The Pronk Pops Show 1263, May 23, 2019, Story 1: Time for Total Embargo of All Communist China Goods Into The United States — Communist Chinese Spying on United States Businesses and Computer Systems — Long March of People Liberation Army (PLA) Against Chinese People Rebellion — Videos — Story 2: United States blacklisted Huawei Technology Co For Reasons of National Security — Death Penalty For Chinese Spy Companies — Competing Secret Surveillance States — Communist China and United States — Videos

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Story 1: Time for Total Embargo of All Communist China Goods Into The United States — Communist Chinese Spying on United States Computer Systems and Stealing Data– Long March of People Liberation Army (PLA) Against Chinese People Rebellion — Videos —

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Trade war casualties: US businesses in China face retaliation

Xi Jinping calls for ‘New Long March’ amid trade tensions

Here’s a closer look at how China could retaliate during the trade war

Experts debate the effect of the China trade war on the market

This is a full-court press on Chinese behavior, says Michelle Caruso-Cabrera

U.S. Is in Decades-Long Competition With China: Kimmitt

Cramer: China will retaliate against Apple because of the trade war

 What’s next for Huawei after US trade blacklist? | Inside Story

How China will hit back at Trump and save Huawei

China can earn its way out of Trump’s tariffs: Michael Pillsbury

Has China been duping the US for nearly half a century?

Steve Says: Standing up to China

Imports and exports drop for Chinese cargo terminal as US-China trade war tensions rise

Why Trump Will Win the US China Trade War—Stephen Moore

Gingrich: China economy can’t take the battering Trump will deliver

China state-run media targets Trish Regan, calls Bannon ‘true enemy of America’

Steve Bannon: China was not prepared to have Trump in office

Tom Friedman explains why he agrees with Trump’s China trade approach

What Trump’s trade war with China means for American consumers

China Vows to ‘Fight to the Finish’ in Escalating Trade War Against the U.S.

China hits back in trade war by raising tariffs on US goods

Will China admit to IP theft?

Wall Street will get used to US, China trade tensions: Michael Pillsbury

China is on the brink of collapse: Art Laffer

The Realities Of Trump’s Trade War | VICE on HBO

Why are there dozens of ‘ghost cities’ in China?

China Builds Fake Paris, London and Jackson Hole | An Inside Look

What’s going on with China’s economy? – BBC News

China’s economy is in more than a slow patch, Harvard Economics Professor says

 

NKorea says talks won’t resume unless US changes position

today

North Korea said Friday that nuclear negotiations with the United States will never resume unless the Trump administration moves away from what Pyongyang described as unilateral demands for disarmament.

The statement by an unnamed North Korean foreign ministry spokesman published in state media was the country’s latest expression of displeasure over the stalled negotiations as it continues to press Washington to soften its stance on enforcing sanctions against the North’s crippled economy.

It came as President Donald Trump prepares to travel to Japan this weekend for a summit with Prime Minister Shinzo Abe in which the North Korean nuclear issue will likely be high on the agenda.

In the statement carried by Pyongyang’s official Korean Central News Agency, the North Korean spokesman accused the U.S. of deliberately causing February’s collapse of talks between Trump and North Korean leader Kim Jong Un with unilateral and impossible demands.

“We hereby make it clear once again that the United States would not be able to move us even an inch with the device it is now weighing in its mind, and the further its mistrust and hostile acts toward the DPRK grow, the fiercer our reaction will be,” the statement said, referring to North Korea’s formal name, the Democratic People’s Republic of Korea.

“Unless the United States puts aside the current method of calculation and comes forward with a new method of calculation, the DPRK-U.S. dialogue will never be resumed and by extension, the prospect for resolving the nuclear issue will be much gloomy,” the statement added.

The U.S. has said the Trump-Kim talks broke down because of North Korean demands for sanctions relief in exchange for a partial surrender of its nuclear capabilities. Kim has since declared that the Trump administration has until the end of the year to come up with mutually acceptable terms for a deal.

Friday’s statement follows two separate launches of short-range missiles earlier this month, which ended a pause in North Korea’s ballistic missile launches that began in late 2017 and was seen as measured brinkmanship aimed at increasing pressure on Washington without actually causing the negotiations to collapse. The North has also strongly protested the recent U.S. seizure of a North Korean cargo ship that had been involved in banned coal exports and demanded the vessel to be immediately returned.

Following the collapse of the Trump-Kim summit, North Korea also significantly slowed the pace of its engagement with South Korea, which has been eager to improve bilateral relations and help revive discussions between Washington and Pyongyang.

South Korea earlier this week vowed to push ahead with plans to resume large-scale humanitarian aid to the North. But it’s unclear whether any aid package from South Korea would influence the behavior of North Korea, which has been demanding much bigger concessions from Seoul, such as the resumption of inter-Korean economic projects currently blocked by U.S.-led sanctions against Pyongyang.

https://apnews.com/c20ba627fe4c4c38a45246e4df5ffb8a

China says trade talks can’t continue unless US addresses its ‘wrong actions’

Evelyn Cheng
  • President Trump announced earlier this month that tariffs on $200 billion worth of Chinese goods would increase to 25% from 10% on May 10.
  • In the last two weeks, his administration also put Chinese telecom giant Huawei on a blacklist that prevents it from buying from American companies without U.S. government permission.
  • Nearly three-fourths of respondents to a joint survey by the American Chambers of Commerce in Shanghai and Beijing said the latest round of U.S. tariffs and planned counter-tariffs from China are negatively affecting their businesses.

The latest U.S. actions on trade are preventing negotiations with Beijing from proceeding, China’s Commerce Ministry said Thursday.

“If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue,” Ministry of Commerce spokesperson Gao Feng said Thursday in Mandarin, according to a CNBC translation.

He did not mention any U.S. actions specifically, but it’s been a tense couple of weeks between the world’s two-largest economies. President Donald Trump unexpectedly accused China of reneging on a deal earlier this month and announced that tariffs on $200 billion worth of Chinese goods would increase to 25% from 10% on May 10. Beijing retaliated with raising levies on $60 billion worth of U.S. products. In the last two weeks, his administration also put Chinese telecom giant Huawei on a blacklist that prevents it from buying from American companies without U.S. government permission.

Google said Sunday it would cut ties with Huawei in order to comply with the order. But after the U.S. temporarily eased some restrictions on trade for the telecom and smartphone company, Google said Tuesday it plans to work with Huawei over the next 90 days.

“The U.S. … crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain,” Gao said. “China is firmly opposed to this. We will closely monitor developments and make adequate preparations.”

U.S Treasury Secretary Steven Mnuchin told CNBC’s Ylan Mui on Wednesdaythat a trip to Beijing has not been planned. Trump has said he plans to meet Chinese President Xi Jinping in late June at the G-20 meeting in Japan.

When asked Thursday whether Xi would meet Trump then, Gao referred reporters to the Ministry of Foreign Affairs.

Nearly three-fourths of respondents to a joint survey by the American Chambers of Commerce in Shanghai and Beijing said the latest round of U.S. tariffs and planned counter-tariffs from China are negatively affecting their businesses. Some respondents also noted increased scrutiny by customs authorities and other bureaucratic challenges.

Gao said Thursday that all foreign companies in China will be protected by the Chinese government. Regarding the issues some foreign companies raised, he said that China is working to address them and improve the business environment.

https://www.cnbc.com/2019/05/23/china-says-trade-talks-cant-continue-unless-us-addresses-its-wrong-actions.html

Made in China 2025

From Wikipedia, the free encyclopedia

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Made in China 2025 (Chinese中国制造2025pinyinZhōngguó zhìzào èrlíng’èrwǔ)[1] is a strategic plan of China issued by Chinese Premier Li Keqiang and his cabinet in May 2015.[2] With it, China aims to move away from being the world’s “factory” (producing cheap, low quality goods due to lower labour costs) and move to producing higher value products and services.[3] It is in essence a blueprint to upgrade the manufacturing capabilities of Chinese industries.[4]

Contents

Goals

The goals of Made in China 2025 include increasing the Chinese-domestic content of core materials to 40 percent by 2020 and 70 percent by 2025.[5] The plan focuses on high-tech fields including the pharmaceutical industryautomotive industryaerospace industrysemiconductorsIT and robotics etc, which are presently the purview of foreign companies.[6]

Reception

The Center for Strategic and International Studies describes it as an “initiative to comprehensively upgrade Chinese industry” directly inspired by the German Industry 4.0.[1] It is an attempt to move the country’s manufacturing up the value chain[7] and become a major manufacturing power in direct competition with the United States.[8][9] The Chinese government is committed to roughly investing $300 billion US dollars to achieve this plan.[3]

Background

China is facing a multitude of internal issues such as slower economic growth, higher wages, increased costs of an aging population, a shrinking workforce, wealth inequality, an underdeveloped social welfare system,[10] and environmental degradation.[11] It is also competing in the manufacturing space from newly emerging economies like Vietnam and highly industrialized countries.[3][11] In order to maintain economic growth, standards of living and meet its demand for its increasingly educated workforce, it needs to lift the game on its economic and technological competitiveness.[11] Alan Wheatley from British Think Tank Chatham House indicated a broad and growing middle class is necessary for economic and political stability.[12]

Key industries

The plan lists 10 key industries on which Chinese government focused to become a world leader.[13]

Key Industries of the Made in China 2025
Industry sector Description
Information Technology AI, IoT, smart appliances
Robotics AI, machine learning
Green energy and green vehicles energy efficiency, electric vehicles
Aerospace equipment
Ocean engineering and high tech ships
Railway equipment
Power equipment
New materials
Medicine and medical devices
Agriculture machinery

Premier Li has indicated advanced standards in industries are absolutely essential to foster innovation and eliminate bottlenecks in industrial development.[14] China has a growing middle class who are demanding higher quality goods and services.[14] Compared with overseas competition, the quality and innovation of Chinese goods have not caught up.[14] Premier Li talks about the quality revolution.[14] This revolves around entrepreneurship and craftsmanship.[14] It will involve embracing a culture of continuous innovations and refinement in quality of goods produced.[14]

Reactions

The United States think tank Council on Foreign Relations stated in 2018 that it is a “real existential threat to U.S. technological leadership“.[15] The Li Keqiang Government maintains that the plan is in line with the country’s World Trade Organization obligations.[16] On 15 June 2018, the Trump administration imposed higher tariffs on Chinese goods, escalating the trade tensions between China and the U.S. The tariff list mainly focuses on products included in the Made In China 2025 plan, including IT and robotics related products.[17]

It has been suggested that some aspects of the policy may violate World Trade Organization rules, such as the self-sufficiency quotas for several high-tech components.[3]

See also

Literature

  • Boris Lee (2019). Assessing Made in China 2025: The US – China Trade War and Ways Going Forward. Claremont Colleges Library.
  • Edward Alden, Nicholas Burns, Ash Carter, Jack Clark (2019). Technology and National Security: Maintaining America’s Edge. The Aspen Institute. ISBN978-0578427959.

References

  1. Jump up to:ab Made in China 2025. CSIS, June 1, 2015.
  2. ^ “Made in China 2025” plan unveiled to boost manufacturingChina News Service, May 2015.
  3. Jump up to:abcd Fang, Jason; Walsh, Michael (2018-04-29). “What is Made in China 2025 and why is the world concerned about it?”ABC News. Retrieved 2019-01-10.
  4. ^ “China to invest big in ‘Made in China 2025’ strategy”english.gov.cn. Retrieved 2019-01-10.
  5. ^ Foreign Firms Wary Of ‘Made In China 2025,’ But It May Be China’s Best Chance At Innovationforbes.com Sara Hsu, March 10, 2017.
  6. ^ China Prepares for Big Pharma. Zachary Torrey, thediplomat.com, March 2018.
  7. ^ Made In China 2025: A New Era For Chinese ManufacturingCKGSB, September 2, 2015
  8. ^ “What is ‘Made in China 2025’ — and why is it a threat to Trump’s trade goals?”.
  9. ^ “YouTube”http://www.youtube.com. Retrieved 12 May 2019.
  10. ^ “The question mark hanging over China’s middle class”South China Morning Post. 2018-10-12. Retrieved 2019-01-10.
  11. Jump up to:abc “Made in China 2025 and US–China power competition”http://www.lowyinstitute.org. Retrieved 2019-01-10.
  12. ^ “The question mark hanging over China’s middle class”South China Morning Post. 2018-10-12. Retrieved 2019-01-10.
  13. ^ China, McKinsey (2015-05-27). “China Is Betting Big on These 10 Industries”McKinsey Greater China. Retrieved 2019-01-10.
  14. Jump up to:abcdef “Quality revolution needed for ‘Made in Chinaenglish.gov.cn. Retrieved 2019-01-11.
  15. ^ Why Does Everyone Hate Made in China 2025? CFR, March 28, 2018
  16. ^ China says “Made in China 2025” in line with WTO rulesXinhua, 2018-04-04, Zhou Xin
  17. ^ U.S. and China Expand Trade War as Beijing Matches Trump’s TariffsNY Times, 15 June 2018

External links

https://en.wikipedia.org/wiki/Made_in_China_2025

Story 2: United States blacklisted Huawei Technology Co For Reasons of National Security — Death Penalty For Chinese Spy Companies —  Communist China and United States — Huawei vs. AT&T, Verizon,  Sprint, T-Mobile US, Noika,

  — Competing Secret Surveillance States — Videos

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Why The US Thinks Huawei Is A National Security Threat

What’s behind Chinese telecom Huawei’s espionage allegations?

