Under capitalism, the capitalists own the means of production. Workers are forced to sell their labor power and the capitalist exploits and oppresses them. In socialism, the main means of production are owned in common by the whole of society.
According to the Marxian theory of the law of value, the value of every commodity is determined by the amount of socially necessary labour required for its production (or reproduction). In the highest stage of commodity production, the one in which it becomes predominant, namely, capitalism, labor power itself becomes almost universally a commodity, a peculiar commodity, it is true, but one whose value is nevertheless determined like that of any other commodity. The worker sells his commodity, as he must, to the capitalist. But, exploiter though he is, the capitalist pays the worker the full value (more or less) of his labor power. He pays him in the form of another peculiar commodity, money, which is a universal equivalent and with which the worker in turn acquires those commodities he needs to live on (that is, to reproduce his labor power). He in turn pays the full value (more or less) for these commodities. For the value of his labour power, the worker receives an equivalent value in other commodities. The bourgeois principle of equality is perfectly maintained. Equal values have been exchanged. There has been no cheating, no stealing. Commodity exchange can operate on no other principle, above all under the conditions of capitalism, than that of the exchange of equivalents.
Yet the capitalist exploits the worker. In paying for labour power at its value, the capitalist has the use of labour power, namely, labour itself, for a longer time than is needed to reproduce the value of the labour power he has bought. That is, he disposes of its use during the time when it is necessary labour, and during the time when it is surplus labour, that is, while it produces a value above that of the labour power purchased. The secret of surplus value is laid bare. No cheating, equal values fairly exchanged – and that is exactly how the worker is exploited and surplus value appropriated by the capitalist.
Thus, the Marxian theory of value is nothing but the theory of surplus value. How can this profit be made by the capitalist? Only in one way. Only by compelling the worker to produce, in the course of the production process, more values than those he receives in the form of wages. The worker is compelled to produce surplus value for the capitalist; which is only another way of saying that he is compelled to do a certain proportion of unpaid labor for the capitalist. The capitalist relation is thus an exploitative relation. Which is why we had repeatedly to point out that if you preserve private profits, you are bound to preserve exploitation. The only way to abolish capitalist exploitation is to abolish capitalist private property. Capitalist private property is but the capitalist means to private profit. No profits; no production: that is the capitalist law. For, the whole purpose of the capitalist production process is – private profit, which is but another name for the self-expansion of capital. The capitalist throws into the productive process a certain quantity of capital as a means to expanding it. That is the whole point in the process – for the capitalist. If at the end of the process the capital thus thrown in has not expanded, i.e. increased in quantity, the whole process is, from his point of view, useless. Which is why we say that capitalist production is but a means to capitalist profit. Production, which is essential to society, is only incidental to the process; profit is its motive, and profit its purpose.
That is the sum and substance of Das Kapital.
Property will no longer belong to a small number of capitalists nor the state, which is the instrument of a class, but to the community. Socialism is a self-acting society of associated producers will also be class-free inasmuch as its members will have no differential relation to the means of production and distribution. That is the socialist society.. Nationalisation is the act of vesting in the state; socialization is the process of vesting in the community. You cannot vest in the community if classes exist; for, in that case, whatever you may term it in form, it will in fact be a vesting in the dominant class. You vest in the state precisely because classes exist; and statification is the method by which the working class takes into its hands the property of which it has expropriated the capitalists. This does not to bring in the class-free society. Without the abolition of private property, you cannot free the productive forces of society from the fetters of private profit which obstructs that further development of them which is essential to the building of socialism.
The Socialist Party holds that socialism is the only alternative to capitalism. When Marxists declare that socialism is the only alternative to capitalism, they thereby mean, firstly, that socialism is the next higher stage in society’s evolution; and, secondly, that it provides the only progressive solution of capitalism’s contradictions. Capitalism is not an eternal system which has existed from the beginning and will prevail to the end. On the contrary, it is only one system in an historical series (primitive communism – slave owning society – feudalism – capitalism.) Like all preceding social systems, however, capitalism too must die. It is dying because it is being choked by the working out of its inherent contradictions, the basic one of which is the contradiction between the associated labor process and the individual appropriation of the product. Socialism is thus the road forward from capitalism, the next higher stage of progressive social evolution. The world was ripening under capitalism itself for socialism.
Marx did not say or imply that if you somehow destroy capitalism socialism must dawn. That is a fatalist and mechanistic conception with which Marxism has nothing in common. What Marx did teach and demonstrate was that if you destroy capitalism in a certain way, that is, by a certain form of social action, the road to socialism would be opened. In what way? In the revolutionary way. If socialism is to be the outcome of capitalism’s downfall, it is necessary that mankind take conscious action in that direction. Marx showed that the successful carrying forward of the struggle of the working class to free itself from capitalist exploitation would open the road to socialism by demonstrating that the working class could not emancipate itself without also emancipating all society. In order to emancipate itself, the working class would have to expropriate the capitalists and socialize their property. the carrying forward of the class struggle to success connotes the overthrow of the capitalist state power and the expropriation of the capitalist class. You cannot keep the capitalist state power and expropriate the capitalist class. It cannot be used for the opposite purpose. It must be replaced.
Socialism is the only progressive alternative to capitalism and that the bringing of the socialist society into being demands the carrying forward of the revolutionary class struggle to its logical conclusion, i.e. the overthrow of the capitalist class and its state. Abandon the end, and you abandon the means.