1.an economic system based on state ownership of capital
2.(politics)a political theory advocating state ownership of industry
1.(MeSH)A system of government in which means of production and distribution of goods are controlled by the state.
SocialismSo"cial*ism (?), n. [Cf. F. socialisme.] A theory or system of social reform which contemplates a complete reconstruction of society, with a more just and equitable distribution of property and labor. In popular usage, the term is often employed to indicate any lawless, revolutionary social scheme. See Communism, Fourierism, Saint-Simonianism, forms of socialism.
[Socialism] was first applied in England to Owen's theory of social reconstruction, and in France to those also of St. Simon and Fourier . . . The word, however, is used with a great variety of meaning, . . . even by economists and learned critics. The general tendency is to regard as socialistic any interference undertaken by society on behalf of the poor, . . . radical social reform which disturbs the present system of private property . . . The tendency of the present socialism is more and more to ally itself with the most advanced democracy. Encyc. Brit.
We certainly want a true history of socialism, meaning by that a history of every systematic attempt to provide a new social existence for the mass of the workers. F. Harrison.
-- Socialism of the chair [G. katheder socialismus], a term applied about 1872, at first in ridicule, to a group of German political economists who advocated state aid for the betterment of the working classes.
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Socialism // is an economic system characterised by social ownership and/or control of the means of production and cooperative management of the economy, and a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises. There are many variations of socialism and as such there is no single definition encapsulating all of socialism. They differ in the type of social ownership they advocate, the degree to which they rely on markets versus planning, how management is to be organised within economic enterprises, and the role of the state in constructing socialism.
A socialist economic system would consist of an organisation of production to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital, and accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time. Distribution of output would be based on the principle of individual contribution.
As a political movement, socialism includes a diverse array of political philosophies, ranging from reformism to revolutionary socialism. Proponents of state socialism advocate for the nationalisation of the means of production, distribution and exchange as a strategy for implementing socialism. Libertarian socialism proposes to direct worker's control of the means of production and opposes the use of state power to achieve such an arrangement, opposing both parliamentary politics and state ownership over the means of production. Conversely, democratic socialism seeks to propagate the ideals of socialism within the context of a democratic system.
Modern socialism originated from an 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private property on society. In the early 19th-century, "socialism" referred to any concern for the social problems of capitalism regardless of the solution. However, by the late 19th-century, "socialism" had come to signify opposition to capitalism and advocacy for an alternative system based on some form of social ownership. Utopian socialists such as Robert Owen (1771–1858) tried to found self-sustaining communes by secession from a capitalist society. Socialists inspired by the Soviet model of economic development, such as Marxist-Leninists, have advocated the creation of centrally planned economies directed by a single-party state that owns the means of production. Yugoslavian, Hungarian, East German and Chinese communist governments have instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production).
Socialists adhere to a diverse range of philosophical views. Marxian socialism is philosophically materialist as well as having at its centre a commitment to historical materialism. Many forms of socialist theory hold that human behaviour is largely shaped by the social environment. In particular, Marxism and socialists inspired by Marxist theory, holds that social mores, values, cultural traits and economic practices are social creations, and are not the result of an immutable natural law. The ultimate goal for Marxist socialists is the emancipation of labour from alienating work. Marxists argue that freeing the individual from the necessity of performing alienating work in order to receive goods would allow people to pursue their own interests and develop their own talents without being coerced into performing labour for others. For Marxists, the stage of economic development in which this is possible is contingent upon advances in the productive capabilities of society.
Socialists generally argue that capitalism concentrates power and wealth within a small segment of society that controls the means of production and derives its wealth through a system of exploitation. This creates a stratified society based on unequal social relations that fails to provide equal opportunities for every individual to maximise their potential, and does not utilise available technology and resources to their maximum potential in the interests of the public,
Socialists hold that capitalism is an illegitimate economic system, since it largely serves the interests of the owners of capital and involves the exploitation of other economic classes. As such, they wish to replace it completely or at least make substantial modifications to it, in order to create a more just society that would guarantee a certain basic standard of living.
The original conception of socialism was an economic system whereby production was organised in a way to directly produce goods and services for their use-value; the direct allocation of resources according to satisfy economic demands without financial calculation and the mobilisation of the economy based on physical units as opposed to the economic laws of capitalism (see: Law of value), often entailing the end of capitalistic economic categories such as rent, interest, profit and money.
This is contrasted with capitalism, where production is carried out for profit, and thus based upon indirect allocation. In an ideal capitalism based on perfect competition, competitive pressures compel business enterprises to respond to the needs of consumers, so that the pursuit of profit approximates production for use through an indirect process (competitive pressures on private firms).
Market socialism refers to an array of different economic theories and systems that utilise the market mechanism to organise production and to allocate factor inputs among socially-owned enterprises, with the economic surplus (profits) accruing to society as a social dividend as opposed to private capital owners. Variations of market socialism include Libertarian proposals such as mutualism, and neoclassical economic models such as the Lange Model.
The ownership of the means of production can be based on direct ownership by the users of the productive property through worker cooperative; or commonly owned by all of society with management and control delegated to those who operate/use the means of production; or public ownership by a state apparatus. Public ownership may refer to the creation of state-owned enterprises, nationalisation or municipalisation. The fundamental feature of a socialist economy is that publicly owned, worker-run institutions produce goods and services in at least the commanding heights of the economy.
Management and control over the activities of enterprises is based on self-management and self-governance, with equal power-relations in the workplace to maximise occupational autonomy. A socialist form of organisation would eliminate controlling hierarchies so that only a hierarchy based on technical knowledge in the workplace remains. Every member would have decision-making power in the firm and would be able to participate in establishing its overall policy objectives. The policies/goals would be carried out by the technical specialists that form the coordinating hierarchy of the firm, who would establish plans or directives for the work community to accomplish these goals.
The role and use of money in a hypothetical socialist economy is a contested issue. Socialists including Karl Marx, Robert Owen and Pierre-Joseph Proudhon advocated various forms of labour vouchers or labour-credits, which like money would be used to acquire articles of consumption, but unlike money they would not be capable of becoming capital and would not be used to allocate resources within the production process. Bolshevik revolutionary Leon Trotsky argued that, following a socialist revolution, money could not be arbitrarily abolished. Money had to exhaust its "historic mission" (continue to be used until it became redundant), and then later transformed into bookkeeping receipts for statisticians, and in the more distant future, might not be required for even that role.