Interview With Ren Zhengfei, Founder And CEO Of Chinese Telecom Giant Huawei | TIME

Huawei founder: “5G is not an atomic bomb”

5G Technology: The Battleground for Wireless Dominance

US and China Fight for Supremacy in 5G Technology

Why nations are concerned over Chinese tech giant Huawei

Huawei Offers to Sign ‘No-Spy’ Agreements

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Huawei and U.S. in War of Words Over Network Security

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Sen. Cruz Discusses 5G Nationalization and Other Topics with Internet and Technology Leaders

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Beijing vows to support its companies’ rights and hints at legal action after Google blocked Huawei from using its phone apps in China-U.S. trade war

  • Beijing says it supports its firms to protect themselves with ‘the weapon of law’  
  • Comes after Huawei was blocked from using Google software on its phones  
  • New bans means Huawei’s handsets will not work with Android in the future  
  • It’s the latest restriction Trump administration put on Huawei in the trade war  
  • Huawei has already been banned from buying parts from U.S. firms in trade war
  • The firm’s CFO Meng was arrested in Canada under a U.S. warrant in December 

China has vowed to protect its companies’ ‘legitimate rights’ after Huawei was blocked from using Google software on its phones during a tariff war between Beijing and Washington.

China’s Ministry of Foreign Affairs has also hinted at legal action as the ban from the U.S. technology company is set to deal a huge blow to the Chinese telecom giant.

Google’s move comes after President Trump banned Huawei from U.S. networks, and the firm said today it was taking ‘steps to comply with recent government actions’.

Chinese smartphone maker Huawei has been blocked by Google from receiving updates for the Android operating system during a trade war between Beijing and Washington

Chinese smartphone maker Huawei has been blocked by Google from receiving updates for the Android operating system during a trade war between Beijing and Washington

Huawei has been the centre of an ongoing political row as well as an escalating trade war since its CFO Meng Wanzhou was arrested in Vancouver under the request of the U.S. last December.

The Trump administration also claimed Huawei’s gear could be used by China to spy on Americans – allegations Huawei has repeatedly denied. 

Last week, U.S. President Trump signed an executive order declaring a national emergency and barring U.S. companies from using telecommunications equipment made by firms posing a national security risk.

Washington has also banned Huawei and its 68 affiliates from buying parts and components from American companies without special approval.

The Chinese company beat Apple to become the world’s second largest smartphone maker after South Korea’s Samsung last August. 

Beijing says it supports Chinese companies to safeguard their proper rights through 'the weapon of law' after Huawei was blocked from using Google software on its phones

Beijing says it supports Chinese companies to safeguard their proper rights through ‘the weapon of law’ after Huawei was blocked from using Google software on its phones

The Chinese firm will have to resort to the Android Open Source Project, a version of the operating system which does not include Google apps, on its new phones

The move from Google deals a major blow to the expansion of Huawei and is likely to cripple its expansion. The Chinese firm will have to resort to the Android Open Source Project, a version of the operating system which does not include Google apps, on its new phones

The latest restriction from Google means new Huawei-made phones will not have access to apps such as Gmail, Google Maps and the Google Play store.

Existing phones will still have the apps, but users will not be able to upgrade to newer versions of the Android operating system.

Huawei can still use Android’s open-source alternative but it will not include Google’s own-brand apps such as YouTube and Chrome.

At a press briefing today, Lu Kang, a spokesperson of China’s Ministry of Foreign Affairs, said the Ministry had noticed the related reports about Google suspending part of its services to Huawei.

Lu said the Ministry would confirm the claims and keep paying attention to the development of the matter.

He said Beijing supports Chinese companies to safeguard their proper rights using ‘the weapon of law’.

Lu Kang, a spokesperson of China's Ministry of Foreign Affairs, said today that Beijing supports Chinese companies to safeguard their proper rights using 'the weapon of law'

Lu Kang, a spokesperson of China’s Ministry of Foreign Affairs, said today that Beijing supports Chinese companies to safeguard their proper rights using ‘the weapon of law’

A Huawei spokesperson said today: ‘We have made substantial contributions to the development and growth of Android around the world. 

‘Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.’

He added: ‘We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally’

Google is said to have cut off Huawei´s licence, meaning many customers will not be able to use Google apps

Google is said to have cut off Huawei´s licence, meaning many customers will not be able to use Google apps. The decision comes as the trade war before China and the U.S. is intensified

What does this mean for my Huawei phone?

If you currently have a Huawei phone, you will still be able to use Google apps such as Gmail and Maps.

You can also still download app updates.

However, you will not be able to update to a newer version of the Android operating system if one becomes available.

If you buy a newly manufactured Huawei phone it will not have access to Google’s own apps.

Huawei can still use a version of the Android operating system available through an open source license.  

But popular apps such as YouTube and the Chrome browser require a commercial agreement with Google.

The move from Google deals a major blow to the expansion of Huawei and is likely to cripple its expansion.

The Chinese firm will have to resort to the Android Open Source Project, a version of the operating system which does not include Google apps, on its new phones.

It is the latest flashpoint in an increasingly bitter trade war between Beijing and Washington, after the Trump administration added Huawei Technologies Co Ltd to a trade blacklist last week.

The measure requires Huawei to obtain U.S. government approval on purchases of American technology. 

Trump’s executive order also allows the government to ban the technology and services of ‘foreign adversaries’ deemed to pose ‘unacceptable risks’ to national security. 

Last August Trump signed a bill that barred the US government from using equipment from Huawei and China’s ZTE Corp.

The firm’s lawyers are still studying the effect of Trump’s intervention, a company spokesman said on Friday.

Huawei is the world’s biggest supplier of network gear used by phone and internet companies, and is now Europe’s third-largest smartphone maker behind Samsung and Apple. 

One Huawei executive, chief financial officer Meng Wanzhou (pictured earlier this month), was arrested in Canada last year and faces criminal charges in the United States

Huawei promoters display one of the company's phones at a product launch in Singapore. U.S. and European officials fear the technology could be used for Chinese spying

But it has been seen by officials in Washington as a front for spying by the Chinese military or security services.

The U.S. worries that China could use Huawei to gain access to private, commercial or other information that could compromise Nato and allied intelligence operations.

Huawei denies involvement in Chinese spying and last week unveiled its first 5G-ready smartphone despite the ongoing row.

One Huawei executive, chief financial officer Meng Wanzhou, was arrested in Canada last year and faces criminal charges in the United States.

Beijing detained former Canadian diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor on December 10 in an apparent attempt to pressure Canada to release Meng.

The state news agency that the pair had acted together to steal state secrets.

A Chinese court also sentenced a Canadian to death in a sudden retrial, overturning a 15-year prison term handed down earlier.

Android issued a tweet from their official account stating 'services like like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device'

Android issued a tweet from their official account stating ‘services like like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device’

Google's move comes after President Trump (pictured) banned Huawei from U.S. networks, and the firm said today it was taking 'steps to comply with recent government actions'

Google’s move comes after President Trump (pictured) banned Huawei from U.S. networks, and the firm said today it was taking ‘steps to comply with recent government actions’

U.S. charges against Huawei allege that the company stole trade secrets, misled banks about its business and violated U.S. sanctions.

As well as its smartphone business, Huawei is a market leader in equipment needed to build next-generation 5G mobile data networks.

In Europe, the UK has been embroiled in a row over Huawei’s possible role building such a network.

5G is expected to begin rolling out this year and will offer mobile internet speeds likely to be at least several times that of 4G, it has been claimed.

Last month it was claimed that Prime Minister Theresa May had given the green light to Huawei’s involvement at a meeting of the UK’s National Security Council.

The claims led to the sacking of defense minister Gavin Williamson, who was accused of leaking details of the meeting, although he denied it.

The U.S. worries that China could use Huawei phones (stock photo) to gain access to information that could compromise Nato and allied intelligence operations

Retired brigadier general Robert Spalding, the former senior director for strategy at the National Security Council, wrote in the Daily Telegraph that the UK ‘must recognise’ the strength of U.S. feeling on Huawei.

He wrote: ‘Other nations must not make the mistake of thinking President Trump’s recent executive order banning companies like Huawei from US networks is merely an afterthought of the trade war.

‘The severity of President Trump’s declaration underscores just how seriously the US views this issue, and the UK must recognise this strength of feeling.

‘To miss the significance of his actions would be a grave misjudgment of how seriously we take our security in an ever-more dangerous world.’

In April, the technical director of the UK’s National Cyber Security Centre said some of the firm’s products had ‘shoddy’ security.

Dr Ian Levy warned that Huawei’s ‘poor’ engineering was ‘like it’s back in the year 2000’.

WHY DO BRITISH INTELLIGENCE THINK HUAWEI’S PRODUCTS MAY POSE A SECURITY THREAT?

China’s controversial telecommunications equipment maker Huawei openly supports the ruling Communist Party.

Ren Zhengfei, a former People’s Liberation Army (PLA) engineer, founded the company in 1987 and it has risen to rank among the world’s top manufacturers of network equipment.

But his PLA service has led to concerns of close links with the Chinese military and government, which Huawei has consistently denied.

Ren Zhengfei, a former People's Liberation Army (PLA) engineer, founded the company in 1987 and it has risen to rank among the world's top manufacturers of network equipment. But his PLA service has led to concerns of close links with the Chinese military and government, which Huawei has consistently denied

Ren Zhengfei, a former People’s Liberation Army (PLA) engineer, founded the company in 1987 and it has risen to rank among the world’s top manufacturers of network equipment. But his PLA service has led to concerns of close links with the Chinese military and government, which Huawei has consistently denied

Huawei operates in 170 countries and the company says one third of the world’s population communicate using its products in some way.

It is the world’s second largest network equipment supplier behind Sweden’s Ericsson, and has made a large push into consumer products such smartphones in recent years.

Fears around its capabilities to tap into sensitive information stem from rumours of backdoors in in the firm’s software.

Although no such vulnerability has ever been found, allegations for their capabilities range from the ability to tap into encrypted data  to knocking out communications facilities.

The UK’s National Cyber Security Centre, which is part of GCHQ, has not claimed to find evidence of such vulnerabilities.

However, intelligence experts say they can only provide limited assurances that the Chinese company is not a risk to broadband and phone networks in the UK.

Global growth worries slam Wall St. as trade tensions persist

NEW YORK (Reuters) – U.S. stocks slumped on Thursday as investors dumped shares of technology companies as well as businesses in cyclical sectors on fears that the escalating trade war between United States and China would stymie global economic growth.

Further fueling trade fears among investors, Beijing said that Washington needs to correct its “wrong actions” for trade talks to continue after the United States blacklisted Huawei Technology Co Ltd last week.

Among the S&P 500’s major sectors, only utilities and real estate, both considered defensive areas, registered gains as investors moved to safe-haven assets such as Treasuries

A 5% plunge in oil prices in response to a dampened outlook for demand impeded energy shares, while a drop in 10-year Treasury yields, which hit their lowest level since December 2019, held back financial shares.

“We’re going to see a drift lower until there’s a resolution of what’s happening with China,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. “If you’re trading, it’s not a bad idea to put yourself on the sidelines and sit it out.”

 

“Investors realize that coming to a deal is going to be more challenging and that is really harmful to the economic environment,” said Luke Tilley, chief economist at Wilmington Trust in Wilmington, Delaware, who described the day’s trading as “a classic risk-off movement.”

The Dow Jones Industrial Average fell 418.29 points, or 1.62%, to 25,358.32, the S&P 500 lost 47.77 points, or 1.67%, to 2,808.5 and the Nasdaq Composite dropped 157.90 points, or 2.04%, to 7,592.94.

Stocks have succumbed to selling pressure in May after Washington and Beijing engaged in tit-for-tat tariffs and other retaliatory measures, with the S&P 500 on track to post its first monthly decline since the December sell-off.

Slideshow (9 Images)

Shares of NetApp Inc tumbled 9.0%, the second-biggest percentage drop on the S&P 500, after the data storage equipment maker forecast current-quarter profit and revenue below Wall Street estimates.

