For socialism to be established, there are two fundamental preconditions that must be met.Firstly, the productive potential of society must have been developed to the point where, generally speaking, we can produce enough for all. This is not now a problem as we have long since reached this point. However, this does require that we appreciate what is meant by "enough" and that we do not project on to socialism the insatiable consumerism of capitalism. Secondly, the establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook. It is simply not reasonable to suppose that the desire for socialism on such a large scale, and the conscious understanding of what it entails on the part of all concerned, would not influence the way people behaved in socialism and towards each other. Would they want to jeopardise the new society they had helped create? Of course not.
Humans behave differently depending upon the conditions that they live in. Human behaviour reflects society. In a society such as capitalism, people's needs are not met and reasonable people feel insecure. People tend to acquire and hoard goods because possession provides some security. People have a tendency to distrust others because the world is organized in such a dog-eat-dog manner. If people didn't work society would obviously fall apart. To establish socialism the vast majority must consciously decide that they want socialism and that they are prepared to work in socialist society. If people want too much? In a socialist society "too much" can only mean "more than is sustainably produced."
If people decide that they (individually and as a society) need to over-consume then socialism cannot possibly work. Under capitalism, there is a very large industry devoted to creating needs. Capitalism requires consumption, whether it improves our lives or not, and drives us to consume up to, and past, our ability to pay for that consumption. In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms, for example, need to persuade customers to buy their products or they go out of business. They would not otherwise spend the vast amounts they do spend on advertising. There is also in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions. As Marx contended, the prevailing ideas of society are those of its ruling class then we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted. It is this which helps to underpin the myth of infinite demand. It does not matter how modest one's real needs may be or how easily they may be met; capitalism's "consumer culture" leads one to want more than one may materially need since what the individual desires is to enhance his or her status within this hierarchal culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation. What this amounts to is a kind of institutionalised envy and that will be unsustainable as more peoples are drawn into alienated capitalism.
In socialism, status based upon the material wealth at one's command, would be a meaningless concept. The notion of status based upon the conspicuous consumption of wealth would be devoid of meaning because individuals would stand in equal relation to the means of production and have free access to the resultant goods and services. Why take more than you need when you can freely take what you need? In socialism the only way in which individuals can command the esteem of others is through their contribution to society, and the stronger the movement for socialism grows the more will it subvert the prevailing capitalist ethos, in general, and its anachronistic notion of status, in particular.
The main features of Socialism are really quite simple:
Firstly, the new social system must be world-wide. The world must be regarded as one country and humanity as one people.
Secondly, all the people will co-operate to produce and distribute all the goods and services which are needed by mankind, each person willingly and freely, taking part in the way he feels he can do best.
Thirdly, all goods and services will be produced for use only, and having been produced , will be distributed , free , directly to the people so that each person’s needs are fully satisfied .
Fourthly, the land, factories, machines, mines, roads, railways, ships, and all those things which mankind needs to carry on producing the means of life, will belong to the whole people .
Socialism would inherit from capitalism a complex worldwide productive network linking all the millions of individual productive units in the world (farms, mines, factories and so on ) into a single system. The links we are talking about are physical in the sense that one unit is linked to another either as the physical user of the others product or as the physical supplier of its materials, energy or equipment. Under capitalism such links are established in two ways: organisationally (as between different productive units forming part of the same private or state enterprise) and, above all, commercially (as when one enterprise contracts to buy something from, or to sell something to, another enterprise). In socialism the links would be exclusively organisational. We should be very wary of rejecting the structures or lines of communication left by capitalism. Sure, the internal structures of many organisations reflect their origin, but the decision-making processes inherited should surely be our first concern. Rather than re-inventing the wheel or developing new decision-making structures separate to and different from those of capitalism, we should by default use the existing systems, unless an alternative is clearly better. We should view capitalism's decision-making structures as a social tool developed by humans and currently used to smooth the operation of capitalism. But in the hands of a socialist majority, a switch will be flicked in this machine, and - with some tweaking here and there - it will be available to help enable socialism.
Stock or inventory control systems employing calculation in kind are absolutely indispensable to any kind of modern production system. While it is true that today they operate within a price environment that is not the same thing as saying they need such an environment in order to operate. Most students of Logistics will be able to explain how unnecessary dollars and cents are for its operation. The key to good stock management is the stock turnover rate – how rapidly stock is removed from the shelves – and the point at which it may need to be re-ordered. This will also be affected by considerations such as lead times – how long it takes for fresh stock to arrive – and the need to anticipate possible changes in demand. The Just-In-Time systems are another tried and trusted tool of warehousing and supply chains which can be utilised. The existence of buffer stocks provides for a period of re-adjustment.
