Socialist Ownership

a historically determined form of social ownership that constitutes the economic foundation of socialism. Socialist ownership is a system of socioeconomic relations with respect to the collective appropriation by working people of material wealth, primarily the means of production, in the interest of society as a whole.

Social ownership arises through the abolition of capitalist private ownership in the course of a socialist revolution and through the establishment of a dictatorship of the proletariat and the socialization of the most important means of production, a step made inevitable by the entire course of capitalist development. According to V. I. Lenin, “The socialization of production cannot but lead to the means of production becoming the property of society” (Poln. sobr. soch., 5th ed., vol. 26, p. 73). This transfer of ownership is the decisive condition for the victory of the new social order because it opens up broad opportunities for utilizing the productive forces in the interest of society as a whole, for economic growth without crises, and for the elimination of unemployment, inflation, and the other socioeconomic contradictions inherent in capitalism.

Socialization of the most important means of production shatters and then abolishes the economic base of the exploiters’ dominance of the working class and therefore exploitation itself. Socialization also creates the objective conditions for further socialist transformations and for the planned development of the economy with the aim of raising the living standard of the toiling masses. “The distinguishing feature of communism is not the abolition of property generally, but the abolition of bourgeois property” (K. Marx and F. Engels, Soch., 2nd ed., vol. 4, p. 438). Thus, the establishment of social ownership and the appearance of the communist mode of production are part of the same process. In the course of its oncoming development, the social property (physical objects, material resources, and their form) becomes the result of socialist expanded reproduction. Small-scale private ownership by commodity producers, based on individual labor, is gradually and voluntarily transformed into social ownership throughout the entire transition period from capitalism to socialism.

In contrast to capitalist ownership, which comes into being within the feudal order, socialist ownership cannot emerge under capitalism since communism presupposes the creation of new economic relations and forms that are entirely different from those existing under capitalism. Social ownership does not arise spontaneously but results from the conscious transfer of the means of production into the hands of the people, a transfer organized and directed by the working class, which takes power during a socialist revolution.

Contemporary bourgeois economists, especially the proponents of reformism, assert that social ownership may arise and develop without a revolutionary transformation of bourgeois society and without the establishment of a dictatorship of the proletariat. The reformists and right-wing revisionists argue that the socialist system—by which they mean state-monopoly ownership—arises within capitalism. They deduce from this that capitalism evolves into socialism, which thus emerges within the capitalist system itself, and that consequently there is no need for a revolutionary replacement of capitalist private property by social ownership. The bourgeois theory of people’s capitalism rests on the idea of a “revolution” in private property relations, as a result of which private property would cease to be the monopoly of the capitalist class and would become the property of the people. Stockholding is regarded as a social form of ownership that eliminates the exploitation of man by man. From this the reformists conclude that capitalist private ownership of the means of production can be transformed into a form of ownership that abolishes class differences between capitalists and workers.

In focusing on the objective process of socialization that takes place within capitalist production, all these theories avoid the main issue—the nature of ownership (who owns the means of production and who appropriates the products of labor) and its role in the system of production relations.

Social ownership is the foundation of the socialist economic system and determines the internal structure of the two phases of communist society. The joint, collective appropriation of the means of production also changes the relations between individuals, creates common interests, and liberates people from all types of social oppression. Social ownership bridges the gulf between the direct producers and the material conditions of their productive activity. As members of a socialist society, all workers have an equal right to the means of production, and this circumstance unifies labor and ownership. Socialist ownership of the means of production abolishes antagonistic relations between people, ensures that public and individual interests are identical, and promotes socialist competition, cooperation, and mutual assistance between workers in their productive activity. The means of production function as means owned by producers associated on a national scale. Being socially owned, the means of production cease to be a means of exploitation, whereupon the class structure of society is altered. A new goal is set for production—the satisfaction of the needs of all members of society.

When the means of production are socially owned, production relations conform to the nature and level of the productive forces: the social nature of production corresponds to social ownership of the means of production, assuring the growth of productive forces. Social ownership fundamentally alters the nature of labor, which becomes social labor—that is, labor for the producer and for the producer’s society. In a socialist society, the predominance of social ownership also determines the collective management of production, organized on the principle of democratic centralism.

Social ownership of the means of production develops in two stages—socialism and communism. Socialist ownership reflects a lower development of society’s productive forces and therefore constitutes a less mature form of social ownership than communist ownership. Socialist ownership exists in two forms, as ownership by all the people and as cooperative ownership, depending on the historical conditions under which it develops. The property of all the people includes land (all the land in the USSR and the Mongolian People’s Republic and part of the land in other socialist countries), mineral resources, water, forests, factories, mines, transport, banks, communications, state agricultural enterprises, and state-owned housing.

Under socialism, ownership by all the people takes the form of state ownership. The socialist state directs the economic life of society, including the operation, management, and expansion of socialist production and the rational utilization of the aggregate social product for the benefit of all. The socialist state also instills in each member of society a proprietary attitude toward socialist property and a communist attitude toward labor. All members of society are socially equal with respect to the material conditions of social labor. However, under socialism considerable differences still exist between individuals as to their position and role in social production. These differences are reflected in the existence of a diversity of occupational, local, and national interests. Individuals are linked to the social means of production through their relationship to the socialist state, its administrative agencies, enterprises, and institutions. The members of society participate in the relations of ownership by all the people by virtue of belonging to the work force of enterprises or institutions that are entrusted with the operational management of part of the state property.

The cooperative form of socialist ownership arises through the development of all forms of cooperation. Cooperatives are collective owners that possess, use, and dispose of their means of production and products. Socialist property owned by all the people differs from cooperative property, although they are the same type of property. In socialist countries, the civil and criminal law codes protect the various aspects of socialist ownership and socialist property.

Ownership by all the people (state ownership) is the dominant form of ownership under socialism. In the USSR in the mid-1970’s about 90 percent of the country’s social production assets were state property. The centralization of most of the means of production through state ownership permits the conscious regulation of all social production through a single economic plan that is carried out by establishing planned targets obligatory for each enterprise. Socialist ownership also makes it possible to place a large part of the country’s revenues in a single state fund and to allocate them for social production according to a plan. Socialist property relations improve as socialism develops. The distinction between the cooperative and state property gradually disappears, and conditions develop for the gradual emergence of communist property.

In socialist reproduction, the means of production that are produced become social property. Consumer goods created by socialist production, however, are divided into two social forms that differ considerably from the standpoint of property relations. Some of these goods become part of a consumption fund and are reproduced as state property. Examples include most housing, the buildings and equipment of educational and medical institutions, and the assets of libraries and museums. The rest of the consumer goods become personal property intended for individual use.

The principle of distribution according to labor results in property differences between members of society, in some inequality with respect to the amount and structure of personal property. Consequently, although individuals are equal with respect to the means of production, they are unequal with respect to consumer goods. This is the contradiction inherent in property relations under socialism. The dependence of individual income and of the amount of personal property on each individual’s labor in social enterprises creates a stimulus for the progressive development of socialist production. Growth in the scale of social production is the economic basis for an increase in the material wealth that becomes the personal property of individual members of society. Thus, the collective labor of participants in socialist production becomes a source of social and personal property, and the expansion of social reproduction is simultaneously the expanded reproduction of socialist property relations. In distributing state, cooperative, or personal property, not only is its monetary value important but also its concrete form and the extent to which it satisfies society’s needs. As a result, the goal of socialist production is the creation not of value but of social use value.

Such social organizations as political parties, labor unions, youth organizations, and sport associations also own property in a socialist society. These organizations are not involved in production and only participate in commodity distribution and consumption.