L Brands Inc shares jumped 11.8% after the owner of Victoria’s Secret and Bath & Body Works reported better-than-expected quarterly earnings.

Declining issues outnumbered advancing ones on the NYSE by a 4.24-to-1 ratio; on Nasdaq, a 4.64-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and 27 new lows; the Nasdaq Composite recorded 19 new highs and 177 new lows.

Reporting by April Joyner; Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski

https://www.reuters.com/article/us-usa-stocks/wall-street-slides-on-fears-of-likely-us-china-tech-cold-war-idUSKCN1ST1AZ

U.S. blacklisting of Huawei prompts European firms to follow suit

May 22 at 6:23 PM

Chinese telecom giant Huawei faced new threats to its business Wednesday as some European firms followed the U.S. tech industry in suspending dealings with the company.

Two British telecom companies, Vodafone and a unit of BT Group, said they would suspend plans to include Huawei telephones in their upcoming high-speed 5G networks. And in a potentially more consequential blow, U.K. chip designer Arm Holdings, an important supplier to Huawei, said it was “complying with the latest restrictions set forth by the U.S. government.”

Vodafone UK

@VodafoneUK

We continue to monitor statements from Google. They’re currently advising that services like Google Play and security from Google Play Protect will keep functioning on your existing phone. https://forum.vodafone.co.uk

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This is Vodafone UK’s online community. Join to get support and advice about products and services, engage in discussion about the latest products and share your knowledge. Register today!

forum.vodafone.co.uk

Vodafone UK

@VodafoneUK

We are pausing pre-orders for the Huawei Mate 20X (5G) in the UK. This is a temporary measure while uncertainty exists regarding new Huawei 5G devices. We will keep this situation under review.https://vodafone.uk/2Elt1RJ

Huawei – 20/05/2019

In response to today’s Huawei news – we’re waiting for a statement from Google. From what we’ve heard so far, everything should work as normal and there’s no need to take any action at this stage….

forum.vodafone.co.uk

The Trump Administration last week ordered companies to stop selling U.S. technology to Huawei, calling the company a potential security threat that could use its telecom equipment to spy on other countries. That prompted Google and other U.S. firms to begin suspending dealings with Huawei, and is now creating knock-on effects for even non-U. S. companies.

Huawei has vigorously denied the spying claims, and the Trump administration allegation that the Chinese government exerts unhealthy influence on Huawei. With about $105 billion in global sales last year, Huawei is the world’s second largest seller of cellphones, and the largest seller of equipment used to build 5G, or 5th generation, wireless networks.

“We value our close relations with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions,” Huawei said in a statement Wednesday. “We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world.”

The conflict is putting companies and governments around the world in a tough spot, forcing them to choose between alienating the United States or China.

Arm Holdings issued its statement after the BBC reported the firm had told staff to suspend dealings with Huawei.

An Arm spokesman said some of the company’s intellectual property is designed in the United States and is therefore “subject to U.S. export controls.”

Losing Arm as a supplier would be a major blow, as it would “cripple key Huawei chips,” said Dave Burstein, a telecom analyst at STL Partners and publisher of Huawei Report. Burstein discloses two conflicts of interest on his site, saying Huawei has paid his expenses to attend conferences and provided contracting work to STL Partners.

BT Group’s EE division, which is preparing to launch 5G service in six British cities later this month, said Wednesday it would no longer offer a new Huawei smartphone as part of that service. Vodafone also said it would drop a Huawei smartphone from its lineup. Both companies appeared to tie that decision to Google ‘s move to withhold licenses for its Android operating software from future Huawei phones.

Europe is far from abandoning Huawei, however. Despite relentless pressure from the Trump administration, European governments have declined to issue outright bans on Huawei equipment as they erect the cellphone towers and other parts needed for 5G networks.

In both Britain and Germany — traditionally two of Washington’s closest European allies — officials have said they are setting high security standards and are well aware of the potential pitfalls of using the Chinese company to supply vital digital infrastructure.

“The companies that supply 5G will have huge power in their hands. And we know that Huawei is a de facto state company of China,” said Jürgen Hardt, foreign policy spokesman for Germany’s governing Christian Democratic Union. “I don’t think anyone is unaware of the risks. This isn’t like buying and selling chewing gum.”

5G

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5G
5th generation mobile network (5G) logo.jpg

3GPP’s 5G logo
Introduced April 2019

5G is generally seen as the fifth generation cellular network technology that provides broadband access. The industry association 3GPP defines any system using “5G NR” (5G New Radio) software as “5G”, a definition that came into general use by late 2018. Others may reserve the term for systems that meet the requirements of the ITU IMT-2020, which represents more nations. 3GPP will submit their 5G NR to the ITU. [1] It follows 2G3G and 4G and their respective associated technologies (such as GSMUMTSLTELTE Advanced Pro, etc.).

The first fairly substantial deployments were in April 2019. In South Korea, SK Telecom claimed 38,000 base stations, KT Corporation 30,000 and LG U Plus 18,000; of which 85% are in six major cities.[2] They are using 3.5 GHz (sub-6) spectrum in non-standalone (NSA) mode and tested speeds were from 193 to 430 Mbit/s down.[3] 260,000 signed up in the first month and the goal is 10% of phones on 5G by the end of 2019.[4]

Verizon opened service on a very limited number of base stations in the US cities of Chicago and Minneapolis using 400 MHz of 28 GHz millimeter wave spectrum in NSA mode. Download speeds in Chicago were from 80 to 900 Mbit/s. Upload speeds were from 12 to 57 Mbit/s. The round-trip delay time was 25 milliseconds.[5] It was reported in May 2019 that Verizon’s 5G service would regularly hit 1 Gbit/s in some locations. [6][7]

Five companies sell 5G radio hardware and 5G systems for carriers: HuaweiZTENokiaSamsung, and Ericsson.[8][9][10][11][12][13]

Contents

Overview

5G networks are digital cellular networks, in which the service area covered by providers is divided into a mosaic of small geographical areas called cellsAnalog signals representing sounds and images are digitized in the phone, converted by an analog to digital converter and transmitted as a stream of bits. All the 5G wireless devices in a cell communicate by radio waves with a local antenna array and low power automated transceiver(transmitter and receiver) in the cell, over frequency channels assigned by the transceiver from a common pool of frequencies, which are reused in geographically separated cells. The local antennas are connected with the telephone network and the Internet by a high bandwidth optical fiber or wireless backhaul connection. Like existing cellphones, when a user crosses from one cell to another, their mobile device is automatically “handed off” seamlessly to the antenna in the new cell.

There are plans to use millimeter waves for 5G.[14] Millimeter waves have shorter range than microwaves, therefore the cells are limited to smaller size; The waves also have trouble passing through building walls.[15] Millimeter wave antennas are smaller than the large antennas used in previous cellular networks. They are only a few inches (several centimeters) long. Another technique used for increasing the data rate is massive MIMO (multiple-input multiple-output).[15] Each cell will have multiple antennas communicating with the wireless device, received by multiple antennas in the device, thus multiple bitstreams of data will be transmitted simultaneously, in parallel. In a technique called beamforming the base station computer will continuously calculate the best route for radio waves to reach each wireless device, and will organize multiple antennas to work together as phased arrays to create beams of millimeter waves to reach the device.[15][16]

The new 5G wireless devices also have 4G LTE capability, as the new networks use 4G for initially establishing the connection with the cell, as well as in locations where 5G access is not available.[17]

5G can support up to a million devices per square kilometer, while 4G supports only 4000 devices per square kilometer.[18]

Usage scenario

The ITU-R has defined three main uses for 5G. They are Enhanced Mobile Broadband (eMBB), Ultra Reliable Low Latency Communications (URLLC), and Massive Machine Type Communications (mMTC).[19] Enhanced Mobile Broadband (eMBB) uses 5G as a progression from 4G LTE mobile broadband services, with faster connections, higher throughput, and more capacity. Ultra-Reliable Low-Latency Communications (URLLC) refer to using the network for mission critical applications that requires uninterrupted and robust data exchange. Massive Machine-Type Communications (mMTC) would be used to connect to a large number of low power, low cost devices, which have high scalability and increased battery lifetime, in a wide area. Neither URLLC nor mMTC are expected to be deployed widely before 2021.

Performance

Speed

5G NR speed in sub-6 GHz bands can be slightly higher than the 4G with a similar amount of spectrum and antennas,[20][21] though some 3GPP 5G networks will be slower than some advanced 4G networks, such as T-Mobile’s LTE/LAA network, which achieves 500+ Mbit/s in Manhattan.[22] The 5G specification allows LAA (License Assisted Access) as well but LAA in 5G has not yet been demonstrated. Adding LAA to an existing 4G configuration can add hundreds of megabits per second to the speed, but this is an extension of 4G, not a new part of the 5G standard.[22]

Speeds in the less common millimeter wave spectrum can be substantially higher.

Latency

In 5G, the “air latency” target is 1-4 milliseconds, although the equipment shipping in 2019 has tested air latency of 8-12 milliseconds.[23][24] The latency to the server must be added to the “air latency.” Verizon reports the latency on its 5G early deployment is 30 ms.[25]

Standards

Initially, the term was associated with the International Telecommunication Union‘s IMT-2020 standard, which required a theoretical peak download capacity of 20 gigabits, along with other requirements.[26] Then, the industry standards group 3GPP chose the 5G NR (New Radio) standard together with LTE as their proposal for submission to the IMT-2020 standard.[27][28]

The first phase of 3GPP 5G specifications in Release-15 is scheduled to complete in 2019. The second phase in Release-16 is due to be completed in 2020.[29]

5G NR can include lower frequencies (FR1), below 6 GHz, and higher frequencies (FR2), above 24 GHz. However, the speed and latency in early FR1 deployments, using 5G NR software on 4G hardware (non-standalone), are only slightly better than new 4G systems, estimated at 15 to 50% better.[30][31][32]

IEEE covers several areas of 5G with a core focus in wireline sections between the Remote Radio Head (RRH) and Base Band Unit (BBU). The 1914.1 standards focus on network architecture and dividing the connection between the RRU and BBU into two key sections. Radio Unit (RU) to the Distributor Unit (DU) being the NGFI-I (Next Generation Fronthaul Interface) and the DU to the Central Unit (CU) being the NGFI-II interface allowing a more diverse and cost-effective network. NGFI-I and NGFI-II have defined performance values which should be compiled to ensure different traffic types defined by the ITU are capable of being carried. 1914.3 standard is creating a new Ethernet frame format capable of carrying IQ data in a much more efficient way depending on the functional split utilized. This is based on the 3GPP definition of functional splits. Multiple network synchronization standards within the IEEE groups are being updated to ensure network timing accuracy at the RU is maintained to a level required for the traffic carried over it.

5G NR

5G NR (New Radio) is a new air interface developed for the 5G network.[33] It is supposed to be the global standard for the air interface of 3GPP 5G networks.[34]

Pre-standard implementations

  • 5GTF: The 5G network implemented by American carrier Verizon for Fixed Wireless Access in late 2010s uses a pre-standard specification known as 5GTF (Verizon 5G Technical Forum). The 5G service provided to customers in this standard is incompatible with 5G NR. There are plans to upgrade 5GTF to 5G NR “Once [it] meets our strict specifications for our customers,” according to Verizon.[35]
  • 5G-SIG: Pre-standard specification of 5G developed by KT Corporation. Deployed at Pyeongchang 2018 Winter Olympics.[36]

Internet of Things

In the Internet of Things (IoT), 3GPP is going to submit evolution of NB-IoT and eMTC(LTE-M) as the 5G technology for the LPWA (Low Power Wide Area) use case.[37]

Deployment

Beyond mobile operator networks, 5G is also expected to be widely utilized for private networks with applications in industrial IoT, enterprise networking, and critical communications.

Initial 5G NR launches will depend on existing LTE (4G) infrastructure in non-standalone (NSA) mode (5G NR software on LTE radio hardware), before maturation of the standalone (SA) mode (5G NR software on 5G NR radio hardware) with the 5G core network.

The Samsung Galaxy S10 5G, the first commercially available smartphone able to connect to a 5G network.[38][39][40]

As of April 2019, the Global Mobile Suppliers Association had identified 224 operators in 88 countries that are actively investing in 5G (i.e. that have demonstrated, are testing or trialling, or have been licensed to conduct field trials of 5G technologies, are deploying 5G networks or have announced service launches).[41] The equivalent numbers in November 2018 were 192 operators in 81 countries.[42] The first country to adopt 5G on a large scale was South Korea, in April 2019.