"I am convinced there is only one way to eliminate (the) grave evils (of capitalism), namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow-men in place of the glorification of power and success in our present society."
A planned economy is a type of economy consisting of a mixture of public ownership of the means of production and the coordination of production and distribution through state planning. Enrico Barone provided a comprehensive theoretical framework for a planned socialist economy. In his model, assuming perfect computation techniques, simultaneous equations relating inputs and outputs to ratios of equivalence would provide appropriate valuations in order to balance supply and demand.
The most prominent example of a planned economy is the economic system of the Soviet Union, and as such, the centralised-planned economic model is usually associated with the Communist states of the 20th century, where it was combined with a single-party political system. In a centrally planned economy, decisions regarding the quantity of goods and services to be produced are planned in advance by a planning agency. (See also: Analysis of Soviet-type economic planning).
The economic systems of the Soviet Union and the Eastern Bloc are further classified as command economies, which are defined as systems where economic coordination is undertaken by commands, directives and production targets. In these systems, centralised planning determined what goods and services were to be provided, how they were to be produced, the quantities, and the sale prices. Soviet economic planning was an alternative to allowing the market (supply and demand) to determine prices for producer and consumer goods. The Soviet economy utilised material balance accounting in order to balance the supply of available inputs with output targets, although this never totally replaced financial accounting. Although the Soviet economy was nominally a centrally-planned economy, in practice the plan was formulated on-the-go as information was collected and relayed from enterprises to planning ministries.
Various economists[who?] and political theorists have criticised the notion that the Soviet-style planned economies represented a type of socialist economy. This analysis highlights the fact that the Soviet economy was structured upon the accumulation of capital and the extraction of surplus value from the working class by the planning agency in order to reinvest the surplus in new production in a perpetual cycle – or to distribute to managers and senior officials in the form of bonuses, indicating the Soviet Union (and other Soviet-type economies) were in reality state capitalist economies. Other socialists have focused on the lack of self-management, the continued existence of financial calculation and the existence of a bureaucratic elite based on hierarchical and centralised powers of authority in the Soviet model, leading them to conclude that the Soviet system was not socialist, instead categorising it as bureaucratic collectivism, state capitalism or deformed workers' states.
A self-managed decentralised economy is based upon autonomous self-regulating economic actors and a decentralised mechanism of allocation and decision-making and has found support in notable classical and neoclassical economists including Alfred Marshall, John Stuart Mill and Jaroslav Vanek. There are numerous variations of self-management, including labour-managed firms and worker-managed firms. The goals of self-management are to eliminate exploitation and reduce alienation. Historically, this manifested itself in proposals for worker-cooperatives and decentralised planning through workplace democracy.
A degree of self-management was practised in the economic system of the Socialist Federal Republic of Yugoslavia, which contrasts to the centralised planning of enterprises in Soviet-style planned economies.
One such system is the cooperative economy, a largely free market economy in which workers manage the firms and democratically determine remuneration levels and labour divisions. Productive resources would be legally owned by the cooperative and rented to the workers, who would enjoy usufruct rights. Another form of decentralised planning is the use of cybernetics, or the use of computers to manage the allocation of economic inputs. The socialist-run government of Salvador Allende in Chile experimented with Project Cybersyn, a real-time information bridge between the government, state enterprises and consumers. Another, more recent, variant is participatory economics, wherein the economy is planned by decentralised councils of workers and consumers. Workers would be remunerated solely according to effort and sacrifice, so that those engaged in dangerous, uncomfortable, and strenuous work would receive the highest incomes and could thereby work less. A contemporary model for a self-managed, non-market socialism is Pat Devine's model of negotiated coordination. Negotiated coordination is based upon social ownership by those affected by the use of the assets involved, with decisions made by those at the most localised level of production.
Michel Bauwens identifies the emergence of the open software movement and peer-to-peer production as a new, alternative mode of production to the capitalist economy and centrally-planned economy that is based on collaborative self-management, common ownership of resources, and the production of use-values through the free cooperation of producers who have access to distributed capital.
Anarchist communism is a theory of anarchism which advocates the abolition of the state, private property, and capitalism in favour of common ownership of the means of production. De-centralized planning is associated with the political movements of social anarchism, anarcho-communism, Trotskyism, council communism, left communism and democratic socialism.
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A state-directed economy is a system where either the state or worker cooperatives own the means of production, but economic activity is directed to some degree by a government agency or planning ministry through coordinating mechanisms such as indicative planning and dirigisme. This differs from a centralised planned economy (or a command economy) in that micro-economic decision making, such as quantity to be produced and output requirements, are left to managers and workers in the state and cooperative enterprises rather than being mandated by a comprehensive economic plan from a centralised planning board. However, the state will plan long-term strategic investment and seek to coordinate at least some aspects of production. It is possible for a state-directed economy to have elements of both a market and planned economy. For example, investment decisions may be semi-planned by the state, but decisions regarding production may be determined by the market mechanism.
Nationalisation in the UK was achieved through compulsory purchase of the industry (i.e. with compensation). British Aerospace was a combination of major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders was a combination of the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, and Yarrow Shipbuilders; the nationalisation of the coal mines in 1947 created a coal board charged with running the coal industry commercially so as to be able to meet the interest payable on the bonds which the former mine owners' shares had been converted into.
Market socialism consists of publicly owned or cooperatively owned enterprises operating in a market economy. It is a system that utilises the market and monetary prices for the allocation and accounting of the means of production, thereby retaining the process of capital accumulation. The profit generated would be used to directly remunerate employees or finance public institutions. In state-oriented forms of market socialism, in which state enterprises attempt to maximise profit, the profits can be used to fund government programs and services through a social dividend, eliminating or greatly diminishing the need for various forms of taxation that exist in capitalist systems. The neoclassical economist Léon Walras believed that a socialist economy based on state ownership of land and natural resources would provide a means of public finance to make income taxes unnecessary. Yugoslavia implemented a market socialist economy based on cooperatives and worker self-management.
