Profit in Socialism

[Cyberwave]

I've been having a large debate with a strong supporter of laissez-faire and he believes that socialism can not generate any profit. I have explained that generally speaking, profit itself is not a central theme of socialism and that nonetheless since workers are given equal opportunity to contribute through their jobs, with benefits, profits can indeed exist, but nonetheless he remains skeptical and critical as well.

So how do profits play into socialism?

[Psy]

Profits would not really exist as there would not be any surplus value but that simply means accounting would take in account the value generated workers that would cancel out revenues.

Yet there would be creation of new value it just would not be surplus value due LTV accounting. For example if a communist factory produced $X worth of goods it means the workers produced $X worth of goods minus the dead labor the factory itself consumed (electricity, water, sewers, raw materials and their transportation to the factory,ect).

[Cyberwave]

Yes. The arguers main point is that a nation could not sustain itself without profit, however. Of course he is thinking in terms of socialism in one country, but nonetheless I can see what he's saying even if I don't agree exactly.

[Red Commissar]

You can argue with him all you want. The fact is he'll remain committed to laissez-faire capitalism as much as you will be to socialism. No matter what you two tell one another, it is unlikely you will cause the other to do a 180 on their beliefs.

I imagine what he's working off is that innovations require people to know they can make a profit off their hard work. I dare say he might subscribe to the capitalist notion of the queen bees/captains of industries in our society, the ones that need to be allowed to reap profits for their work and continue "benefiting" society. Of course we all see them for what they really are, robber barons.

[Robocommie]

There can still be profits, because a workplace which is democratically organized and owned by the workers in a socialist manner will still produce net income - just because there isn't a class of parasites whose only real purpose is to justify their own existence while feeding off of the labors of others doesn't mean there won't be a profit. That profit will just be made communally.

[Glenn Beck]

In this sense, socialism is exactly like capitalism except that the people that work in an enterprise also run it. The role of the proprietor is completely redundant: there isn't anything he does that can't be accomplished either directly by the workers collectively or by a representative they choose to appoint (just like capitalists appoint managers to run aspects of their business). There would still be "profit" in the sense that production would continue and could continue to be expanded through investment.

This is distinct from the goal of capitalism which is the accumulation of money from selling commodities for a greater sum than you paid out in wages and capital costs (the difference being the profit). Increases in production don't come from the magical properties of currency, the currency is simply used by the capitalist system to control the flow of labor and machinery. Production is expanded by increasing either the amount of labor or the productivity of that labor through the use of capital goods. There is no reason why a socialist enterprise can't produce more machines or obtain them from another enterprise, or take on a larger workforce. Socialist economies simply use another mechanism besides cash flows on a market for coordinating the allocation of labor and means of production, typically some form of planning.

[Kenco Smooth]

Whilst I'm not too familiar with the Marxist-Lenninist definition of socialism every other far left group seems to go with worker ownership of the workplace. There is absolutely no reason whatsoever that profits could not be created here.

[The Red Panther Party]

Well profit wouldnt exist in the sense that there would not be a factory owner making money off the stuff the workers produce
Also in a planned economy labour wont be wasted on making keyrings etc, as consumer products would not be produced for profit.

[FSL]

Yes. The arguers main point is that a nation could not sustain itself without profit, however. Of course he is thinking in terms of socialism in one country, but nonetheless I can see what he's saying even if I don't agree exactly.


Nations don't live off profits, they live off goods and services. He, and regrettably to some extent you too, just have a really messed up idea of what an economy is.

[Jacobinist]

My natural instincts are to type in big caps: FUCK PROFITS, NO GODS NO MASTERS!!!

But, well lets be a bit pragmatic. First off the term 'profits' is vague. What do you consider profits? Leisure time could be a profit, as could a surplus of some commodity. Only in kapitalist-industrialist societies has profit become associated with accumulation of 'materials' or artificially valued state currencies. That being said, worker run co-ops in kapitalist societies provide another viable alternative to the common hierarchial structure; and still create profits. Only problem is, profits is not easily defined.

[Psy]

My natural instincts are to type in big caps: FUCK PROFITS, NO GODS NO MASTERS!!!

But, well lets be a bit pragmatic. First off the term 'profits' is vague. What do you consider profits? Leisure time could be a profit, as could a surplus of some commodity. Only in kapitalist-industrialist societies has profit become associated with accumulation of 'materials' or artificially valued state currencies. That being said, worker run co-ops in kapitalist societies provide another viable alternative to the common hierarchial structure; and still create profits. Only problem is, profits is not easily defined.
I doubt communist accounts would think in profits even utility/labor value as utility is not really quantifiable as utility is a quality.

[CartCollector]

Profits = M' - M, from Marx's investment formula M -> C -> M'. That is to say they're the extra money you make from buying capital.

[mikelepore]

There can still be profits, because a workplace which is democratically organized and owned by the workers in a socialist manner will still produce net income - just because there isn't a class of parasites whose only real purpose is to justify their own existence while feeding off of the labors of others doesn't mean there won't be a profit. That profit will just be made communally.