When South Korea launched its 5G network, all carriers used Samsung, Ericsson and Nokia base stations and equipment, except for LG U Plus, who also used Huawei equipment.[43][44] Samsung was the largest supplier for 5G base stations in South Korea at launch, having shipped 53,000 base stations at the time, out of 86,000 base stations installed across the country at the time.[45]

Spectrum

Large quantities of new spectrum (5G NR frequency bands) have been allocated to 5G[46] in order to support its increased throughput requirements. For example, in July 2016, the Federal Communications Commission (FCC) of the United States freed up vast amounts of bandwidth in underused high-band spectrum for 5G. The Spectrum Frontiers Proposal (SFP) doubled the amount of millimeter-wave unlicensed spectrum to 14 GHz and created four times the amount of flexible, mobile-use spectrum the FCC had licensed to date.[47] In March 2018, European Union lawmakers agreed to open up the 3.6 and 26 GHz bands by 2020.[48]

As of March 2019, there are reportedly 52 countries, territories, special administrative regions, disputed territories and dependencies that are formally considering introducing certain spectrum bands for terrestrial 5G services, are holding consultations regarding suitable spectrum allocations for 5G, have reserved spectrum for 5G, have announced plans to auction frequencies or have already allocated spectrum for 5G use.[49]

5G devices

In March 2019, the Global Mobile Suppliers Association released the industry’s first database tracking worldwide 5G device launches.[50] In it, the GSA identified 23 vendors who have confirmed the availability of forthcoming 5G devices with 33 different devices including regional variants. There were seven announced 5G device form factors: (phones (x12 devices), hotspots (x4), indoor and outdoor customer-premises equipment (x8), modules (x5), Snap-On dongles and adapters (x2), and USB terminals (x1).[51]

In the 5G IoT chipset arena, as of April 2019 there were four commercial 5G modem chipsets and one commercial processor/platform, with more launched expected in the near future.[52]

Technology

New radio frequencies

The air interface defined by 3GPP for 5G is known as New Radio (NR), and the specification is subdivided into two frequency bands, FR1 (below 6 GHz) and FR2 (mmWave),[53] each with different capabilities.

Frequency range 1 (< 6 GHz)

The maximum channel bandwidth defined for FR1 is 100 MHz, due to the scarcity of continuous spectrum in this crowded frequency range. The band most widely being used for 5G in this range is around 3.5 GHz. The Korean carriers are using 3.5 GHz although some millimeter wave spectrum has also been allocated.

Frequency range 2 (> 24 GHz)[edit]

The minimum channel bandwidth defined for FR2 is the 50 MHz and the maximum is 400 MHz, with two-channel aggregation supported in 3GPP Release 15. In the U.S., Verizon is using 28 GHz and AT&T is using 39 GHz. 5G can use frequencies of up to 300 GHz. [54]The higher the frequency, the greater the ability to support high data transfer speeds without interfering with other wireless signals or becoming overly cluttered. Due to this, 5G can support approximately 1,000 more devices per meter than 4G.[55]

FR2 Network coverage

5G can use higher frequencies than 4G, and as a result, some 5G signals are not capable of traveling large distances (over a few hundred meters), unlike 4G or lower frequency 5G signals. This requires placing 5G base stations every few hundred meters in order to utilize higher frequency bands. Also, these higher frequency 5G signals cannot easily penetrate solid objects, like cars, trees and walls, because of the nature of these higher frequency electromagnetic waves.[56]

 
5G on FR2 base station types
(cell types)
Deployment environment Max. number
of users
Output power
(mW)
Max. distance from
base station
Femto cell Homes, businesses Home: 4−8
Businesses: 16−32
indoors: 10−100
outdoors: 200−1000
10s of meters
Pico cell Public areas like shopping malls,
airports, train stations, skyscrapers
64 to 128 indoors: 100−250
outdoors: 1000−5000
10s of meters
Micro cell Urban areas to fill coverage gaps 128 to 256 outdoors: 5000−10000 few 100s of meters
Metro cell Urban areas to provide additional capacity more than 250 outdoors: 10000−20000 100s of meters
Wi-Fi
(for comparison)
Homes, businesses less than 50 indoors: 20−100
outdoors: 200−1000
few 10s of meters

Massive MIMO

Massive MIMO (multiple input and multiple output) antennas increases sector throughput and capacity density using large numbers of antennas and Multi-user MIMO (MU-MIMO). Each antenna is individually-controlled and may embed radio transceiver components. Nokia claimed a five-fold increase in the capacity increase for a 64-Tx/64-Rx antenna system. The term “massive MIMO” was coined by Nokia Bell Labs researcher Dr. Thomas L. Marzetta in 2010, and has been launched in 4G networks, such as Softbank in Japan.[57]

Of over 562 separate 5G demonstrations, tests or trials globally of 5G technologies, at least 94 of them have involved testing Massive MIMO in the context of 5G.[58]

Edge computing

Edge computing is delivered by cloud computing servers closer to the ultimate user. It reduces latency and data traffic congestion.[59][60]

Small cell

Small cells are low-powered cellular radio access nodes that operate in licensed and unlicensed spectrum that have a range of 10 meters to a few kilometers. Small cells are critical to 5G networks, as 5G’s radio waves can’t travel long distances, because of 5G’s higher frequencies.

Beamforming

Beamforming, as the name suggests, is used to direct radio waves to a target. This is achieved by combining elements in an antenna array in such a way that signals at particular angles experience constructive interference while others experience destructive interference. This improves signal quality and data transfer speeds. Because of the improved signal quality 5G uses beamforming.

Wifi-cellular convergence

One expected benefit of the transition to 5G is the convergence of multiple networking functions to achieve cost, power and complexity reductions. LTE has targeted convergence with Wi-Fi band/technology via various efforts, such as License Assisted Access (LAA; 5G signal in unlicensed frequency bands that are also used by Wi-Fi) and LTE-WLAN Aggregation (LWA; convergence with Wi-Fi Radio), but the differing capabilities of cellular and Wi-Fi have limited the scope of convergence. However, significant improvement in cellular performance specifications in 5G, combined with migration from Distributed Radio Access Network (D-RAN) to Cloud- or Centralized-RAN (C-RAN) and rollout of cellular small cells can potentially narrow the gap between Wi-Fi and cellular networks in dense and indoor deployments. Radio convergence could result in sharing ranging from the aggregation of cellular and Wi-Fi channels to the use of a single silicon device for multiple radio access technologies.

NOMA (non-orthogonal multiple access)

NOMA (non-orthogonal multiple access) is a proposed multiple-access technique for future cellular systems. In this, same time, frequency, and spreading-code resources are shared by the multiple users via allocation of power. The entire bandwidth can be exploited by each user in NOMA for entire communication time due to which latency has been reduced and users’ data rates can be increased. For multiple access, the power domain has been used by NOMA in which different power levels are used to serve different users. 3GPP also included NOMA in LTE-A due to its spectral efficiency and is known as multiuser superposition transmission (MUST) which is two user special case of NOMA.[61]

SDN/NFV

Initially, cellular mobile communications technologies were designed in the context of providing voice services and Internet access. Today a new era of innovative tools and technologies is inclined towards developing a new pool of applications. This pool of applications consists of different domains such as the Internet of Things (IoT), web of connected autonomous vehicles, remotely controlled robots, and heterogeneous sensors connected to serve versatile applications.[62] [63][64]

Operation in unlicensed spectrum

Like LTE in unlicensed spectrum, 5G NR will also support operation in unlicensed spectrum (NR-U).[65] In addition to License Assisted Access (LAA) from LTE that enable carriers to use those unlicensed spectrum to boost their operational performance for users, in 5G NR it will support standalone NR-U unlicensed operation which will allow new 5G NR networks to be established in different environments without acquiring operational license in licensed spectrum, for instance for localized private network or lower the entry barrier for providing 5G internet services to the public.[65]

Concerns

Interference problems

Spectrum used by various 5G proposals will be very near that of passive remote sensing such as by weather and Earth observation satellites, particularly for water vapor monitoring. Interference will occur and will potentially be significant without effective controls. An increase in interference already occurred with some prior band usages.[66][67] Interference to satellite operations impairs numerical weather prediction performance with substantially deleterious economic and public safety impacts.[68][69] The concerns prompted US Secretary of Commerce Wilbur Ross and NASA Administrator Jim Bridenstine in February 2019 to urge the FCC to withdraw some spectrum auction proposals, which was rejected.[70]

Espionage concerns

Because of espionage fears on foreign users by Chinese equipment vendors, several countries have taken actions to restrict or eliminate the use of Chinese equipment in their respective 5G networks. Chinese vendors and the Chinese government have denied these claims.

Radiation fears

The development of 5G has stoked fear that radiation effects could cause health risks.[71] In April 2019, the city of Brussels in Belgium blocked a 5G trial because of radiation fears.[72] In GenevaSwitzerland, a planned upgrade to 5G was stopped for the same reason.[73]The Swiss Telecommunications Association (ASUT) has said that studies have been unable to show that 5G frequencies have any health impact.[74]

RT America, a propaganda outlet for the Russian government, has aired programming linking 5G to harmful health effects without scientific support. Several RT stories have warned of health impacts such as “brain cancer, infertility, autism, heart tumors and Alzheimer’s disease” and have spread to hundreds of blogs and websites.[75] Meanwhile, Russian president Vladimir Putin ordered the launch of Russian 5G network in February 2019. Ryan Fox, an executive of a technology firm that tracks disinformation, said, “Russia doesn’t have a good 5G play, so it tries to undermine and discredit ours.” Molly McKew, the head a U.S.-based firm that seeks to counter Russian disinformation, said the Russian government “would really enjoy getting democratic governments tied up in fights over 5G’s environmental and health hazards.”[75][76]

History

  • In April 2008, NASA partnered with Geoff Brown and Machine-to-Machine Intelligence (M2Mi) Corp to develop 5G communications technology.[77]
  • In 2008, the South Korean IT R&D program of “5G mobile communication systems based on beam-division multiple access and relays with group cooperation” was formed.[78]
  • In August 2012, New York University founded NYU WIRELESS, a multi-disciplinary academic research centre that has conducted pioneering work in 5G wireless communications.[79][80][81]
  • On 8 October 2012, the UK’s University of Surrey secured £35M for a new 5G research centre, jointly funded by the British government’s UK Research Partnership Investment Fund (UKRPIF) and a consortium of key international mobile operators and infrastructure providers, including HuaweiSamsungTelefonica Europe, Fujitsu Laboratories Europe, Rohde & Schwarz, and Aircom International. It will offer testing facilities to mobile operators keen to develop a mobile standard that uses less energy and less radio spectrum while delivering speeds faster than current 4G with aspirations for the new technology to be ready within a decade.[82][83][84][85]
  • On 1 November 2012, the EU project “Mobile and wireless communications Enablers for the Twenty-twenty Information Society” (METIS) starts its activity towards the definition of 5G. METIS achieved an early global consensus on these systems. In this sense, METIS played an important role of building consensus among other external major stakeholders prior to global standardization activities. This was done by initiating and addressing work in relevant global fora (e.g. ITU-R), as well as in national and regional regulatory bodies.[86]
  • Also in November 2012, the iJOIN EU project was launched, focusing on “small cell” technology, which is of key importance for taking advantage of limited and strategic resources, such as the radio wave spectrum. According to Günther Oettinger, the European Commissioner for Digital Economy and Society (2014–2019), “an innovative utilization of spectrum” is one of the key factors at the heart of 5G success. Oettinger further described it as “the essential resource for the wireless connectivity of which 5G will be the main driver”.[87] iJOIN was selected by the European Commission as one of the pioneering 5G research projects to showcase early results on this technology at the Mobile World Congress 2015 (Barcelona, Spain).
  • In February 2013, ITU-R Working Party 5D (WP 5D) started two study items: (1) Study on IMT Vision for 2020 and beyond, and; (2) Study on future technology trends for terrestrial IMT systems. Both aiming at having a better understanding of future technical aspects of mobile communications towards the definition of the next generation mobile.[88]
  • On 12 May 2013, Samsung Electronics stated that they had developed a “5G” system. The core technology has a maximum speed of tens of Gbit/s (gigabits per second). In testing, the transfer speeds for the “5G” network sent data at 1.056 Gbit/s to a distance of up to 2 kilometers with the use of an 8*8 MIMO.[89][90]
  • In July 2013, India and Israel agreed to work jointly on development of fifth generation (5G) telecom technologies.[91]
  • On 1 October 2013, NTT (Nippon Telegraph and Telephone), the same company to launch world’s first 5G network in Japan, wins Minister of Internal Affairs and Communications Award at CEATEC for 5G R&D efforts[92]
  • On 6 November 2013, Huawei announced plans to invest a minimum of $600 million into R&D for next generation 5G networks capable of speeds 100 times faster than modern LTE networks.[93]
  • In April 2019, South Korea became the first country to adopt 5G.[94] Just hours later, Verizon launched its 5G services, and disputed South Korea’s claim of becoming the world’s first country with a 5G network, because allegedly, South Korea’s 5G service was initially launched for just 6 South Korean celebrities so that South Korea could claim the title of having the world’s first 5G network.[95] In fact, the three main Korean telecommunication companies (SK Telecom, KT and LG Uplus) added more than 40,000 users to their 5G network on the launch day.[96]

