Marx and Engels explain the source of profit as being due to the workers producing more value than is required to pay their wages. This is called surplus value, and the part of surplus value that is realized, that is actually sold, and which is that greater than investment, depreciation, taxes, and any losses, is profit. This account seems correct, and much better than a factor account suggested by other contributors, which Marx expressly criticises. But it is not the contradictory idea that somehow the worker’s wages don’t get paid to the worker. This confusion may come from the idea, (shared by many Marxists, by the way,) that what the capitalist appropriates, which would include profit if any, is something that the worker is entitled to in virtue of having produced. This is called the Labour Theory of Property, and is held by John Locke among other people, and not by Marx. Marx has a labour theory of value, which, unlike the labour theory of property, Is a purely explanatory notion and not a normative notion about who is entitled to what. But if you think the worker is somehow entitled to the things they make in terms of having produced then, you might confusedly think that the worker is not being paid all of their wages, as opposed to not being paid the entire amount of value that they produce. Marx maintains the latter claim without further claiming that the worker is entitled to the entire amount of value.
Historically, the productive capacity of capitalism has proven beyond any shadow of doubt that its mode of production - capital versus labour - provided a historic benchmark on how to produce an abundance of goods in the form of commodity production. Nonetheless, due to the inherent contradictions of commodity production, of which the primary driver is the maximisation of profits, under a market economy of buying and selling this abundance is interdependent on the profitability of the actual distribution of said commodities.
If the distribution of the end product is deemed to be non-profitable, due to a lack of sufficient buyers at the point of sale, production of that commodity will not take place, or if production has taken place the commodity is destroyed or allowed to rot in situ. Thus, despite being the historical benchmark of productive capacity capitalism is physically and economically incapable of being the historic benchmark for distribution.
Which in practice means peoples needs go unsatisfied and human suffering prevails to such an extent that it’s been estimated that every week 16,000 people die due to lack of access to clean water simply because it's unaffordable. Some 795 million people in the world do not have enough food to lead a healthy active life. That's about one in nine people on earth.
Poor nutrition causes nearly half (45%) of deaths in children under five - 3.1 million children each year. One out of six children -- roughly 100 million -- in developing countries is underweight. One in four of the world's children is stunted. In developing countries, the proportion can rise to one in three. When the loss of human potential is considered in conjunction with these horrendous figures on global casualties it becomes obvious the problem of distribution within capitalism has a much wider impact than originally thought.
On top of this, we also have to consider the casualties of war which is in the 100’s of millions but excludes the numbers killed fleeing from war zones. For all modern wars are caused by the rivalry induced by capitalism. Wars are caused by the essentially competitive nature of capitalism. Where nations compete over:
(i) mineral resources;
(ii) trade routes;
(iii) areas of domination.
(ii) trade routes;
(iii) areas of domination.
On the other hand, theoretically, socialism has many strengths for improving the human condition. For instance, its form of democracy - Direct Participatory Democracy - suggests a solution to the problem of distribution would be through calculating global supply and demand by adapting the current system used by the major supermarkets to calculation in kind, rather than to profit maximisation. With a complete transformation in the calculation of global resources, and their production and distribution, the true meaning of economy will come into its own.
Exchange value is a calculation based on the inputs and outputs of commodities through the buying and selling of different products in a global market. This trade in commodities generates waste; pollution and externalizations; overproduction and underproduction; built-in obsolescence; quantity over quality; crisis and booms; poverty amidst plenty; employment for some and a waste in human potential for most; and obscene wealth for the few.
With no commodity production, there will be no value to calculate just the inputs and outputs of human needs. This is not to infer a form of rationing. Suffice to say the decision-making process will ensure there’s sufficient stock control to meet projected needs through calculation in kind
This decision making process will also configure: environmental impact assessments; a high standard of quality control and durability; positive recycling - where products will be deliberately designed so to ensure that they last longer - and when they are passed their usefulness all their component parts are easily recycled into other useful products; and transportation miles for distribution of human needs so the shortest journey possible is covered. This efficiency of calculation will ensure the energy required for producing needs will be kept to a minimum and promote the production of renewable energy sources.
It goes without saying there won’t be booms and slumps in socialism due to the overproduction of certain products. In fact, if overproduction did occur its unlikely to represent a large enough challenge where the standard of living and the quality of life is going to be affected to a great extent, other than lead to an increase in leisure activity.
Because socialism has never been put into practice we don’t know where it fails. Basically, socialism is a system of society where the means of production and distribution (the means of living) are commonly owned by the global community as a whole on the basis of production for use and free access for all. In short the complete opposite of the present social relationship between capital and labour.
There are many reasons why some people think this sucks, or impossible. Mainly because they have been fed a lie and a myth brought on by their own ignorance of the definition and description given above. Socialism is not about state control, the demise of the individual, the lack of incentives, no competition, commodities, rationing, dictators and all of the other fears which have been dragged up in the defence of capitalism.
This capitalist defence consists of associating socialism with: the USSR and other state capitalist systems; totalitarianism; rule by a party elite; attempting to make a distinction between communism and socialism; a violent revolution led by a vanguard; proposing it won't work because of human nature.
We could go on but suffice to say that capitalist apologists are on the defence and not the offence because with socialism never been tried the best they can do is compare and contrast a false imagery of socialism.
Is socialism impossible? Well, ideas are not born out of thin air. And the concept of socialism is no exception for it like all previous and future ideas originate from the environmental circumstances we find ourselves in.
The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness.
So if its our social being which determines our consciousness how do these very ideas grow and disseminate through the human mindset? In fact what motivates them to come into existence?
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. From forms of development of the productive forces these relations turn into their fetters. 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.
Finally, once the forces of social evolution are apparent what then?
“One man with an idea in his head is in danger of being considered a madman; two men with the same idea in common may be foolish, but the can hardly be mad; ten men sharing an idea begin to act, a hundred draw attention as fanatics, a thousand and society begins to tremble, a hundred thousand and there is war abroad, and why only a hundred thousand? Why not a hundred million and peace upon the earth? You and I who agree together, it is we who have to answer that question.”
William Morris
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