Socially Necessary Labor

(1) Labor distributed among the branches of production in accordance with the structure and magnitude of social needs. Under capitalism, with its inherent anarchy of social production and its competitive struggle, the distribution of social labor among the various branches of production takes place spontaneously. This division is influenced by the way prices and the value of commodities diverge as a result of disparities between the supply of commodities on the market and consumer demand. This process of shaping sociaily necessary labor is a characteristic of the regulating role of the law of value in capitalist production.

(2) Labor expended to produce a certain commodity under the normal conditions of production in a society—at the average level of technology, with the average intensity of labor, and with the average level of worker skills. Under capitalism, socially necessary labor takes shape as a result of the competitive struggle within branches of the economy through the operation of the law of market value. The outlays of socially necessary labor constitute the substance of the social value of a commodity and determine the magnitude of a commodity’s social value. The expenditure of socially necessary labor is measured by the labor expenditure of the average labor power of society, which “requires for producing a commodity no more time than is needed on an average, no more than is socially necessary” (K. Marx, in K. Marx and F. Engels, Soch., 2nd ed., vol. 23, p. 47).

In socialist society, the distribution of social labor among the various branches of the economy is a conscious social act in accordance with a previously worked-out plan. Socially necessary labor that is shaped to meet social needs is based on application of the law of planned proportional development of the national economy as the regulator of social production. This law operates in close connection with other economic laws, above all, with the fundamental economic law of socialism. Socialist society distributes its material and labor resources among the various branches of the economy with an eye not only to social needs but also to the level of development of the productive forces at the disposal of the enterprises that make up the various branches of the economy.

The labor of the workers in each socialist enterprise to which quotas for the production of certain goods are assigned constitutes a part of the total social labor power. Under the planning system this labor is counted as part of the total social labor power. In other words, it is regarded as labor that is necessary to society and that must be expended on the production of goods needed by society.

The individual labor of the workers in a particular enterprise is not, however, the equivalent of the socially necessary labor expended per unit of output in that branch of the economy. Planned quotas for the production of goods are assigned to enterprises having different levels of labor productivity. Hence the individual expenditures of living labor and congealed labor to produce goods of the same use value may vary from enterprise to enterprise. In planned socialist production there is the closest and most direct link between the expenditure of socially necessary labor to produce one unit of output of a certain use value and the socially necessary expenditure of labor to produce the total output of this particular type of goods. This creates a situation in which the socially necessary expenditure of labor to produce one unit of output becomes the weighted average of labor input. This average is determined chiefly by the conditions of production in those enterprises where the bulk of the goods in question is produced.

As a result of increased labor productivity, the socially necessary labor expended to produce one unit of output is being reduced, the social value of goods is becoming less, and more and more social labor is being economized. In capitalist society this economy of social labor is made to serve the interests of the ruling class. The capitalists seek to reduce production costs and thus increase profits. Under socialism, economy of social labor makes it possible, first, to expand production of goods and services needed by society. Second, when a sufficient quantity of goods is produced whose social value has been reduced as a result of savings in the expenditure of socially necessary labor, the prices of these goods can be reduced. Both possibilities serve the interests of the people and raise the standard of living.