Other applications

Automobiles

5G Automotive Association have been promoting the C-V2X communication technology that will first be deployed in 4G. It provides for communication between vehicles and communication between vehicles and infrastructures.[97]

Automation (factory and process)

5G Alliance for Connected Industries and Automation – 5G-ACIA promotes 5G for factory automation and process industry.[98]

Public safety

Mission-critical push-to-talk (MCPTT) and mission-critical video and data are expected to be furthered in 5G.[99]

Fixed wireless

Fixed wireless connections intended to replace fixed line broadband (ADSL, Fiber optic, and DOCSIS connections) with 5G connections. [100][101][102]

See also

References

https://en.wikipedia.org/wiki/5G

 

 

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The Pronk Pops Show 1262, May 22, 2019, Story 1: Pelosi vs. Trump — Nancy Pelosi: “We believe that Trump is engaged in a cover-up” — President Trump: “I Don’t Do Coverups” —  American People: “No Collusion, No Obstruction, No Cover-up, No Crime, No Sense! — Videos — Story 2: Obama Administration Officials Blaming Each Other — Videos — Story 3: Human Fence, Vehicle Fence, Replacement Fence and New Wall or Border Barrier To Stop Illegal Smuggling of Drugs and Illegal Alien Invasion — Show Us The Drone Videos of The New Completed 500 Mile Big Beautiful Border Barrier In October 2020! — Videos — Story 4: Secretary of Treasury Mnuchin — “Unlawful” to Give Congress Tax Returns

Posted on May 23, 2019. Filed under: 2020 President Candidates, 2020 Republican Candidates, American History, Blogroll, Breaking News, Cartoons, Communications, Congress, Corruption, Countries, Crime, Culture, Donald J. Trump, Donald J. Trump, Donald Trump, Empires, Employment, Federal Bureau of Investigation (FBI), Foreign Policy, Freedom of Speech, Government Dependency, Government Spending, Hillary Clinton, History, House of Representatives, Human, Human Behavior, Independence, Life, Lying, Public Corruption, Senate, Unemployment, United States of America, Videos, Violence, Wealth, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

 

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Story 1: Pelosi vs. Trump — Nancy Pelosi: “We believe that Trump is engaged in a cover-up” — President Trump: “I Don’t Do Coverups” —  American People: “No Collusion, No Obstruction, No Cover-up, No Crime, No Sense! — Videos

Trump holds surprise press conference, lashes out at Pelosi, Schumer

President Donald Trump Responds To Nancy Pelosi: ‘I Don’t Do Cover-Ups’ | MSNBC

Collins tears into House Democrats after McGahn skips hearing

Jim Jordan rips Dems’ ‘coordinated effort’ to take down Trump

The Daily Briefing With Dana Perino 5/22/19 [FULL | Trump Breaking Fox News Today May 22, 2019

Nancy Pelosi FINALLY Agrees To Talk About Impeachment

Pressure On Pelosi: 90% Of Dem Group ‘On Board’ With Impeachment | The Beat With Ari Melber | MSNBC

AOC: Move Forward With Impeachment

 

Trump is ‘obstructing justice and he’s engaged in a cover-up’: Pelosi opens door to ‘impeachable offenses’ after president storms out of infrastructure meeting

  • Speaker Nancy Pelosi opened the door to impeachable offenses committed by President Trump after he stormed out of an infrastructure meeting 
  •  ‘This president is obstructing justice and he’s engaged in a cover-up. And that could be an impeachable offense,’ she said
  • Her remarks follow a remarkable day at the White House and on Capitol Hill
  • Trump stormed out of an infrastructure meeting with Democrats after Pelosi said earlier in the day he was ‘engaged in a cover-up’ 
  • She also said she would not proceed with impeachment proceedings
  • The speaker has been under pressure from liberals to move forward on it
  • She convened a closed-door meeting at the Capitol Wednesday on the issue
  • Democrats said afterward Pelosi prevailed and held back the impeachment tide 
  • ‘We believe that the president of the United States is engaged in a cover-up,’ Pelosi told reporters afterward their morning meeting
  • President Trump snapped back at Pelosi: ‘I don’t do cover-ups’  

Speaker Nancy Pelosi on Wednesday opened the door to impeachable offenses committed by President Donald Trump after he stormed out of an infrastructure meeting at the White House.

‘The fact is – in plain sight, in the public domain – this president is obstructing justice and he’s engaged in a cover-up. And that could be an impeachable offense,’ she said at the CAPS Ideas conference in Washington D.C.

The speaker warned Trump that ignoring congressional subpoenas – which he has been ordering former administration officials to do – was part of the articles of impeachment against former President Richard Nixon. 

Speaker Nancy Pelosi opened the door to impeachable offenses committed by President Trump after he stormed out of an infrastructure meeting

Speaker Nancy Pelosi opened the door to impeachable offenses committed by President Trump after he stormed out of an infrastructure meeting

President Trump stormed out of an infrastructure meeting with Democrats after Pelosi said earlier in the day he was 'engaged in a cover-up'

President Trump stormed out of an infrastructure meeting with Democrats after Pelosi said earlier in the day he was ‘engaged in a cover-up’

‘Ignoring this – ignoring the subpoenas of Congress was article 3 of the Nixon impeachment, article three, he did not honor the subpoenas of Congress. So it is not just the substance that we’re after, we want to have to give the truth to the American people. But in striving to get that, the intervention that the obstruction that the administration is engaged in is – as they say – the cover-up is frequently worse than the crime,’ she said.

Her remarks are the furthest she come to date about going forward on impeachment proceedings against Trump – a tactic she has worried will backfire on Democrats in the 2020 election.

Pelosi also argued that the probes being conducted by six House committees into Trump’s businesses, his taxes, his 2016 campaign and his administration are getting underneath the president’s skin.

Our investigations are ‘reaping benefits,’ she said.

Her comments came after she said earlier in the day she would not proceed with impeachment proceedings against the president amid pressure from some in her party to do just that.

And it caps an incredible back-and-forth between the legislative and executive branches on a day Democrats and Trump were supposed to sit down on an issue they agree on – infrastructure.

Speaker Nancy Pelosi held a meeting with House Democrats early Wednesday morning to try and tamp down on impeachment talk but said Trump was engaged in a cover-up

Speaker Nancy Pelosi held a meeting with House Democrats early Wednesday morning to try and tamp down on impeachment talk but said Trump was engaged in a cover-up

President Trump snapped back at Pelosi: 'I don't do cover-ups'

President Trump snapped back at Pelosi: ‘I don’t do cover-ups’

Before that planned meeting, Pelosi gathered Democratic lawmakers in the Capitol Wednesday morning to try and tamp down on impeachment talk

But a comment she made afterward that Trump has ‘engaged in a cover-up’ set the president off and derailed the rest of the day’s agenda.

‘We do believe that it’s important to follow the facts. We believe that no one is above the law, including the president of the United States, and we believe that the president of the United States is engaged in a cover-up,’ she told reporters in the Capitol after she met with Democrats.

Trump snapped back – storming out of a scheduled infrastructure meeting with Pelosi and Senate Minority Leader Chuck Schumer to hold forth on the issue to reporters in the White House Rose Garden.

‘I don’t do cover-ups,’ Trump said. ‘You people probably know that better than anybody.’

He said he wouldn’t work with Pelosi or Schumer until they stood down.

‘When they get everything done, I’m all set to – let’s get infrastructure, let’s get drug prices down. In the meantime we’re doing excellent work without them,’ Trump said.

Pelosi described the meeting as ‘very, very, very strange.’

‘He walked away. Whether he intended to act on what he said before remains to be seen,’ she said at the CAPS Ideas conference. ‘It was very, very, very strange.’

She also said it was a ‘poor baby’ moment for Trump.

‘Instead in an orchestrated – almost poor baby point of view – he came in the room and said that I said he was engaged in a cover up and couldn’t possibly, couldn’t possibly engage in a conversation on infrastructure as long as we were investigating him,’ Pelosi said.

‘Now we were investigating him since we took over the majority so there’s nothing new in that. And then he had a press conference in the Rose Garden with all these sort visuals that were obviously planned before I said most currently he was engaged in a cover up. So it’s really sad,’ she added.

Schumer said Democrats were still willing to sit down with the president.

‘We want to work with the president on anything we can,’ he told reporters at the Capitol after the White House fracas.

And Pelosi told a press conference at the Capitol that she was praying for Trump.

‘He just took a pass. And it just makes me wonder why he did that. In any event, I pray for the president of the United States and I pray for the United States of America,’ she said.

While Democrats gave their point of view as to the day’s happenings, Trump again took to Twitter to rail against them.

‘So sad that Nancy Pelosi and Chuck Schumer will never be able to see or understand the great promise of our Country,’ he wrote.

‘Nancy, thank you so much for your prayers, I know you truly mean it!,’ he added.

Speaker Pelosi and Senate Democratic Leader Chuck Schumer in the U.S. Capitol building after Trump stormed out of their infrastructure meeting

Speaker Pelosi and Senate Democratic Leader Chuck Schumer in the U.S. Capitol building after Trump stormed out of their infrastructure meeting

 

The infrastructure meeting was a long scheduled follow up from a sit down Democrats and the president had earlier this month on the issue.

But before that took place, Pelosi hosted a closed-door meeting with House Democrats on Wednesday at the Capitol to try to rein in lawmakers who want to see impeachment proceedings begin against Trump.

Her tactic appeared to work – for now.

Freshman Rep. Alexandria Ocasio-Cortez, who was one of those beating the impeachment drumbeat, sounded a more muted tone after the gathering.

‘I was satisfied with the openness of the conversation,’ she told NBC News. ‘I think we’re having thoughtful conversations about it and that’s the important thing.’

Pelosi let the six committee chairman leading investigations against Trump make her case that the Democrats are investigating the president and don’t need to go as far as impeachment to continue to do so.

Additionally, a pro-impeachment faction addressed the members, lawmakers in the room said afterward.

Pelosi described it as a ‘respectful’ gathering and said the meeting wasn’t about persuading lawmakers to change their minds about impeachment.

‘It’s not a question of persuasion, we were just exchanging information and points of view,’ she said.

And she hit back at an early morning tweet from Trump who charged Democrats with sacrificing their legislative work to investigate him.

‘We do have our legislative agenda that we’re moving forward on. It was a very positive meeting, a respectful sharing of ideas, and I think a very impressive presentation by our chairs,’ Pelosi said.

Pelosi said she was praying for President Trump

Pelosi said she was praying for President Trump

Trump opened fired on Democrats Wednesday morning before the party met.

‘The Democrats are getting ZERO work done in Congress. All they are focused on is trying to prove the Mueller Report wrong, the Witch Hunt!,’ the president complained on Twitter.

Democrats in Pelosi’s corner were able to talk about victories in their probe of Trump, his businesses, his 2016 campaign and his administration.

House Judiciary Committee chairman Jerry Nadler discussed his panel’s vote to hold Attorney General Bill Barr in contempt for not handing over the full, unredacted report from Special Counsel Robert Mueller.

He pushed for the full House to vote on contempt of Congress for Barr this month.

He also said Mueller must testify in public, according to a Democratic source in the room. The Judiciary panel and the Justice Department are negotiating on Mueller’s testimony and reports indicate the special counsel would prefer to speak behind closed doors.

House Intelligence Committee Chairman Adam Schiff discussed his panel’s recent agreement with the Justice Department to begin accessing parts of Mueller’s files in the Russia investigation.

And House Oversight and Reform Committee Chairman Elijah Cummings pointed out that Democrats won a key court case – a federal district judge ruled on Monday that the accounting firm Mazars will need to turn over Trump’s accounting records to the panel.

Rep. Zoe Lofgren pointed out than any subpoenas in an impeachment inquiry would also have to go through the court process.

‘Regarding impeachment inquiry, we still have to go to court to get our subpoenas enforced. You know, we are winning those battles now,’ she said.

The impeachment talk among Democrats heated up in the wake of former White House counsel Don McGahn’s refusal, at the White House’s request, to comply with a subpoena for his testimony on the Russia investigation and his testimony outlined in Mueller’s report.

His refusal to appear Tuesday set off a wave of fury among Democrats.