The “Law of The Minimum” formulated by Justus von Liebig can be applied equally to the problem of resource allocation in any economy. For any given bundle of factors required to produce a given good, one of these will be the limiting factor. That is to say, the output of this good will be restricted by the availability of the factor in question constituting the limiting factor. All things being equal, it makes sense from an economic point of view to economise most on those things that are scarcest and to make greatest use of those things that are abundant. The claim that all factors are scarce because the use of any factor entails an opportunity cost and, consequently, need to be economised is not a very sensible approach to adopt. Effective economisation of resources requires discrimination and selection; you cannot treat every factor equally – that is, as equally scarce – or, if you do, this will result in gross misallocation of resources and economic inefficiency.
In any economy there needs to be some way of prioritising production goals. We can apply Maslow’s “hierarchy of needs” as a guide to action. It would seem reasonable to suppose that needs that were most pressing and upon which the satisfaction of other needs are dependent would take priority over those other needs. We are talking here about our basic physiological needs for food, water, adequate sanitation and housing and so on. This would be reflected in the allocation of resources: high priority end goals would take precedence over low priority end goals where resources common to both are revealed (via the self-regulating system of stock control) to be in short supply.
Cost-benefit analysis might be used with which to evaluate a range of different projects facing such a society using some sort of “points system”. Under capitalism the balance sheet of the relevant benefits and costs advantages and disadvantages of a particular scheme or rival schemes is drawn up in money terms, but in socialism a points system for attributing relative importance to the various relevant considerations could be used instead. The points attributed to these considerations would be subjective, in the sense that this would depend on a deliberate social decision rather than on some objective standard. In the sense that one of the aims of socialism is precisely to rescue humankind from the capitalist fixation with production time/money, cost-benefit type analyses, as a means of taking into account other factors, could therefore be said to be more appropriate for use in socialism than under capitalism. Using points systems to attribute relative importance in this way would not be to recreate some universal unit of evaluation and calculation, but simply to employ a technique to facilitate decision-making in particular concrete cases. The advantages /disadvantages and even the points attributed to them can, and normally would, differ from case to case. So what we are talking about is not a new abstract universal unit of measurement to replace money and economic value but one technique among others for reaching rational decisions in a society where the criterion of rationality is human welfare.
A broad picture of how Production-For-Use would operate in direct response to need can now be projected.
Needs would arise in local communities expressed as required quantities such as kilos, tonnes, cubic litres or whatever of various materials and quantities of goods. These would then be communicated according to necessity .Each particular part of production would be responding to the material requirements communicated to it through the connected ideas of social production. It would be self -regulating, because each element of production would be self-adjusting to the communication of these material requirements. Each part of production would know its position. If requirements are low in relation to a build-up of stock, then this would an automatic indication to a production unit that its production should be reduced. The supply of some needs will take place within the local community and in these cases production would not extent beyond this, as for example with local food production for local consumption. Other needs could be communicated as required things to the regional organisation of production. Local food production would require glass, but not every local community could have its own glass-works. The requirements for glass could be communicated to a regional glass-works. The glass-works has its own suppliers of materials and the amounts they require for the production of glass are known in definite quantities. The required quantities of these materials could be passed by the glass works to the regional suppliers of the materials for glass manufacture. This would be a sequence of communication of local needs to the regional organisation of production, and thus contained within a region.
Local food production would also require tractors, for instance, and here the communication of required quantities of things could extend further to the world organisation of production. Regional manufacture could produce and assemble the component parts of tractors for distribution to local communities. The regional production unit producing tractors would communicate to their own suppliers, and eventually this would extend to world production units extracting and processing the necessary materials.
This would be the self-regulating system of production for need, operating on the basis of the communication of need as definite quantities of things throughout the structure of production. Each production unit would convert the requirements communicated to it into its own material requirements and pass these on to its suppliers. This would be the sequence by which every element of labour required for the production of a final product would be known .This system of self-regulating production for use is achieved through communications. Socialism would make full use of the means communications which have developed such as the existing system of information technology that can provide for instant world-wide contact as well as facilities for storing and processing millions of pieces of information.