Socialism or communism (or the socialist mode of production or the communist mode of production) is the society that is predicted on the basis of the materialist conception of history to succeed capitalism.
Socialism is based on common ownership of the means of production, cooperative labour, and freely associated producers (or, the free association of equal producers) that administer production on the basis of a social plan. The socialist character of labour, unlike in capitalism (see Law of Value), is directly expressed (directly or immediately social labour) via the association of producers. Consequently, socialism is a society without commodity production, commodity exchange (and markets) and therefore without a universal equivalent (i.e. money).
The superstructure arising from this base or economic structure would be based on collective administration of free and social individuals. Socialism is therefore a stateless society.
Socialism is an essentially contested concept and can be defined in a number of ways. Adopting an idealist approach in defining socialism allows for putting abstract ideas first. Those that like workers' self-management we can define socialism as synonymous with a system based on workers' self-management. Those that like welfare states can define socialism as such. Using this idealist approach anything can be embraced and denounced as socialism if there is some historical continuity between the classical socialism of the nineteenth century and some political position today. Marxism takes a different approach determining what socialism is, not as abstract ideological concept, but based on the objective forces of the development of history. Socialism, using this materialist approach, is not defined by what socialists would ideally like it to be, but by what it will be according to material conditions.
Marxism begins by analysing the social development as it plays out through history, which is the result of the objective factor of the development of productive forces which births class antagonisms and class conflict. Capitalism did not come about by arguments and the rationality of great philosophers or thinkers like Adam Smith. Similarly, the basis for socialism is not arguments, philosophy, rationality, morality or persuasion but capitalism. This is summarised by Marx as: “Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.” (German Ideology by Karl Marx).
We can discern various tendencies within capitalism that reveal what socialism will look like. First, we can observe the development of the socialisation of the production and labour process, itself a product of the concentration of capital which also furthers planning (though still constrained by the 'anarchy of the market'). Labour in capitalism is still executed privately. Consequently, the social character of labour is realised via the exchange of commodities. We can also observe that social classes have materially opposing interests producing antagonisms, tensions, and conflict. Social ownership would come about through socialised production being confronted with class struggle. As Engels commented: it is "slipping from the hands of the bourgeoisie, into public property. By this act, the proletariat frees the means of production from the character of capital they have thus far borne, and gives their socialized character complete freedom to work itself out. Socialized production upon a predetermined plan becomes henceforth possible." Workers, or the immediate producers, assume control over production and integrate all productive establishment in an association. Wage-labour is replaced by associated labour. Commodity production is "entirely inconsistent with" associated labour. (Capital, Marx) (see: Law of Value).
Socialism in Marxism is defined as a mode of production originating from the contradictions and conflicts within capitalism. The mode of production of socialism is defined as based on common ownership (or social ownership), associated labour, and production for use or utility.