Freshman Rep. Alexandria Ocasio-Cortez, who was one of those beating the impeachment drumbeat, sounded a more muted tone after the gathering

Freshman Rep. Alexandria Ocasio-Cortez, who was one of those beating the impeachment drumbeat, sounded a more muted tone after the gathering

House Judiciary Committee chairman Jerry Nadler pushed for the full House to vote on holding Attorney General Bill Barr in contempt this month

House Judiciary Committee chairman Jerry Nadler pushed for the full House to vote on holding Attorney General Bill Barr in contempt this month

Former Rep. Beto O'Rourke, who is running for the Democratic nomination, said during a town hall in Iowa Tuesday night that impeachment is 'not something that I take lightly'

Former Rep. Beto O’Rourke, who is running for the Democratic nomination, said during a town hall in Iowa Tuesday night that impeachment is ‘not something that I take lightly’

Democratic lawmakers said afterward that Pelosi was able to tamp down on some members’ call for Trump’s head.

‘Nancy still prevails in persuading our caucus to keep your powder dry on that one,’ Rep. Gerry Connolly said afterward of the impeachment talk even as he conceded no lawmakers pushing for impeachment changed their minds.

‘The overwhelming majority of the House Democratic Caucus continue to believe that the speaker has set forth the appropriate course which is deliberate yet forceful,’ Rep. Hakeem Jeffries, chairman of the Democratic Caucus, said afterward.

‘There is a growing number of members who have publicly articulated a desire to move toward an impeachment inquiry but as far as I can tell the number is somewhere between 20 and 25,’ he added. ‘There are 239 members of the House Democratic Caucus, which means the overwhelming majority continue to believe that we should proceed along the course that we’re on right now.’

Some lawmakers, however, cautioned that continued defiance by the president would heat up impeachment talk again.

‘I think that we’re seeing the drumbeat moving in that direction, the more he defies us,’ Democratic Rep. Katie Hill said. ‘But I don’t think that the process is as a whole, is there.’

Pelosi was a leader in the House in the 1990s when Republicans tried to impeach then-President Bill Clinton – only to lose control of the lower chamber in the next election.

But some more liberals members have pushed to move forward with impeachment proceedings amid Trump’s defiance of congressional subpoenas for information on . his businesses and testimony from former administration officials.

The calls have even gone beyond the halls of Congress to the 2020 presidential campaign.

Former Rep. Beto O’Rourke, who is running for the Democratic nomination, said during a town hall in Iowa Tuesday night that impeachment is ‘not something that I take lightly’.

‘If we do nothing because we are afraid of the polls or the politics, or the repercussions in the next election, we will set a precedent that, in fact, some people, because of the position of power and public trust that they hold, are above the law,’ he said.

 

https://www.dailymail.co.uk/news/article-7058699/Nancy-Pelosi-says-NOT-going-impeach-Trump-amid-push-rank-file-members.html

 

Story 2: Obama Administration Officials Blaming Each Other — President Trump Should Release All of The Foreign Intelligence Surveillance Act (FISA) Court Warrant Application For Carter Page —  Videos —

Brennan may have set his own perjury trap: Napolitano

Hannity: Either Lynch or Comey are lying

Story 3: Human Fence, Vehicle Fence, Replacement Fence and New Wall or Border Barrier To Stop Illegal Smuggling of Drugs and Illegal Alien Invasion of United States — Show Us The Drone Videos of The New Completed 500 Mile Big Beautiful Border Barrier In October 2020! — Videos —

 

See the source image

Trump will secure the border at all costs: Tom Homan

US company offers to build border wall for a fraction of the cost

Trump’s Wall: Life on the US-Mexico Border

A Little Good News from the Border

 

Trump has built less than 2 miles of new wall with $1.57 BILLION Congress handed him for this year but insists ‘demolition and rebuilding’ should count too

  • Letter to a federal judge from the House of Representatives’ top lawyer spells out how little this year’s congressional appropriation has bought
  • Trump claims he should get credit for replacing older walls that are ineffective
  • He promised Monday night that he would have 500 miles of wall built by next year, but so far it’s just 1.7 miles
  • Nearly all the wall construction under contract  from the Army Corps of Engineers is for replacements where barriers already existed
  • Sarah Sanders insisted Wednesday that ‘close to 115 miles’ have been builtbut a Fox News interviewer didn’t askher if that was ‘new’ or ‘replacement’ barriers

The Trump administration has built less than 2 miles of new border barriers using the $1.57 billion Congress allocated to the project for the fiscal year that will end September 30, according to a letter filed Tuesday in federal court.

House of Representatives general counsel Douglas Letter made that revelation to Judge Haywood Gillam, citing information the administration provided to Congress about its efforts through the end of April.

‘Based on that updated information, it appears that CBP has now constructed 1.7 miles of fencing with its fiscal year 2018 funding,’ Letter wrote.

President Donald Trump fired back Wednesday on Twitter, defending what he said has been ‘a complete demolition and rebuilding of old and worthless barriers with a brand new Wall and footings.’

‘Problem is, the Haters say that is not a new Wall, but rather a renovation. Wrong, and we must build where most needed,’ he added.

President Donald Trump played defense on Wednesday after a lawyer for Congress told a federal judge that his administration has made little progress building a border wall despite getting $1.57 billion in funding for it this year

On Tuesday the House of Representatives' general counsel told a judge that U.S. Customs and Border Patrol 'has now constructed 1.7 miles of fencing' with the $1.57 billion it received for the project in the fiscal year that ends September 30

On Tuesday the House of Representatives’ general counsel told a judge that U.S. Customs and Border Patrol ‘has now constructed 1.7 miles of fencing’ with the $1.57 billion it received for the project in the fiscal year that ends September 30

White House Press Secretary Sarah Sanders insisted Wednesday on TV that the administrationwill have 500 miles of wall built by year's end and would be twice as far along if Democrats were helping instead of pushing back

‘Also, tremendous work is being done on pure renovation – fixing existing Walls that are in bad condition and ineffective, and bringing them to a very high standard!’ Trump concluded.

A U.S. Customs and Border Protection spokesman told DailyMail.com in March that it had not erected any walls at all to protect previously unbarricaded sections of America’s southern border.

‘The first new wall project, where no barrier currently exists, is anticipated to start in April,’ CBP spokesman Roger Maier said at the time. He identified Hidalgo County as the construction project’s location, a border zone along a meandering 50-mile stretch of the Rio Grande.

CBP said last year that it was ‘designing and constructing approximately 25 miles of levee wall system’ in that county, whose anchor is the the border city of McAllen.

Maier did not immediately respond to a question on Wednesday about whether the Hidalgo County project has proceeded.

CBP wrote in March, after DailyMail.com reported Maier’s comments, that it had ‘built 38 miles of new border wall system in CA NM & TX—providing new capability by replacing ineffective infrastructure, like Normandy-style barriers designed only to stop vehicles, not people on foot.’

Trump blasted the 'haters' who point to a lack of action at the border, claiming that he should get credit for 'demolition and rebuilding' of ineffective border barriers

Trump blasted the ‘haters’ who point to a lack of action at the border, claiming that he should get credit for ‘demolition and rebuilding’ of ineffective border barriers

Trump said Monday night during a rally in Pennsylvania that ‘the wall is being built as we speak.’

‘We’ll have almost 500 miles of wall by the end of next year,’ he boasted, inviting an audience member on stage who was wearing a suit made of brick wall-print fabric.

White House Press Secretary Sarah Sanders upper the ante Wednesday morning, saying the administration will hit that landmark by the end of 2019 and that Letter cited ‘an incorrect number.’

‘I know that there have been – there’s over 100 miles, I think it’s close to 115 miles that have been finished,’ she said on ‘Fox & Friends.’

‘We feel comfortable and confident that we’re on track to get right around 500 finished by the end of the year,’ Sanders insisted.

Letter’s letter doesn’t address the possibility that the Trump administration has used money for wall-building other than the funds Congress appropriated for this year.

The president has rediirected billions of dollars to the project through a national emergency declaration, while claiming at the same time that the project has long been underway.

Both houses of Congress voted to rescind that declaration with a resolution that the president vetoed in March.

Nearly all of the documented border wall construction the Trump administration has engaged in so far has consisted of replacing some existing barriers and reinforcing others with secondary fencing

Nearly all of the documented border wall construction the Trump administration has engaged in so far has consisted of replacing some existing barriers and reinforcing others with secondary fencing

Customs and Border Protection says it has replaced 'dilapidated' border barriers that consisted of Normandy-style vehicle barriers like these, shown in April 2018 between Santa Teresa, New Mexico and Ciudad Mexico

Customs and Border Protection says it has replaced ‘dilapidated’ border barriers that consisted of Normandy-style vehicle barriers like these, shown in April 2018 between Santa Teresa, New Mexico and Ciudad Juarez, Mexico

The administration has awarded contracts for just 244 miles of barriers so far, and more than half of the money required to pay for those projects is earmarked from emergency-declaration funds that court battles have, at least temporarily, put out of reach.

Of those 244 miles’ worth of contracted walls, 230 would be replacements to barriers that existed when Trump became president in January 2017.

Judge Gillam presides over two separate lawsuits aimed at stopping Trump from using emergency-declaration money to fund construction that Congress has refused to pay for.

California and 19 other states brought one suit. Plaintiffs in the other include the Sierra Club and the American Civil Liberties Union.

Trump has boasted in the past that ‘[w]e have already built large new sections’ during his time in the White House.

But border barriers erected between the U.S. and Mexico since Inauguration Day 2017 have consisted almost exclusively of supplements to existing walls and replacements for outmoded or decreipt barriers. 

Maier said in March that CBP had ‘constructed approximately 38 of 40 miles of wall in place of outdated designs,’ using funds Congress appropriated for fiscal 2017.

Those replacements are up in San Diego and El Centro, California; Santa Teresa, New Mexico; and El Paso, Texas. 

‘This barrier replaced dilapidated infrastructure, half of which was Normandy-style vehicle barrier,’ he said.

https://www.dailymail.co.uk/news/article-7058091/Trump-built-2-miles-new-wall-1-57-BILLION-Congress-handed-year.html

Story 4: Secretary of Treasury Mnuchin — “Unlawful” to Give Congress Tax Returns

Mnuchin Says It’s `Unlawful’ to Give Congress Trump Tax Returns

Steve Mnuchin Testifies Before House Committee | NowThis

Treasury Secretary Steve Mnuchin Says It’s ‘Unlawful’ to Give Democrats Trump’s Tax Returns

Mnuchin: ‘I Will Follow The Law,’ Protect Trump’s Privacy If Tax Returns Are Requested | NBC News

 

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The Pronk Pops Show 1261, May 21, 2019, Story 1: Do Not Believe The Poll That 43% of Americans Believe That Socialism Would Be A Good Thing — More Capitalism and Less Socialism Would Be Excellent –Videos — Story 2: Progressive Socialist Democrats Want To Impeach Trump — Please Do and Lose — From Collusion Delusion To Obstruction Delusion To Democrats Destruction — Game Set Match — Videos

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Democratic Socialism is Still Socialism

Capitalism vs. Socialism

How Socialism Ruined My Country

Is Denmark Socialist?

Socialists and Other Grotesque Ingrates | Thomas E. Woods, Jr.

Socialism Makes People Selfish

Free Market Masters: Ludwig von Mises

Hayek on Socialism

Ludwig von Mises Speaks: Socialism versus Free Market Exchange (1970)

The Impossibility of Economic Calculation Under Socialism

Ten Things Millennials Should Know About Socialism | Thomas J. DiLorenzo

 

Four in 10 Americans Embrace Some Form of Socialism

Four in 10 Americans Embrace Some Form of Socialism

STORY HIGHLIGHTS

  • 43% of Americans say socialism would be a good thing for the country
  • 51% believe socialism would be a bad thing for the country
  • Americans split on viewing economy as free market or government controlled

WASHINGTON, D.C. — Americans today are more closely divided than they were earlier in the last century when asked whether some form of socialism would be a good or bad thing for the country. While 51% of U.S. adults say socialism would be a bad thing for the country, 43% believe it would be a good thing. Those results contrast with a 1942 Roper/Fortune survey that found 40% describing socialism as a bad thing, 25% a good thing and 34% not having an opinion.

More Americans Now See Socialism as a Good Thing for the Country
Would some form of socialism be a good thing or a bad thing for the country as a whole?
1942 2019 Change
% % pct. pts.
Good thing 25 43 +18
Bad thing 40 51 +11
No opinion 34 6 -28
Net “good thing” -15 -8 +7
Note: 1942 data gathered by Roper Center for Public Opinion Research
GALLUP

The Roper/Fortune survey is one of the oldest trend questions measuring attitudes on socialism in the U.S. Gallup’s update of the question in an April 17-30 survey finds Americans more likely to have an opinion on the matter now, as well as a smaller gap in the percentage calling socialism a bad thing vs. a good thing.

Previous Gallup research shows that Americans’ definition of socialism has changed over the years, with nearly one in four now associating the concept with social equality and 17% associating it with the more classical definition of having some degree of government control over the means of production. A majority of Democrats have said they view socialism positively in Gallup polling since 2010, including 57% in the most recent measure in 2018.

