daily experience.[290] Che Guevara and Mao Zedong sought socialism based on the rural peasantry rather than the urban working class. Che Guevara attempted to inspire the peasants of Bolivia by his own example into a change of consciousness. Guevara said in 1965: Socialism cannot exist without a change in consciousness resulting in a new fraternal attitude toward humanity, both at an individual level, within the societies where socialism is being built or has been built, and on a world scale, with regard to all peoples suffering from imperialist oppression.[294] Evolutionary and Institutional economics Thorstein Veblen, a leading American institutionalist and evolutionary economist, argued that a subset of the working-class, the technical specialists and engineers, would become the driving force behind socioeconomic change within capitalism. There is an antagonism between industry and business, where industry refers to the process of producing goods and services and business is defined as the process of "making money". Thorstein Veblen saw socialism as an immediate stage in an ongoing evolutionary process in economics that would result from the natural decay of the system of business enterprise. In contrast to Marx, he did not believe socialism would be the result of political struggle or political revolution by the working class as a whole and did not believe it to be the ultimate goal of humanity.[295] But like Marx, Veblen saw technology as the underlying force driving social change. Joseph Schumpeter viewed intellectuals and the intelligentsia as the group within society that would gradually move society toward socialism. Socialism would be partially a result of socio-economic evolution, the growth of workers' self-management, industrial democracy and social planning, and partially from political pressure on the part of intellectuals in Western society.[296] |
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