In this sense, socialism is exactly like capitalism except that the people that work in an enterprise also run it. The role of the proprietor is completely redundant: there isn't anything he does that can't be accomplished either directly by the workers collectively or by a representative they choose to appoint (just like capitalists appoint managers to run aspects of their business). There would still be "profit" in the sense that production would continue and could continue to be expanded through investment.

But "profit" doesn't mean wealth that is retained by industry and put back into the process, thereby allowing expansion. "Profit" means wealth that _could have_ been poured back into achieving expansion and improvement, but was instead pulled out of the process and sent to someone who is outside the production process. A business pays a dividend _instead of_ using that equivalent amount of funding to further develop production.

[Common_Means]

Extra-curricular activities do not magically produce themselves. Surplus-value is an absolute requirement for those industries that do not produce value. Otherwise, they will cease to exist.

The difference is that under socialism, the s-v will be produced by the people, for the people. Depending on the decided form of governance, the allocation would be dependent on the will of the people - and not the will of the capitalist.

[ZeroNowhere]

Um, under socialism, there would not be commodity production, and labour would be directly social, rather than requiring the mediation of value. Surplus-value could be used in an analogical sense, possibly, but the economic category, which you seem to be using, would not exist.


Within the co-operative society based on common ownership of the means of production, the producers do not exchange their products; just as little does the labor employed on the products appear here as the value of these products, as a material quality possessed by them, since now, in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor.
As values, commodities are social magnitudes, that is to say, something absolutely different from their “properties” as “things”. As values, they constitute only relations of men in their productive activity. Value indeed “implies exchanges”, but exchanges are exchanges of things between men, exchanges which in no way affect the things as such. A thing retains the same “properties” whether it be owned by A or by B. In actual fact, the concept “value” presupposes “exchanges” of the products. Where labour is communal, the relations of men in their social production do not manifest themselves as “values” of “things”.-Both Marx

If there is accumulation in socialism, it will take the form of an accumulation of objects, of materials useful to human needs, and these will have no need to appear alternatively as money, nor to undergo the application of a 'moneymeter' allowing them to be measured and compared according to a 'general equivalent'. Thus these objects will no longer be commodities and will no longer be defined except by their quantitative physical magnitude and by their qualitative nature, what the economists, and Marx also, for explanatory purposes, express by the term use-value.
-Bordiga.


Whilst I'm not too familiar with the Marxist-Lenninist definition of socialism every other far left group seems to go with worker ownership of the workplace. There is absolutely no reason whatsoever that profits could not be created here.I'm fairly sure most people refer to that as a 'co-operative'. Co-operatives are certainly not incompatible with capitalism, yes.


Wages are not the only positive economic phenomenon which allows us to state that the fall of the capitalist form has not yet been reached. We could express this same concept by saying that socialism does not yet exist when a value is attributed to labour; and it is the same when any other commodity is attributed an exchange value.
A system of commercial exchange between free and autonomous enterprises such as might be supported by cooperators, syndicalists, libertarians, has no historical possibility nor any socialist character. It is even a step backward compared with numerous sectors already organised on a general scale in the bourgeois epoch, as required by technology and the complexity of social life. Socialism, or communism, means that the whole of society is a single association of producers and consumers.-Both Bordiga.

[Gravediggers]

I've been having a large debate with a strong supporter of laissez-faire and he believes that socialism can not generate any profit. I have explained that generally speaking, profit itself is not a central theme of socialism and that nonetheless since workers are given equal opportunity to contribute through their jobs, with benefits, profits can indeed exist, but nonetheless he remains skeptical and critical as well.

So how do profits play into socialism?

Short answer, profits have no part to play in socialism for the social relationship between capital and labour has no further purpose and been abolished along with the state, borders, classes and private/state ownership.

Long answer, socialism is about the global common ownership of the means of living, with free access to the wealth produced and distributed by the global community under the democratic control of the global community. With production of commodities being replaced by production for use there is no exchange(s) taking place between capital and labour with the creation of surplus value, from which profit originates.

[Turinbaar]

The worker's co-operative is a creation of the workers movement that was born in 1844, a few years before the manifesto's publishing, in england and has survived relatively unchanged as a model of labor organization through numerous depressions and crisis since. The medical marijuana co-operative farms and distribution centers in California were the main engine of taxable business keeping the state afloat during the 08' crisis.

I work in a member owned co-operative that was formed in 1938 called REI. Like all others, it is democratically controlled by the workers, though it retains profit as a motive, whose distribution is subject to the collective will of the workers. Workers can vote for higher pay rates, and health benefits, and elect or impeach members of the board of directors. REI has never been in debt, and has fared comparatively well in the market in recent years, when many capitalists became whining leaches of the state, precisely because the co-op avoids the stock market entirely and sells shares directly to the customer in the form of a membership account.

What President Obama should have done when arriving into office with a banking industry whose primary stock was owned by the state, was to fire and indict the leadership of the industry and remodel the ten major banks in the co-operative model, and restrict loans from those banks to those corporations who conformed and called popular elections and referendums among the workers. Those who refused could be allowed to continue failing and ultimately collapse under their own contradictions and in their place could rise the workers republic. Sadly, Obama is too cowardly to see a real road to change, so he sticks to convention and liberalism.