Outlook on Socialism Around the World

The April 17-30 survey also updates another historical question on socialism. Gallup first asked Americans in 1949 about their outlook on the spread of democracy over the next 50 years. At that time, seven in 10 Americans (72%) predicted that most countries in the world would have a democratic government. It’s important to note that in much of the political rhetoric of the time, the terms democracy and capitalism were more intimately intertwined than they are today, perhaps synonymous to many.

Americans’ Views on Future of Democracy and Socialism Globally
During the next 50 years, do you think most of the nations of the world will have a democratic government, a communist government or a socialist government?
1949 2019 Change
% % pct. pts.
Democratic 72 57 -15
Socialist 14 29 +15
Communist 9 6 -3
No opinion 5 8 +3
GALLUP

The current update on this question finds a marked increase in the percentage saying that most countries during the next 50 years will have a socialist government (29%). It is unclear whether this is due to the flourishing of democracies — particularly in Europe and Latin America — led by what are often described as social democrats, or whether a fundamental shift is taking place among some Americans in their views of socialism.

Government vs. Free Market

In the same April survey, Gallup asked Americans whether they would prefer mostly free market or government control over several economic and societal activities. Americans are most likely to prefer free market control in the areas of technological innovation and the distribution of wealth. Majorities also want the free market to drive the economy overall, wages, higher education and healthcare.

Preference for the government to serve as the primarily responsible actor only garners majority support for protecting online consumer privacy and the environment.

Majority Want Free Market to Lead on Many Fronts
Would you prefer to have the free market or the government be primarily responsible for what happens in each of the following areas?
Free market Government Net “free market”
% % pct. pts.
Technological innovation 75 19 +56
The distribution of wealth 68 28 +40
The economy overall 62 33 +29
Wages 62 35 +27
Higher education 56 41 +15
Healthcare 53 44 +9
Protecting consumers’ privacy online 40 57 -17
Environmental protection 30 66 -36
GALLUP, APRIL 17-30, 2019

Notably, more Americans favor free market than government control over healthcare and higher education, two areas in which Democratic politicians have made proposals to greatly expand government involvement. But at least four in 10 Americans appear sympathetic to policies that would increase the government’s role in those areas.

While there is ample support for a market-driven approach to many of the issues cited above, Americans are divided on how they describe the current state of the U.S. economy. When asked whether they think the U.S. economy leans more toward free market control or toward government control, 40% say it leans more toward government control while fewer say it leans toward free market control (34%). One in four describe it as an equal mix.

Stacked bar graph. Americans’ views of the current state of free market versus government control of the economy.

Bottom Line

Americans’ views on socialism are complex. While some recent data can easily lend to overstated conclusions, there are marked changes in Americans’ views of socialism when taking a longer, more historical look at the data. However, exactly what Americans mean by the term is nuanced and multifaceted. While half of Americans consider socialism as bad for the country, nearly two-thirds say that the U.S. economy is more influenced by the government than the free market, or that it reflects an equal mix of the two.

Additionally, while a majority of Democrats view socialism positively, that is not a major change in the eight years Gallup has tracked this metric. The major shift over this time has been the reduced rate of Democrats who now view capitalism positively (47%).

These data alone make it hard to generalize a simplistic conclusion about Americans’ opinions of, and willingness to entertain, socialism. But there are a few clear takeaways. About four in 10 Americans are accepting of some form of socialism or socialist policies, and Democrats currently have a more positive view of socialism than capitalism. In addition, the April survey found that 47% of Americans say they would vote for a socialist candidate for president. While that figure represents nearly half of the U.S. adult population, even higher percentages say they would vote for an atheist (58%) or Muslim (60%) presidential candidate.

However, when they are asked what role they would like to see the government play in certain areas of society, Americans continue to endorse the free market.

Shifting attitudes about socialism, capitalism, and the current economic and political systems in America — as well as what alternatives many see as solutions for current shortcomings — will continue to be a major focus for Gallup.

Learn more about how the Gallup Poll Social Series works.

View complete question responses and trends

Capitalism

From Wikipedia, the free encyclopedia

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Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.[1][2][3][4] Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets.[5][6] In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.[7][8]

Economists, political economists, sociologists and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism and state capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership,[9] obstacles to free competition and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism.[10][11] The extent to which different markets are free as well as the rules defining private property are matters of politics and policy. Most existing capitalist economies are mixed economies, which combine elements of free markets with state intervention and in some cases economic planning.[12]

Market economies have existed under many forms of government and in many different times, places and cultures. Modern capitalist societies—marked by a universalization of money-based social relations, a consistently large and system-wide class of workers who must work for wages, and a capitalist class which owns the means of production—developed in Western Europe in a process that led to the Industrial Revolution. Capitalist systems with varying degrees of direct government intervention have since become dominant in the Western world and continue to spread. Over time, capitalist countries have experienced consistent economic growth and an increase in the standard of living.

Critics of capitalism argue that it establishes power in the hands of a minority capitalist class that exists through the exploitation of the majority working class and their labor; prioritizes profit over social good, natural resources and the environment; and is an engine of inequality, corruption and economic instabilities. Supporters argue that it provides better products and innovation through competition, disperses wealth to all productive people, promotes pluralism and decentralization of power, creates strong economic growth, and yields productivity and prosperity that greatly benefit society.

Contents

Etymology

Other terms sometimes used for capitalism:

The term “capitalist”, meaning an owner of capital, appears earlier than the term “capitalism” and it dates back to the mid-17th century. “Capitalism” is derived from capital, which evolved from capitale, a late Latin word based on caput, meaning “head”—also the origin of “chattel” and “cattle” in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money or money carrying interest.[24]:232[25][26] By 1283, it was used in the sense of the capital assets of a trading firm and it was frequently interchanged with a number of other words—wealth, money, funds, goods, assets, property and so on.[24]:233

The Hollandische Mercurius uses “capitalists” in 1633 and 1654 to refer to owners of capital.[24]:234 In French, Étienne Clavier referred to capitalistes in 1788,[27] six years before its first recorded English usage by Arthur Young in his work Travels in France (1792).[26][28] In his Principles of Political Economy and Taxation (1817), David Ricardo referred to “the capitalist” many times.[29] Samuel Taylor Coleridge, an English poet, used “capitalist” in his work Table Talk (1823).[30] Pierre-Joseph Proudhon used the term “capitalist” in his first work, What is Property? (1840), to refer to the owners of capital. Benjamin Disraeli used the term “capitalist” in his 1845 work Sybil.[26]

The initial usage of the term “capitalism” in its modern sense has been attributed to Louis Blanc in 1850 (“What I call ‘capitalism’ that is to say the appropriation of capital by some to the exclusion of others”) and Pierre-Joseph Proudhon in 1861 (“Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labour”).[24]:237 Karl Marx and Friedrich Engels referred to the “capitalistic system”[31][32] and to the “capitalist mode of production” in Capital (1867).[33] The use of the word “capitalism” in reference to an economic system appears twice in Volume I of Capital, p. 124 (German edition) and in Theories of Surplus Value, tome II, p. 493 (German edition). Marx did not extensively use the form capitalism, but instead those of capitalist and capitalist mode of production, which appear more than 2,600 times in the trilogy The Capital. According to the Oxford English Dictionary (OED), the term “capitalism” first appeared in English in 1854 in the novel The Newcomes by novelist William Makepeace Thackeray, where he meant “having ownership of capital”.[34] Also according to the OED, Carl Adolph Douai, a German American socialist and abolitionist, used the phrase “private capitalism” in 1863.

History

Capitalism in its modern form can be traced to the emergence of agrarian capitalism and mercantilism in the early Renaissance, in city states like Florence.[35] Capital has existed incipiently on a small scale for centuries[36] in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labour. Simple commodity exchange and consequently simple commodity production, which are the initial basis for the growth of capital from trade, have a very long history. Classical Islam promulgated capitalist economic policies such as free trade and banking. Their use of Indo-Arabic numerals facilitated bookkeeping. These innovations migrated to Europe through trade partners in cities such as Venice and Pisa. The Italian mathematician Fibonacci traveled the Mediterranean talking to Arab traders, and returned to popularize the use of Indo-Arabic numerals in Europe.[37]

Capital and commercial trade thus existed for much of history, but it did not lead to industrialisation or dominate the production process of society. That required a set of conditions, including specific technologies of mass production, the ability to independently and privately own and trade in means of production, a class of workers willing to sell their labour power for a living, a legal framework promoting commerce, a physical infrastructure allowing the circulation of goods on a large scale and security for private accumulation. Many of these conditions do not currently exist in many Third World countries, although there is plenty of capital and labour. The obstacles for the development of capitalist markets are therefore less technical and more social, cultural and political.

Agrarian capitalism

The economic foundations of the feudal agricultural system began to shift substantially in 16th-century England as the manorial system had broken down and land began to become concentrated in the hands of fewer landlords with increasingly large estates. Instead of a serf-based system of labor, workers were increasingly employed as part of a broader and expanding money-based economy. The system put pressure on both landlords and tenants to increase the productivity of agriculture to make profit; the weakened coercive power of the aristocracy to extract peasant surpluses encouraged them to try better methods; and the tenants also had incentive to improve their methods in order to flourish in a competitive labor market. Terms of rent for land were becoming subject to economic market forces rather than to the previous stagnant system of custom and feudal obligation.[38][39]

By the early 17th century, England was a centralized state in which much of the feudal order of Medieval Europe had been swept away. This centralization was strengthened by a good system of roads and by a disproportionately large capital city, London. The capital acted as a central market hub for the entire country, creating a very large internal market for goods, contrasting with the fragmented feudal holdings that prevailed in most parts of the Continent.

Mercantilism

A painting of a French seaport from 1638 at the height of mercantilism

The economic doctrine prevailing from the 16th to the 18th centuries is commonly called mercantilism.[40][41] This period, the Age of Discovery, was associated with the geographic exploration of the foreign lands by merchant traders, especially from England and the Low Countries. Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist methods.[42] Most scholars consider the era of merchant capitalism and mercantilism as the origin of modern capitalism,[43][44] although Karl Polanyi argued that the hallmark of capitalism is the establishment of generalized markets for what he called the “fictitious commodities”, i.e. land, labor and money. Accordingly, he argued that “not until 1834 was a competitive labor market established in England, hence industrial capitalism as a social system cannot be said to have existed before that date”.[45]

Robert Clive after the Battle of Plassey, which began East India Company rule in India

England began a large-scale and integrative approach to mercantilism during the Elizabethan Era (1558–1603). A systematic and coherent explanation of balance of trade was made public through Thomas Mun‘s argument England’s Treasure by Forraign Trade, or the Balance of our Forraign Trade is The Rule of Our Treasure. It was written in the 1620s and published in 1664.[46]

European merchants, backed by state controls, subsidies and monopolies, made most of their profits by buying and selling goods. In the words of Francis Bacon, the purpose of mercantilism was “the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of the soil; the regulation of prices…”.[47]

The British East India Company and the Dutch East India Company inaugurated an expansive era of commerce and trade.[48][49] These companies were characterized by their colonial and expansionary powers given to them by nation-states.[48] During this era, merchants, who had traded under the previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment.

Industrial capitalism

A Watt steam engine: the steam engine fuelled primarily by coal propelled the Industrial Revolution in Great Britain[50]

In the mid-18th century, a new group of economic theorists, led by David Hume[51] and Adam Smith, challenged fundamental mercantilist doctrines such as the belief that the world’s wealth remained constant and that a state could only increase its wealth at the expense of another state.

During the Industrial Revolution, industrialists replaced merchants as a dominant factor in the capitalist system and affected the decline of the traditional handicraft skills of artisans, guilds and journeymen. Also during this period, the surplus generated by the rise of commercial agriculture encouraged increased mechanization of agriculture. Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work process and the routine of work tasks; and finally established the global domination of the capitalist mode of production.[41]

Britain also abandoned its protectionist policy as embraced by mercantilism. In the 19th century, Richard Cobden and John Bright, who based their beliefs on the Manchester School, initiated a movement to lower tariffs.[52] In the 1840s, Britain adopted a less protectionist policy, with the repeal of the Corn Laws and the Navigation Acts.[41] Britain reduced tariffs and quotas, in line with David Ricardo’s advocacy for free trade.

Modern capitalism

The gold standard formed the financial basis of the international economy from 1870 to 1914

Capitalism was carried across the world by broader processes of globalization and by the beginning of the nineteenth century a series of loosely connected market systems had come together as a relatively integrated global system, in turn intensifying processes of economic and other globalization.[53][page needed] Later in the 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide,[16][54] with the mixed economy being its dominant form in the industrialized Western world.