A market socialist economic system would consist of an organisation of production to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital, and accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time. Distribution of output would be based on the principle of individual contribution.
The current economic system in China is formally titled Socialist market economy with Chinese characteristics. It combines a large state sector that comprises the 'commanding heights' of the economy, which are guaranteed their public ownership status by law, with a private sector mainly engaged in commodity production and light industry responsible from anywhere between 33% (People's Daily Online 2005) to over 70% of GDP generated in 2005. However by 2005 these market-oriented reforms, including privatisation, virtually halted and were partially reversed. The current Chinese economy consists of 150 corporatised state enterprises that report directly to China's central government. By 2008, these state-owned corporations had become increasingly dynamic and generated large increases in revenue for the state, resulting in a state-sector led recovery during the 2009 financial crises while accounting for most of China's economic growth.
The Socialist Republic of Vietnam has adopted a similar model after the Doi Moi economic renovation, but slightly differs from the Chinese model in that the Vietnamese government retains firm control over the state sector and strategic industries, but allows for private-sector activity in commodity production.
"We want to achieve a new and better order of society: in this new and better society there must be neither rich nor poor; all will have to work. Not a handful of rich people, but all the working people must enjoy the fruits of their common labour. Machines and other improvements must serve to ease the work of all and not to enable a few to grow rich at the expense of millions and tens of millions of people. This new and better society is called socialist society. The teachings about this society are called socialism."
In this context, socialism has been used to refer to a political movement, a political philosophy and a hypothetical form of society these movements aim to achieve. As a result, in a political context socialism has come to refer to the strategy (for achieving a socialist society) or policies promoted by socialist organisations and socialist political parties; all of which have no connection to socialism as a socioeconomic system.
In the most influential of all socialist theories, Karl Marx and Friedrich Engels believed the consciousness of those who earn a wage or salary (the "working class" in the broadest Marxist sense) would be moulded by their "conditions" of "wage-slavery", leading to a tendency to seek their freedom or "emancipation" by overthrowing ownership of the means of production by capitalists. For Marx and Engels, conditions determine consciousness and ending the role of the capitalist class leads eventually to a classless society in which the state would wither away.
Marx wrote: "It is not the consciousness of [people] that determines their existence, but their social existence that determines their consciousness."
The Marxist conception of socialism is that of a specific historical phase that will displace capitalism and precede communism. The major characteristics of socialism (particularly as conceived by Marx and Engels after the Paris Commune of 1871) are that the proletariat will control the means of production through a workers' state erected by the workers in their interests. Economic activity would still be organised through the use of incentive systems and social classes would still exist, but to a lesser and diminishing extent than under capitalism.
For orthodox Marxists, socialism is the lower stage of communism based on the principle of "from each according to his ability, to each according to his contribution" while upper stage communism is based on the principle of "from each according to his ability, to each according to his need"; the upper stage becoming possible only after the socialist stage further develops economic efficiency and the automation of production has led to a superabundance of goods and services.
Marx argued that the material productive forces (in industry and commerce) brought into existence by capitalism predicated a cooperative society since production had become a mass social, collective activity of the working class to create commodities but with private ownership (the relations of production or property relations). This conflict between collective effort in large factories and private ownership would bring about a conscious desire in the working class to establish collective ownership commensurate with the collective efforts their daily experience.
"At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure."
Che Guevara sought socialism based on the rural peasantry rather than the urban working class, attempting to inspire the peasants of Bolivia by his own example into a change of consciousness. Guevara said in 1965:
Socialism cannot exist without a change in consciousness resulting in a new fraternal attitude toward humanity, both at an individual level, within the societies where socialism is being built or has been built, and on a world scale, with regard to all peoples suffering from imperialist oppression.
For Marxists, the development of capitalism in western Europe provided a material basis for the possibility of bringing about socialism because, according to the Communist Manifesto, "What the bourgeoisie produces above all is its own grave diggers", namely the working class, which must become conscious of the historical objectives set it by society.
Thorstein Veblen saw socialism as an immediate stage in an ongoing evolutionary process in economics that would result from the natural decay of the system of business enterprise; in contrast to Marx, he did not believe it would be the result of political struggle or revolution by the working class and did not believe it to be the ultimate goal of humanity.
Revolutionary socialists believe that revolution is the only means to establish a new socio-economic system. Among revolutionary socialists, some Marxist-Leninists and most Trotskyists advocate the creation of a democratic centralist revolutionary party led by the working class to overthrow the capitalist state and, eventually, the institution of the state altogether. "Revolution" is not necessarily defined by revolutionary socialists as violent insurrection, but as a complete dismantling and rapid transformation of all areas of class society led by the majority of the masses: the working class.
Leon Trotsky held the view that central planners, regardless of their intellectual capacity, operated without the input and participation of the millions of people who participate in the economy and understand/respond to local economic conditions; such central planners would be unable to effectively coordinate all economic activity.
The major socialist political movements are described below. Independent socialist theorists, utopian socialist authors, and academic supporters of socialism may not be represented in these movements. Some political groups have called themselves socialist while holding views that some consider antithetical to socialism. The term socialist has also been used by some politicians on the political right as an epithet against certain individuals who do not consider themselves to be socialists, and against policies that are not considered socialist by their proponents.
There are many variations of socialism and as such there is no single definition encapsulating all of socialism. However there have been common elements identified by scholars. Angelo S. Rappoport in his Dictionary of Socialism (1924) analysed forty definitions of socialism to conclude that common elements of socialism include: general criticisms of the social effects of private ownership and control of capital - as being the cause of poverty, low wages, unemployment, economic and social inequality, and a lack of economic security; a general view that the solution to these problems is a form of collective control over the means of production, distribution and exchange (the degree and means of control vary amongst socialist movements); agreement that the outcome of this collective control should be a society based upon social justice, including social equality, economic protection of people, and should provide a more satisfying life for most people. Bhikhu Parekh in The Concepts of Socialism (1975) identifies four core principles of socialism and particularly socialist society: sociality, social responsibility, cooperation, and planning. Michael Freeden in his study Ideologies and Political Theory (1996) states that all socialists share five themes: the first is that socialism posits that society is more than a mere collection of individuals; second, that it considers human welfare a desirable objective; third, that it considers humans by nature to be active and productive; fourth, it holds the belief of human equality; and fifth, that history is progressive and will create positive change on the condition that humans work to achieve such change.
