SOCIALISM

Yuwanto, Ph.D.
OVERVIEW
Term socialism coined in 1827 by British socialist
Robert Owen (1771-1858) to describe his view of a
cooperative new society. He wellknown as a father
of the cooperative movement

His thesis is that the permanent cause of misery
was to be found in the competition of human labor
with machinery, and that the only effective remedy
was the united action of men, and the
subordination of machinery

Robert Owen (1771-1858)
Man is essentially good but is
corrupted by the evil institutions
of society
Especially concerned with the
welfare of children in the
industrial society.
People are formed by their
environment Created better
living conditions
Businesspeople are not enough
concerned with their employees
Provided better hours, wages,
benefits





Overview (Contd)
Modern socialism originated in the late 19th-
century intellectual and working class political
movement that criticized the effects of
industrialization and private ownership on society
Karl Marx posited that socialism would be
achieved via class struggle and a proletarian
revolution, and would represent a transitional
stage between the capitalist and communist
modes of production

Overview (Contd)
Liberal political parties in 19th century Europe
failed to address the desperate needs of
working people
oClassical liberalism views poverty as an individual
choice or failure, not the result of social structures
oSocialism provides a different conception of
individual responsibility & a different conception
of government
oIn England, socialism became a political movement
in 1884, with the creation of the new Labor Party;
and many Labor governments eversince
Overview (Contd)
Socialism refers to a broad set of economic theories
of social organization advocating collective or state
ownership and administration of the means of
production and distribution of goods
Because of the collective nature of socialism, it is to be
contrasted to the doctrine of the sanctity of private
property that characterizes capitalism. Where capitalism
stresses competition and profit, socialism calls for
cooperation and social service
Overview (Contd)
Socialism also refers to a society characterized by
equality for all individuals, with a fair or
egalitarian method of compensation
Socialists share the belief that capitalism unfairly
concentrates power and wealth among a small
segment of society that controls capital, creates an
unequal society, and does not provide equal
opportunities for everyone in society.
Therefore they advocate the creation of a society in
which wealth and power are distributed more evenly
based on the amount of work expended in production
(although there is considerable disagreement over
how, and to what extent this could be achieved)



Socialisms Principles
Egalitarianism (equality)
Humankind will be unified and cooperative
Wealth owned in common, used for the
common good
Moralism
Division of rich and poor is evil
Capitalism is fundamentally unjust
The ideal future = peace, social justice and true
liberty for all
Capitalism versus Socialism
Aspect Capitalism Socialism
Ideology Competition Cooperation
Priority Profit Protection (Equality)
Economy Unregulated Regulated
Property Private Property Government-controlled
21
st
Centurys Socialism
In some Latin American countries, socialism has re-
emerged in recent years, with an anti-imperialist
stance, the rejection of the policies of neo-
liberalism and the nationalisation or part
nationalisation of oil production, land and other
assets
Venezuelan Pres. Hugo Chvez & Bolivian Pres. Evo
Morales, for instance, refer to their political programs as
socialist. Chvez has coined the term 21st century
socialism. After winning re-election in December 2006,
President Chvez said, Now more than ever, I am
obliged to move Venezuela's path towards socialism

21
st
Centurys Socialism (Contd)
In the developing world, some elected socialist parties and
communist parties remain prominent, particularly in India
and Nepal. Also, PRC, Cuba, North Korea, Laos & Vietnam
are states remaining from the first wave of socialism in the
20
th
century
In China, the CCP has led a transition from the command
economy of the Mao period to an economic program
they term the socialist market economy or "socialism
with Chinese characteristics."
Under Deng, the leadership of China embarked upon a
program of market-based reform; however, maintained
state ownership rights over land, state or cooperative
ownership of much of the heavy industrial &
manufacturing sectors and state influence in the
banking & financial sectors
Socialism is different than Communism
Socialism
Transitory phase between capitalism and
communism
Some elements of Capitalism remain

Communism
Classless society in which all live by working
and not by owning
State is nonexistent
Wage system is abolished
MARXIST-SOCIALISM
Karl Marx (1818 1883)
He was a German economist
who was exiled to England

He wrote Das Kapital, which
explained how he thought
capitalism would fall, and also
the Communist Manifesto,
which told the workers of the
world to unite and fight the
factory owners

The Rise of Socialism and Marxism
Socialism and Marxism are part of the consequences of the
Industrial Revolution. Marxism was very much the product of
mainstream Western intellectual tradition, combining
classical German philosophy with an optimism toward the
benefits of science and technology brought about by the
Industrial Revolution

