Socialist Economics

Socialist economics are the economic theories and practices of hypothetical and existing socialist economic systems.

A SOCIALIST ECONOMY IS BASED ON PUBLIC OWNERSHIP OR INDEPENDENT COOPERATIVE OWNERSHIP OF THE MEANS OF PRODUCTION, WHEREIN PRODUCTION IS CARRIED OUT TO DIRECTLY PRODUCE USE-VALUE, USUALLY, BUT NOT ALWAYS, COORDINATED THROUGH ECONOMIC PLANNING AND A SYSTEM OF ACCOUNTING BASED ON CALCULATION-IN-KIND OR LABOR-TIME. THE TERM SOCIALIST ECONOMICS MAY ALSO BE APPLIED TO ANALYSIS OF FORMER AND EXISTING ECONOMIC SYSTEMS THAT CALL THEMSELVES "SOCIALIST", SUCH AS THE WORKS OF HUNGARIAN ECONOMIST JÁNOS KORNAI.

Socialist economics have been associated with different schools of economic thought, most notably Marxian economics, Institutional economics and Evolutionary economics. Early socialism, like Ricardian socialism, was based on Classical economics, and some forms of market socialism are based on the Neoclassical school of economics.

A socialist economy is a system of production where goods and services are produced directly for use, in contrast to a capitalist economic system, where goods and services are produced to generate profit. Goods and services would be produced for their physical utility and use-value, eliminating the need for market-induced needs to ensure a sufficient amount of demand for products to be sold at a profit. Production in a socialist economy is therefore "planned" or "coordinated", and does not suffer from the business cycle inherent to capitalism. In most socialist theories, economic planning only applies to the factors of production and not to the allocation of goods and services produced for consumption, which would be distributed through a market. Karl Marx stated that "lower-stage communism" would consist of compensation based on the amount of labor one performs.

The ownership of the means of production varies in different socialist theories. It can either be based on public ownership by a state apparatus; 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.

Management and control over the activities of enterprises is based on self-management and self-governance, with equal power-relations in the workplace to maximize occupational autonomy. A socialist form of organization 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.

However, the economies of the former Socialist states, excluding SFR Yugoslavia, were based on bureaucratic, top-down administration of economic directives and micromanagement of the worker in the workplace inspired by capitalist models of scientific management. As a result, socialists have argued that they were not socialist due to the lack of equal power-relations in the workplace, the presence of a new "elite", and because of the commodity production that took place in these economies. These economic and social systems have been classified as being either Bureaucratic collectivist, Coordinatorist, State capitalist or Deformed workers' states, the exact nature of the USSR et al remains unresolved within the socialist movement.

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