Anarchism features the political philosophy which holds the state to be undesirable, unnecessary, and harmful, that the state cannot be used to establish a socialist economy and proposes a political alternative based on federated decentralised autonomous communities. It includes proponents of both individualist anarchism and social anarchism. Mutualists advocate free-market socialism, collectivist anarchists workers cooperatives and salaries based on the amount of time contributed to production, anarcho-communists advocate a direct transition from capitalism to libertarian communism and anarcho-syndicalists worker's direct action and the general strike.
Modern democratic socialism is a broad political movement that seeks to propagate the ideals of socialism within the context of a democratic system. Many democratic socialists support social democracy as a road to reform of the current system, but others support more revolutionary tactics to establish socialist goals. Conversely, modern social democracy emphasises a program of gradual legislative reform of capitalism in order to make it more equitable and humane, while the theoretical end goal of building a socialist society is either completely forgotten or redefined in a pro-capitalist way. The two movements are widely similar both in terminology and in ideology, although there are a few key differences.
Democratic socialism generally refers to any political movement that seeks to establish an economy based on economic democracy by and for the working class. Democratic socialists oppose democratic centralism and the revolutionary vanguard party of Leninism. Democratic socialism is difficult to define, and groups of scholars have radically different definitions for the term. Some definitions simply refer to all forms of socialism that follow an electoral, reformist or evolutionary path to socialism, rather than a revolutionary one.
Leninism promotes the creation of a vanguard party, led by professional revolutionaries, to lead the working class in the conquest of the state. They believe that socialism will not arise spontaneously through the natural decay of capitalism, and that workers by themselves are unable to organise and develop socialist consciousness, therefore requiring the leadership of a revolutionary vanguard. After taking power, Leninists seek to create a socialist state in which the working class would be in power, which they see as being essential for laying the foundations for a transitional withering of the state towards communism (Stateless society). Leninism branched into Marxism-Leninism, Trotskyism, Stalinism and Maoism.
Libertarian socialism, or anarchism, is a non-hierarchical, non-bureaucratic, stateless society without private property in the means of production. Libertarian socialists oppose all coercive forms of social organisation, promote free association in place of government, and oppose the coercive social relations of capitalism, such as wage labor. They oppose hierarchical leadership structures, such as vanguard parties, and most are opposed to using the state to create socialism. Currents within libertarian socialism include Marxist tendencies such as left communism, council communism and autonomism, as well as non-Marxist movements such as left anarchism, Communalism, Participism, and Inclusive Democracy.
Christian socialism is a broad concept involving an intertwining of the Christian religion with the politics and economic theories of socialism.
Islamic socialism is a term coined by various Muslim leaders to describe a more spiritual form of socialism. Muslim socialists believe that the teachings of the Qur'an and Muhammad are compatible with principles of equality and public ownership drawing inspiration from the early madina welfare state established by the Prophet Muhammad. Muslim Socialists are more conservative than their western contemporaries and find their roots in Anti-imperialism, anti-colonialism and Arab nationalism. Islamic Socialist leaders believe in Democracy and deriving legitimacy from public mandate as opposed to religious texts.
Social democracy is not itself a socialist system. Rather, traditional social democrats advocated the creation of socialism through political reforms by operating within the existing political system of capitalism. The social democratic movement sought to elect socialists to political office to implement reforms. The modern social democratic movement has abandoned the goal of moving toward a socialist economy and instead advocates for social reforms to improve capitalism, such as a welfare state and unemployment benefits. It is best demonstrated by the economic format which has been used in Sweden, Denmark, Norway, and Finland in the past few decades. This approach has been called the Nordic model.
Syndicalism is a social movement that operates through industrial trade unions and rejects state socialism, or the use of the state to build socialism. Syndicalists advocate a socialist economy based on federated unions or syndicates of workers who own and manage the means of production.
The term socialism is attributed to Pierre Leroux, and to Marie Roch Louis Reybaud; and in Britain to Robert Owen in 1827, father of the cooperative movement. Socialist models and ideas espousing common or public ownership have existed since antiquity. Mazdak, a Persian communal proto-socialist, instituted communal possessions and advocated the public good. And it has been claimed, though controversially, that there were elements of socialist thought in the politics of classical Greek philosophers Plato and Aristotle.
The first advocates of socialism favoured social levelling in order to create a meritocratic or technocratic society based upon individual talent. Count Henri de Saint-Simon is regarded as the first individual to coin the term socialism. Saint-Simon was fascinated by the enormous potential of science and technology and advocated a socialist society that would eliminate the disorderly aspects of capitalism and would be based upon equal opportunities.[unreliable source?] He advocated the creation of a society in which each person was ranked according to his or her capacities and rewarded according to his or her work. The key focus of Simon's socialism was on administrative efficiency and industrialism, and a belief that science was the key to progress.
This was accompanied by a desire to implement a rationally organised economy based on planning and geared towards large-scale scientific and material progress, and thus embodied a desire for a more directed or planned economy. Other early socialist thinkers, such as Thomas Hodgkin and Charles Hall, based their ideas on David Ricardo's economic theories. They reasoned that the equilibrium value of commodities approximated to prices charged by the producer when those commodities were in elastic supply, and that these producer prices corresponded to the embodied labour – the cost of the labour (essentially the wages paid) that was required to produce the commodities. The Ricardian socialists viewed profit, interest and rent as deductions from this exchange-value.
West European social critics, including Robert Owen, Charles Fourier, Pierre-Joseph Proudhon, Louis Blanc, Charles Hall and Saint-Simon, were the first modern socialists who criticised the excessive poverty and inequality of the Industrial Revolution. They advocated reform, with some such as Robert Owen advocating the transformation of society to small communities without private property. Robert Owen's contribution to modern socialism was his understanding that actions and characteristics of individuals were largely determined by the social environment they were raised in and exposed to. On the other hand Charles Fourier advocated phalansteres which were communities that respected individual desires (incluiding sexual preferences), affinities and creativity and saw that work has to be made enjoyable for people. The ideas of Owen and Fourier were tried in practice in numerous intentional communities around Europe and the American continent in the mid-19th century.