The radical aspects of Marxism, e.g. his championing of class
struggles and violent revolutions, were Marx's interpretation
of history and his prediction of what was to come based on
the often violent confrontations between workers and
management.
The Rise of Socialism and Marxism (Contd)
In the early stages of the Industrial Revolution, there
were many workers strikes aimed at the destruction
of machines, as workers viewed machines as the
root of their misery
Meanwhile, many workers also requested greater
political representation, which was often denied
them. Revolutions ensued in many parts of Europe,
often crushed with great bloodshed. This led Marx to
believe that socialist takeover required violence, and
workers and managements interests were
irreconcilable
The Rise of Socialism and Marxism (Contd)
Marx believed that he formulated the "iron laws" of
history which conformed to science. He spent dozens
of years working away at his multi-volume work "The
Capital", in which he tried to give a mathematical
explanation of how the management exploited the
workers
From Adam Smith, Marx borrowed the idea that
labor was the generator of wealth, and concluded
that industrial capitalists made their wealth by
exploiting industrial labor

The Rise of Socialism and Marxism (Contd)
Marxs Scientific Socialism had 5 major points:
Historical Materialism
Class Struggle
Surplus Value
Inevitability of Socialism
Classless Society
Explanation of Terms
Historical materialism
The belief that what motivated historical
developments were material things, especially
two: labor, and the means of production
The relationship people formed with one
another as a result of their relationship to the
machines led to social classes, the industrial
working class and the management class
Class struggle was inevitable and drove society
forward

Historical Materialism (Contd)
Finally the management class would be driven to
wars against one another because of competition for
markets, since capitalism is driven by the incessant
need for new markets, and then the international
industrial workers would unite, overthrow their
respective countries, and usher in communism that
recognized no national borders.

Explanation of terms (Contd)
Dialecticism
The belief that everything had two sides, initially
used by a German philosopher Friedrich Hegel.
Therefore the underdogs in one society, be they
the bourgeoisie in feudalism or industrial workers
in capitalism, will become the ruling class at a new
social stage. Although they are tough and even
bloody, it is the class struggles at each social stage
that pushes society forward
Explanation of Terms (Contd)
Class Struggle
According to Marx, society has always been divided into
the haves and the have nots and these two classes
have always fought each other.
Marx believed that the proletariat in every country faced
the same problem Class struggle with the bourgeoisie.
So he told the proletariat in every country,
You have nothing to lose but your chains
Workers of the World Unite!

Explanation of Terms (Contd)
Inevitability of Socialism
Marx argued that over time, capital (money) would
concentrate in the hands of a small number of capitalists.
Finally, the lower class would rise up, overthrow the
capitalists, and establish a Dictatorship of the Proletariat.
At first, the Dictatorship of the Proletariat would need
absolute powers to make sure Reactionaries didnt bring
back capitalism.
But before long, the workers would learn to share
everything equally from each according to his abilities,
to each according to his needs. Karl Marx called this
Communism, or the Ultimate Classless Society.



Explanation of terms (Contd)
Economic Determinism
The belief that social developments are ultimately
caused by economic factors, without exception.
Spiritual, cultural, and other explanations are
excluded here. C.f., cultural determinism. Marx
believed, for instance, that because they owned
the property of the factory, factory owners
forever belonged to a different realm from the
workers and they would do everything, including
using government, army, police, and prison to
safeguard their property and the unequal
relationship with the workers
Explanation of terms (Contd)
Marx's critique of the market economy
To Marx, market economy was bad because it
turned workers' labor into commodities. Workers
lost respect for their persons. The solution to it
was the eventual abolition of a market economy
and "each produces according to what he
can/each takes according to what he needs" in a
Communist society

Marx's critique of the market economy (Contd)

Surplus Value: Marx believed that the bourgeoisie
basically bought the products of the laborers at a
cheap price, and then sold those same products back
to them at a high price, in effect stealing the surplus
value as their profit
Explanation of terms (Contd)
Marx's belief in technological developments
Marx believed his vision for Communism above
was possible because of the infinite development
of science and technology which would infinitely
increase output. The industrial workers, who are
in the forefront of technology utilization,
therefore, to Marx, should assume leadership in a
socialist society
Transformation of Marxism
In response to the popularity of socialism, many
European governments developed measures to
absorb workers radicalism, e.g. by developing a
welfare state and popularizing universal male
suffrage. Thus in western and central Europe, the
emphasis on violence in Marxism was replaced by
"peaceful evolution." Violent communism was only
practiced in less industrialized and more autocratic
states, such as Russia.
Questions for discussion
1. One Marxist argument goes that it was in the capitalist
society that human labor became a piece of commodity,
which deprived people of the dignity of work. The conflict
between workers and management was inevitable because
of their different relationships to the machines. What was
Marxs solution to this problem?
2. Marx calls workers wages the minimum wage: enough only
to sustain the workers lives. And he believes that the
capitalists make money by selling goods at a market price
higher than this wage, and the difference between market
price and minimum wage is the profit for the capitalist. Is this
minimum wage the same as what we call minimum wage
today?