Linguistically, the contemporary connotation of the words socialism and communism accorded with the adherents' and opponents' cultural attitude towards religion. In Christian Europe, of the two, communism was believed the atheist way of life. In Protestant England, the word communism was too culturally and aurally close to the Roman Catholic communion rite, hence English atheists denoted themselves socialists.
Friedrich Engels argued that in 1848, at the time when the Communist Manifesto was published, "socialism was respectable on the continent, while communism was not." The Owenites in England and the Fourierists in France were considered "respectable" socialists, while working-class movements that "proclaimed the necessity of total social change" denoted themselves communists. This latter branch of socialism produced the communist work of Étienne Cabet in France and Wilhelm Weitling in Germany.
The term "socialism" was created by Henri de Saint-Simon, a founder of utopian socialism. The term "socialism" was created to contrast against the liberal doctrine of "individualism". The original socialists condemned liberal individualism as failing to address social concerns of poverty, social oppression, and gross inequality of wealth. They viewed liberal individualism as degenerating society into supporting selfish egoism and that harmed community life through promoting a society based on competition. They presented socialism as an alternative to liberal individualism, that advocated a society based on cooperation.
The International Workingmen's Association (IWA), also known as the First International, was founded in London in 1864. The IWA held a preliminary conference in 1865, and had its first congress at Geneva in 1866. Due to the wide variety of philosophies present in the First International, there was conflict from the start. The first objections to Marx's came from the Mutualists who opposed communism and statism. However, shortly after Mikhail Bakunin and his followers (called Collectivists while in the International) joined in 1868, the First International became polarised into two camps, with Marx and Bakunin as their respective figureheads. The clearest differences between the groups emerged over their proposed strategies for achieving their visions of socialism. The First International became the first major international forum for the promulgation of socialist ideas.
As the ideas of Marx and Engels took on flesh, particularly in central Europe, socialists sought to unite in an international organisation. In 1889, on the centennial of the French Revolution of 1789, the Second International was founded, with 384 delegates from 20 countries representing about 300 labour and socialist organisations. It was termed the "Socialist International" and Engels was elected honorary president at the third congress in 1893. Anarchists were ejected and not allowed in mainly because of the pressure from marxists.
|“||If Socialism can only be realized when the intellectual development of all the people permits it, then we shall not see Socialism for at least five hundred years.||”|
By 1917, the patriotism of World War I changed into political radicalism in most of Europe, the United States, and Australia. In February 1917, revolution exploded in Russia. Workers, soldiers and peasants established soviets (councils), the monarchy fell, and a provisional government convoked pending the election of a constituent assembly.
In April of that year, Vladimir Lenin arrived in Russia from Switzerland, calling for "All power to the soviets." In October, his party, the Bolsheviks, won support of most soviets at the second All-Russian Congress of Soviets, while he and Leon Trotsky simultaneously led the October Revolution. As a matter of political pragmatism, Lenin reversed Marx's order of economics over politics, allowing for a political revolution led by a vanguard party of professional revolutionaries rather than a spontaneous establishment of socialist institutions led by a spontaneous uprising of the working class as predicted by Karl Marx. On 25 January 1918, at the Petrograd Soviet, Lenin declared "Long live the world socialist revolution!" He proposed an immediate armistice on all fronts, and transferred the land of the landed proprietors, the crown and the monasteries to the peasant committees without compensation.
On 26 January 1918, the day after assuming executive power, Lenin wrote Draft Regulations on Workers' Control, which granted workers control of businesses with more than five workers and office employees, and access to all books, documents and stocks, and whose decisions were to be "binding upon the owners of the enterprises". Governing through the elected soviets, and in alliance with the peasant-based Left Socialist-Revolutionaries, the Bolshevik government began nationalising banks, industry, and disavowed the national debts of the deposed Romanov royal régime. It sued for peace, withdrawing from World War I, and convoked a Constituent Assembly in which the peasant Socialist-Revolutionary Party (SR) won a majority.
The Constituent Assembly elected Socialist-Revolutionary leader Victor Chernov President of a Russian republic, but rejected the Bolshevik proposal that it endorse the Soviet decrees on land, peace and workers' control, and acknowledge the power of the Soviets of Workers', Soldiers' and Peasants' Deputies. The next day, the Bolsheviks declared that the assembly was elected on outdated party lists, and the All-Russian Central Executive Committee of the Soviets dissolved it.
The Bolshevik Russian Revolution of January 1918 engendered Communist parties worldwide, and their concomitant revolutions of 1917-23. Few Communists doubted that the Russian success of socialism depended upon successful, working-class socialist revolutions in developed capitalist countries. In 1919, Lenin and Trotsky organised the world's Communist parties into a new international association of workers – the Communist International, (Comintern), also called the Third International.
By 1920, the Red Army, under its commander Trotsky, had largely defeated the royalist White Armies. In 1921, War Communism was ended and, under the New Economic Policy (NEP), private ownership was allowed for small and medium peasant enterprises. While industry remained largely state-controlled, Lenin acknowledged that the NEP was a necessary capitalist measure for a country unripe for socialism. Profiteering returned in the form of "NEP men" and rich peasants (Kulaks) gained power in the countryside.
In 1922, the fourth congress of the Communist International took up the policy of the United Front, urging Communists to work with rank and file Social Democrats while remaining critical of their leaders, whom they criticised for betraying the working class by supporting the war efforts of their respective capitalist classes. For their part, the social democrats pointed to the dislocation caused by revolution, and later, the growing authoritarianism of the Communist Parties. When the Communist Party of Great Britain applied to affiliate to the Labour Party in 1920 it was turned down.
In 1923, on seeing the Soviet State's growing coercive power, the dying Lenin said Russia had reverted to "a bourgeois tsarist machine... barely varnished with socialism." After Lenin's death in January 1924, the Communist Party of the Soviet Union – then increasingly under the control of Joseph Stalin – rejected the theory that socialism could not be built solely in the Soviet Union, in favour of the concept of Socialism in One Country. Despite the marginalised Left Opposition's demand for the restoration of Soviet democracy, Stalin developed a bureaucratic, authoritarian government, that was condemned by democratic socialists, anarchists and Trotskyists for undermining the initial socialist ideals of the Bolshevik Russian Revolution.[self-published source?][unreliable source?]
The Russian Revolution of October 1917 brought about the definitive ideological division between Communists as denoted with a capital "С" on the one hand and other communist and socialist trends such as anarcho-communists and social democrats, on the other. The Left Opposition in the Soviet Union gave rise to Trotskyism which was to remain isolated and insignificant for another fifty years, except in Sri Lanka where Trotskyism gained the majority and the pro-Moscow wing was expelled from the Communist Party.
In 1951, British Health Minister Aneurin Bevan expressed the view that, "It is probably true that Western Europe would have gone socialist after the war if Soviet behaviour had not given it too grim a visage. Soviet Communism and Socialism are not yet sufficiently distinguished in many minds."
In 1951, the Socialist International was re-founded by the European social democratic parties. It declared: "Communism has split the International Labour Movement and has set back the realisation of Socialism in many countries for decades... Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition. It has built up a rigid theology which is incompatible with the critical spirit of Marxism."
In the postwar years, socialism became increasingly influential throughout the so-called Third World. Countries in Africa, Asia, and Latin America frequently nationalised industries held by foreign owners. The Soviet Union had become a superpower through its adoption of a planned economy, albeit at enormous human cost. This achievement seemed hugely impressive from the outside, and convinced many nationalists in the former colonies, not necessarily communists or even socialists, of the virtues of state planning and state-guided models of social development. This was later to have important consequences in countries like China, India and Egypt, which tried to import some aspects of the Soviet model.
Prior to its dissolution in 1991, the USSR had the second largest economy in the world after the United States. The economy of the Soviet Union was the modern world's first centrally-planned economy. It was based on a system of state ownership of industry managed through Gosplan (the State Planning Commission), Gosbank (the State Bank) and the Gossnab (State Commission for Materials and Equipment Supply). Economic planning was conducted through a series of Five-Year Plans. The emphasis was put on a very fast development of heavy industry and the nation became one of the world's top manufacturers of a large number of basic and heavy industrial products, but it lagged behind in the output of light industrial production and consumer durables.
As the Soviet economy grew more complex, it required more and more complex disaggregation of control figures (plan targets) and factory inputs. As it required more communication between the enterprises and the planning ministries, and as the number of enterprises, trusts, and ministries multiplied, the Soviet economy started stagnating. The Soviet economy was increasingly sluggish when it came to responding to change, adapting cost−saving technologies, and providing incentives at all levels to improve growth, productivity and efficiency.
Most information in the Soviet economy flowed from the top down and economic planning was often done based on faulty or outdated information, particularly in sectors with large numbers of consumers. As a result, some goods tended to be under-produced, leading to shortages, while other goods were overproduced and accumulated in storage. Some factories developed a system of barter and either exchanged or shared raw materials and parts, while consumers developed a black market for goods that were particularly sought after but constantly under-produced.
Conceding the weaknesses of their past approaches in solving new problems, the leaders of the late 1980s, headed by Mikhail Gorbachev, were seeking to mould a program of economic reform to galvanise the economy. However, by 1990 the Soviet government had lost control over economic conditions. Government spending increased sharply as an increasing number of unprofitable enterprises required state support and consumer price subsidies to continue operations.
The industrial production system in the Soviet Union suffered a political and economic collapse in 1991, after which two transitions occurred: first from centrally planned to market-based economies, and secondly, from state-ownership to private-ownership of economic enterprises. With the collapse of the Soviet Union, the economic integration of the Soviet republics was dissolved, and overall industrial activity declined substantially. A lasting legacy remains in the physical infrastructure created during decades of combined industrial production practices.
The Australian Labor Party, the first social democratic labour party in the world, was formed in 1891. In 1904, Australians elected the first Labor Party prime minister in the world: Chris Watson. In 1945, the British Labour Party, led by Clement Attlee, was elected to office based upon a radical socialist programme. Social Democratic parties dominated post-war politics in countries such as France, Italy, Czechoslovakia, Belgium and Norway. In Sweden, the Social Democratic Party held power from 1936 to 1976, 1982 to 1991, and 1994 to 2006. At one point, France claimed to be the world's most state-controlled capitalist country. The nationalised public utilities included Charbonnages de France (CDF), Electricité de France (EDF), Gaz de France (GDF), Air France, Banque de France, and Régie Nationale des Usines Renault. Post-World War II social democratic governments introduced social reform and wealth redistribution via state welfare and taxation.
In the UK, the Labour Party was influenced by the British social reformer William Beveridge, who had identified five "Giant Evils" afflicting the working class of the pre-war period: "want" (poverty), disease, "ignorance" (lack of access to education), "squalor" (poor housing), and "idleness" (unemployment). Unemployment benefits, national insurance and state pensions were introduced by the 1945 Labour government. Aneurin Bevan, who had introduced the Labour Party's National Health Service in 1948, criticised the Attlee government for not progressing further, demanding economic planning and criticising the implementation of nationalisation for not empowering the workers with democratic control of operations.
The UK Labour Government nationalised major public utilities such as mines, gas, coal, electricity, rail, iron, steel, and the Bank of England. British Petroleum, privatised in 1987, was officially nationalised in 1951, and there was further government intervention during the 1974–79 Labour Government Anthony Crosland said that in 1956, 25 per cent of British industry was nationalised, and that public employees, including those in nationalised industries, constituted a similar percentage of the country's total employed population. The Labour government, however, did not seek to end capitalism, and the "government had not the smallest intention of bringing in the 'common ownership of the means of production, distribution, and exchange'", Labour re-nationalised steel (1967, British Steel) after the Conservatives denationalised it, and nationalised car production (1976, British Leyland). In 1977, major aircraft companies and shipbuilding were nationalised.
The National Health Service provided taxpayer-funded health care to everyone, free at the point of service. Working-class housing was provided in council housing estates, and university education became available via a school grant system. Ellen Wilkinson, Minister for Education, introduced taxpayer-funded milk in schools, saying, in a 1946 Labour Party conference: "Free milk will be provided in Hoxton and Shoreditch, in Eton and Harrow. What more social equality can you have than that?" Clement Attlee's biographer argued that this policy "contributed enormously to the defeat of childhood illnesses resulting from bad diet. Generations of poor children grew up stronger and healthier, because of this one, small, and inexpensive act of generosity, by the Attlee government".
The Nordic model refers to the economic and social models of the Nordic countries (Denmark, Iceland, Norway, Sweden and Finland). This particular adaptation of the mixed market economy is characterised by more generous welfare states (relative to other developed countries), which are aimed specifically at enhancing individual autonomy, ensuring the universal provision of basic human rights and stabilising the economy. It is distinguished from other welfare states with similar goals by its emphasis on maximising labour force participation, promoting gender equality, egalitarian and extensive benefit levels, large magnitude of redistribution, and liberal use of expansionary fiscal policy. This has included high degrees of labour union membership. In 2008, labour union density was 67.5% in Finland, 67.6% in Denmark, and 68.3% in Sweden. In comparison, union membership was 11.9% in the United States and 7.7% in France. The Nordic Model, however, is not a single model with specific components or rules; each of the Nordic countries has its own economic and social models, sometimes with large differences from its neighbours.
Many social democratic parties, particularly after the Cold war, adopted neoliberal-based market policies that include privatisation, liberalisation, deregulation and financialisation; resulting in the abandonment of pursuing the development of moderate socialism in favour of market liberalism. Despite the name, these pro-capitalist policies are radically different from the many non-capitalist free-market socialist theories that have existed throughout history.
In 1959, the German Social Democratic Party adopted the Godesberg Program, rejecting class struggle and Marxism. In 1980, with the rise of conservative neoliberal politicians such as Ronald Reagan in the U.S., Margaret Thatcher in Britain, and Brian Mulroney in Canada, the Western welfare state was attacked from within. Monetarists and neoliberalism attacked social welfare systems as impediments to private entrepreneurship at public expense.
In the 1980s and 1990s, western European socialists were pressured to reconcile their socialist economic programmes with a free-market-based communal European economy. In the UK, the Labour Party leader Neil Kinnock made a passionate and public attack against the party's Militant Tendency at a Labour Party conference, and repudiated the demands of the defeated striking miners after the 1984–1985 strike against pit closures. In 1989, at Stockholm, the 18th Congress of the Socialist International adopted a new Declaration of Principles, saying:
Democratic socialism is an international movement for freedom, social justice, and solidarity. Its goal is to achieve a peaceful world where these basic values can be enhanced and where each individual can live a meaningful life with the full development of his or her personality and talents, and with the guarantee of human and civil rights in a democratic framework of society.
In the 1990s, released from the Left's pressure, the British Labour Party, under Tony Blair, posited policies based upon the free market economy to deliver public services via private contractors. In 1995, the Labour Party re-defined its stance on socialism by re-wording clause IV of its constitution, effectively rejecting socialism by removing any and all references to public, direct worker or municipal ownership of the means of production. In 1995, the British Labour Party revised its political aims: "The Labour Party is a democratic socialist party. It believes that, by the strength of our common endeavour we achieve more than we achieve alone, so as to create, for each of us, the means to realise our true potential, and, for all of us, a community in which power, wealth, and opportunity are in the hands of the many, not the few."
The objectives of the Party of European Socialists, the European Parliament's socialist bloc, are now "to pursue international aims in respect of the principles on which the European Union is based, namely principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law." As a result, today, the rallying cry of the French Revolution – "Egalité, Liberté, Fraternité" – which overthrew absolutism and ushered industrialisation into French society, are promoted as essential socialist values.
Those who championed socialism in its various Marxist and class struggle forms sought out other arenas than the parties of social democracy at the turn of the 21st century. Anti-capitalism and anti-globalization movements rose to prominence particularly through events such as the opposition to the WTO meeting of 1999 in Seattle. Socialist-inspired groups played an important role in these new movements, which nevertheless embraced much broader layers of the population, and were championed by figures such as Noam Chomsky. The 2003 invasion of Iraq led to a significant anti-war movement in which socialists argued their case.
The Financial crisis of 2007–2010 led to mainstream discussions as to whether "Marx was right". Time magazine ran an article 'Rethinking Marx' and put Karl Marx on the cover of its European edition in a special for the 28 January 2009 Davos meeting. A Globescan BBC poll on the twentieth anniversary of the fall of the Berlin Wall (2009) found that 23% of respondents believe capitalism is "fatally flawed and a different economic system is needed", with that figure rising to over 40% of the population in France; while a majority of respondents including over 50% of Americans believe capitalism "has problems that can be addressed through regulation and reform". Of the 27 countries polled, majorities in 22 of them expressed support for governments to distribute wealth more evenly.
African socialism has been and continues to be a major ideology around the continent. Julius Nyerere was inspired by Fabian socialist ideals. He was a firm believer in rural Africans and their traditions and ujamaa, a system of collectivisation that according to Nyerere was present before European imperialism. Essentially he believed Africans were already socialists. Other African socialists include Jomo Kenyatta, Kenneth Kaunda, and Kwame Nkrumah. Fela Kuti was inspired by socialism and called for a democratic African republic. In South Africa the African National Congress (ANC) abandoned its partial socialist allegiances after taking power, and followed a standard neoliberal route. From 2005 through to 2007, the country was wracked by many thousands of protests from poor communities. One of these gave rise to a mass movement of shack dwellers, Abahlali baseMjondolo that, despite major police suppression, continues to advocate for popular people's planning and against the creation of a market economy in land and housing. Today many African countries have been accused of being exploited under neoliberal economics.
The People's Republic of China, North Korea, Laos and Vietnam are Asian countries remaining from the wave of Marxism-Leninist implemented socialism in the 20th century. States with socialist economies have largely moved away from centralised economic planning in the 21st century, placing a greater emphasis on markets. Forms include the Chinese socialist market economy and the Vietnamese socialist-oriented market economy. They utilise state-owned corporate management models as opposed to modelling socialist enterprise on traditional management styles employed by government agencies.
In the People's Republic of China, the Chinese Communist Party 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 Xiaoping, the leadership of China embarked upon a programme of market-based reform that was more sweeping than had been Soviet leader Mikhail Gorbachev's perestroika program of the late 1980s. Deng's programme, however, maintained state ownership rights over land, state or cooperative ownership of much of the heavy industrial and manufacturing sectors and state influence in the banking and financial sectors.
Elsewhere in Asia, some elected socialist parties and communist parties remain prominent, particularly in India and Nepal. The Communist Party of Nepal in particular calls for multi-party democracy, social equality, and economic prosperity. In Singapore, a majority of the GDP is still generated from the state sector comprising government-linked companies. In Japan, there has been a resurgent interest in the Japanese Communist Party among workers and youth. In Malaysia, the Socialist Party of Malaysia got its first Member of Parliament, Dr. Jeyakumar Devaraj, after the 2008 general election.
In Europe, the socialist Left Party in Germany grew in popularity due to dissatisfaction with the increasingly neoliberal policies of the SPD, becoming the fourth biggest party in parliament in the general election on 27 September 2009. Communist candidate Dimitris Christofias won a crucial presidential runoff in Cyprus, defeating his conservative rival with a majority of 53%. In Greece, in the general election on 4 October 2009, the Panhellenic Socialist Movement (PASOK) won the elections with 43.92% of the votes, the Communist KKE got 7.5% and the new Socialist grouping, (Syriza or "Coalition of the Radical Left"), won 4.6% or 361,000 votes.
In Ireland, in the 2009 European election, Joe Higgins of the Socialist Party took one of three seats in the capital Dublin European constituency. In Denmark, the Socialist People's Party (SF or Socialist Party for short) more than doubled its parliamentary representation to 23 seats from 11, making it the fourth largest party. In 2011, the socialist parties of Social Democrats, Socialist People's Party and the Danish Social Liberal Part formed government, after a slight victory over the liberal parties. They were led by Helle Thorning-Schmidt, and had the Red-Green Alliance as a supporting party.
In the UK, the National Union of Rail, Maritime and Transport Workers put forward a slate of candidates in the 2009 European Parliament elections under the banner of No to the EU – Yes to Democracy, a broad left-wing alter-globalisation coalition involving socialist groups such as the Socialist Party, aiming to offer an alternative to the "anti-foreigner" and pro-business policies of the UK Independence Party. In the following May 2010 UK general election, the Trade Unionist and Socialist Coalition, launched in January 2010 and backed by Bob Crow, the leader of the National Union of Rail, Maritime and Transport Workers union (RMT), other union leaders and the Socialist Party among other socialist groups, stood against Labour in 40 constituencies. The Trade Unionist and Socialist Coalition plans to contest the 2011 elections, having gained the endorsement of the RMT June 2010 conference.
In France, the Revolutionary Communist League (LCR) candidate in the 2007 presidential election, Olivier Besancenot, received 1,498,581 votes, 4.08%, double that of the Communist candidate. The LCR abolished itself in 2009 to initiate a broad anti-capitalist party, the New Anticapitalist Party, whose stated aim is to "build a new socialist, democratic perspective for the twenty-first century".
"Every factory must be a school to educate, like Che Guevara said, to produce not only briquettes, steel, and aluminum, but also, above all, the new man and woman, the new society, the socialist society."
Venezuelan President Hugo Chávez, Nicaraguan President Daniel Ortega, Bolivian President Evo Morales, and Ecuadorian president Rafael Correa refer to their political programmes as socialist. Chávez has adopted the term socialism of the 21st century. After winning re-election in December 2006, Chávez said, "Now more than ever, I am obliged to move Venezuela's path towards socialism."
"Pink tide" is a term being used in contemporary 21st century political analysis in the media and elsewhere to describe the perception that Leftist ideology in general, and Left-wing politics in particular, are increasingly influential in Latin America.
In Canada, the Co-operative Commonwealth Federation, the precursor to the New Democratic Party, had some significant success in provincial politics. In 1944, the Saskatchewan CCF formed the first socialist government in North America. On the federal level, the social democratic New Democratic Party now forms the Official Opposition (Canada) after winning 102/308 seats (up from 37) in the 2011 Canadian federal election.
Socialist parties in the United States reached their zenith in the early 20th century, but currently active parties and organisations include the Socialist Party USA, the Socialist Workers Party and the Democratic Socialists of America, the latter having approximately 10,000 members.
Economic liberals and pro-capitalist libertarians see private property of the means of production and the market exchange as natural entities or moral rights, which are central to their conceptions of freedom and liberty; they thusly perceive public ownership of the means of production, cooperatives and economic planning as infringements upon liberty. Some of the primary criticisms of socialism are distorted or absent price signals, reduced incentives, reduced prosperity, feasibility, and its social and political effects.[self-published source?][unreliable source?]
Critics from the neoclassical school of economics criticise state-ownership and centralisation of capital on the grounds that there is a lack of incentive in state institutions to act on information as efficiently as capitalist firms do because they lack hard budget constraints, resulting in reduced overall economic welfare for society. Economists of the Austrian school argue that socialist systems based on economic planning are unfeasible because they lack the information to perform economic calculation in the first place, due to a lack of price signals and a free price system, which they argue are required for rational economic calculation.
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Upon what point are orthodox political economy and socialism in absolute conflict? Political economy has held and holds that the economic laws governing the production and distribution of wealth which it has established are natural laws ... not in the sense that they are laws naturally determined by the condition of the social organism (which would be correct), but that they are absolute laws, that is to say that they apply to humanity at all times and in all places, and consequently, that they are immutable in their principal points, though they may be subject to modification in details. Scientific socialism holds, the contrary, that the laws established by classical political economy, since the time of Adam Smith, are laws peculiar to the present period in the history of civilized humanity, and that they are, consequently, laws essentially relative to the period of their analysis and discovery.
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