Industrialization allowed cheap production of household items using economies of scale while rapid population growth created sustained demand for commodities. Globalization in this period was decisively shaped by 18th-century imperialism.[53][page needed]

After the First and Second Opium Wars and the completion of British conquest of India, vast populations of these regions became ready consumers of European exports. Also in this period, areas of sub-Saharan Africa and the Pacific islands were colonised. The conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies and the United States:

The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914.[55]

In this period, the global financial system was mainly tied to the gold standard. The United Kingdom first formally adopted this standard in 1821. Soon to follow were Canada in 1853, Newfoundland in 1865, the United States and Germany (de jure) in 1873. New technologies, such as the telegraph, the transatlantic cable, the radiotelephone, the steamship and railway allowed goods and information to move around the world at an unprecedented degree.[56]

The New York stock exchange traders’ floor (1963)

In the period following the global depression of the 1930s, the state played an increasingly prominent role in the capitalistic system throughout much of the world. The postwar boom ended in the late 1960s and early 1970s and the situation was worsened by the rise of stagflation.[57] Monetarism, a modification of Keynesianism that is more compatible with laissez-faire, gained increasing prominence in the capitalist world, especially under the leadership of Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom in the 1980s. Public and political interest began shifting away from the so-called collectivist concerns of Keynes’s managed capitalism to a focus on individual choice, called “remarketized capitalism”.[58]

According to Harvard academic Shoshana Zuboff, a new genus of capitalism, surveillance capitalism, monetizes data acquired through surveillance.[59][60][61] She states it was first discovered and consolidated at Google, emerged due to the “coupling of the vast powers of the digital with the radical indifference and intrinsic narcissism of the financial capitalism and its neoliberal vision that have dominated commerce for at least three decades, especially in the Anglo economies”[60] and depends on the global architecture of computer mediation which produces a distributed and largely uncontested new expression of power she calls “Big Other”.[62]

Relationship to democracy

Many analysts[who?] assert that China is one of the main examples of state capitalism in the 21st century

The relationship between democracy and capitalism is a contentious area in theory and in popular political movements. The extension of universal adult male suffrage in 19th-century Britain occurred along with the development of industrial capitalism and democracy became widespread at the same time as capitalism, leading capitalists to posit a causal or mutual relationship between them.[63] However, according to some authors in the 20th-century, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including fascist regimes, absolute monarchies and single-party states.[41] Democratic peace theory asserts that democracies seldom fight other democracies, but critics of that theory suggest that this may be because of political similarity or stability rather than because they are democratic or capitalist. Moderate critics argue that though economic growth under capitalism has led to democracy in the past, it may not do so in the future as authoritarian regimes have been able to manage economic growth without making concessions to greater political freedom.[64][65]

Milton Friedman, one of the biggest supporters of the idea that capitalism promotes political freedom, argued that competitive capitalism allows economic and political power to be separate, ensuring that they do not clash with one another. Moderate critics have recently challenged this, stating that the current influence lobbying groups have had on policy in the United States is a contradiction, given the approval of Citizens United. This has led people to question the idea that competitive capitalism promotes political freedom. The ruling on Citizens United allows corporations to spend undisclosed and unregulated amounts of money on political campaigns, shifting outcomes to the interests and undermining true democracy. As explained in Robin Hahnel’s writings, the centerpiece of the ideological defense of the free market system is the concept of economic freedom and that supporters equate economic democracy with economic freedom and claim that only the free market system can provide economic freedom. According to Hahnel, there are a few objections to the premise that capitalism offers freedom through economic freedom. These objections are guided by critical questions about who or what decides whose freedoms are more protected. Often, the question of inequality is brought up when discussing how well capitalism promotes democracy. An argument that could stand is that economic growth can lead to inequality given that capital can be acquired at different rates by different people. In Capital in the Twenty-First Century, Thomas Piketty of the Paris School of Economics asserts that inequality is the inevitable consequence of economic growth in a capitalist economy and the resulting concentration of wealth can destabilize democratic societies and undermine the ideals of social justice upon which they are built.[66]

States with capitalistic economic systems have thrived under political regimes deemed to be authoritarian or oppressive. Singapore has a successful open market economy as a result of its competitive, business-friendly climate and robust rule of law. Nonetheless, it often comes under fire for its brand of government which though democratic and consistently one of the least corrupt[67] it also operates largely under a one-party rule and does not vigorously defend freedom of expression given its government-regulated press as well as penchant for upholding laws protecting ethnic and religious harmony, judicial dignity and personal reputation. The private (capitalist) sector in the People’s Republic of China has grown exponentially and thrived since its inception, despite having an authoritarian government. Augusto Pinochet‘s rule in Chile led to economic growth and high levels of inequality[68] by using authoritarian means to create a safe environment for investment and capitalism. Similarly, Suharto‘s authoritarian reign and extirpation of the Communist Party of Indonesia allowed for the expansion of capitalism in Indonesia.[69][70]

Varieties of capitalism

Peter A. Hall and David Soskice argued that modern economies have developed two different forms of capitalism: liberal market economies (or LME) (e.g. the United States, the United Kingdom, Canada, New Zealand and Ireland) and coordinated market economies (CME) (e.g. Germany, Japan, Sweden and Austria). Those two types can be distinguished by the primary way in which firms coordinate with each other and other actors, such as trade unions. In LMEs, firms primarily coordinate their endeavors by way of hierarchies and market mechanisms. Coordinated market economies more heavily rely on non-market forms of interaction in the coordination of their relationship with other actors (for a detailed description see Varieties of Capitalism). These two forms of capitalisms developed different industrial relations, vocational training and education, corporate governance, inter-firm relations and relations with employees. The existence of these different forms of capitalism has important societal effects, especially in periods of crisis and instability. Since the early 2000s, the number of labor market outsiders has rapidly grown in Europe, especially among the youth, potentially influencing social and political participation. Using varieties of capitalism theory, it is possible to disentangle the different effects on social and political participation that an increase of labor market outsiders has in liberal and coordinated market economies (Ferragina et al., 2016).[71] The social and political disaffection, especially among the youth, seems to be more pronounced in liberal than coordinated market economies. This signals an important problem for liberal market economies in a period of crisis. If the market does not provide consistent job opportunities (as it has in previous decades), the shortcomings of liberal social security systems may depress social and political participation even further than in other capitalist economies.

Characteristics

In general, capitalism as an economic system and mode of production can be summarised by the following:[72]

The market

The price (P) of a product is determined by a balance between production at each price (supply, S) and the desires of those with purchasing power at each price (demand, D): this results in a market equilibrium, with a given quantity (Q) sold of the product, whereas a rise in demand would result in an increase in price and an increase in output

In free market and laissez-faire forms of capitalism, markets are used most extensively with minimal or no regulation over the pricing mechanism. In mixed economies, which are almost universal today,[80] markets continue to play a dominant role, but they are regulated to some extent by the state in order to correct market failures, promote social welfare, conserve natural resources, fund defense and public safety or other rationale. In state capitalist systems, markets are relied upon the least, with the state relying heavily on state-owned enterprises or indirect economic planning to accumulate capital.

Supply is the amount of a good or service that is available for purchase or sale. Demand is the measure of value for a good that people are willing to buy at a given time. Prices tend to rise when demand for an available resource increases or its supply diminishes and fall with demand or when supply increases.

Competition arises when more than one producer is trying to sell the same or similar products to the same buyers. In capitalist theory, competition leads to innovation and more affordable prices. Without competition, a monopoly or cartel may develop. A monopoly occurs when a firm is granted exclusivity over a market. Hence the firm can engage in rent seeking behaviors such as limiting output and raising prices because it has no fear of competition. A cartel is a group of firms that act together in a monopolistic manner to control output and prices.

Governments have implemented legislation for the purpose of preventing the creation of monopolies and cartels. In 1890, the Sherman Anti-Trust Act became the first legislation passed by the United States Congress to limit monopolies.[81]

Profit motive

The profit motive, in the theory in capitalism, is the desire to earn income in the form of profit. Stated differently, the reason for a business’s existence is to turn a profit. The profit motive functions according to rational choice theory, or the theory that individuals tend to pursue what is in their own best interests. Accordingly, businesses seek to benefit themselves and/or their shareholders by maximizing profit.

In capitalist theoretics, the profit motive is said to ensure that resources are being allocated efficiently. For instance, Austrian economist Henry Hazlitt explains: “If there is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself”.[82] In other words, profits let companies know whether an item is worth producing. Theoretically, in free and competitive markets maximising profit ensures that resources are not wasted.

Private property

The relationship between the state, its formal mechanisms and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century. Hernando de Soto is a contemporary Peruvian economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in a formal property system where ownership and transactions are clearly recorded.[83]

According to de Soto, this is the process by which physical assets are transformed into capital, which in turn may be used in many more ways and much more efficiently in the market economy. A number of Marxian economists have argued that the Enclosure Acts in England and similar legislation elsewhere were an integral part of capitalist primitive accumulation and that specific legal frameworks of private land ownership have been integral to the development of capitalism.[84][85]

Market competition

In capitalist economics, market competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share and sales volume by varying the elements of the marketing mix: price, product, distribution and promotion. Merriam-Webster defines competition in business as “the effort of two or more parties acting independently to secure the business of a third party by offering the most favourable terms”.[86] It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly valued uses[87] and encouraging efficiency. Smith and other classical economists before Antoine Augustine Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium.[88] Competition is widespread throughout the market process. It is a condition where “buyers tend to compete with other buyers, and sellers tend to compete with other sellers”.[89] In offering goods for exchange, buyers competitively bid to purchase specific quantities of specific goods which are available, or might be available if sellers were to choose to offer such goods. Similarly, sellers bid against other sellers in offering goods on the market, competing for the attention and exchange resources of buyers. Competition results from scarcity—there is never enough to satisfy all conceivable human wants—and occurs “when people strive to meet the criteria that are being used to determine who gets what”.[89]

Economic growth

World’s GDP per capita shows exponential growth since the beginning of the Industrial Revolution[90]

Capitalism and the economy of the People’s Republic of China

Historically, capitalism has an ability to promote economic growth as measured by gross domestic product (GDP), capacity utilization or standard of living. This argument was central, for example, to Adam Smith’s advocacy of letting a free market control production and price and allocate resources. Many theorists have noted that this increase in global GDP over time coincides with the emergence of the modern world capitalist system.[91][92]

Between 1000 and 1820, the world economy grew sixfold, a faster rate than the population growth, so individuals enjoyed, on average, a 50% increase in income. Between 1820 and 1998, world economy grew 50-fold, a much faster rate than the population growth, so individuals enjoyed on average a 9-fold increase in income.[93] Over this period, in Europe, North America and Australasia the economy grew 19-fold per person, even though these regions already had a higher starting level; and in Japan, which was poor in 1820, the increase per person was 31-fold. In the Third World, there was an increase, but only 5-fold per person.[93]

As a mode of production

The capitalist mode of production refers to the systems of organising production and distribution within capitalist societies. Private money-making in various forms (renting, banking, merchant trade, production for profit and so on) preceded the development of the capitalist mode of production as such. The capitalist mode of production proper based on wage-labour and private ownership of the means of production and on industrial technology began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.[citation needed]

The term capitalist mode of production is defined by private ownership of the means of production, extraction of surplus value by the owning class for the purpose of capital accumulation, wage-based labour and at least as far as commodities are concerned being market-based.[94]

Capitalism in the form of money-making activity has existed in the shape of merchants and money-lenders who acted as intermediaries between consumers and producers engaging in simple commodity production (hence the reference to “merchant capitalism“) since the beginnings of civilisation. What is specific about the “capitalist mode of production” is that most of the inputs and outputs of production are supplied through the market (i.e. they are commodities) and essentially all production is in this mode.[10] For example, in flourishing feudalism most or all of the factors of production including labour are owned by the feudal ruling class outright and the products may also be consumed without a market of any kind, it is production for use within the feudal social unit and for limited trade.[73] This has the important consequence that the whole organisation of the production process is reshaped and re-organised to conform with economic rationality as bounded by capitalism, which is expressed in price relationships between inputs and outputs (wages, non-labour factor costs, sales and profits) rather than the larger rational context faced by society overall—that is, the whole process is organised and re-shaped in order to conform to “commercial logic”. Essentially, capital accumulation comes to define economic rationality in capitalist production.[74]

A society, region or nation is capitalist if the predominant source of incomes and products being distributed is capitalist activity, but even so this does not yet mean necessarily that the capitalist mode of production is dominant in that society.

Supply and demand

The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D): the diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product

In capitalist economic structures, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at the current price) will equal the quantity supplied by producers (at the current price), resulting in an economic equilibrium for price and quantity.

The four basic laws of supply and demand are:[95]:37

  1. If demand increases (demand curve shifts to the right) and supply remains unchanged, then a shortage occurs, leading to a higher equilibrium price.
  2. If demand decreases (demand curve shifts to the left) and supply remains unchanged, then a surplus occurs, leading to a lower equilibrium price.
  3. If demand remains unchanged and supply increases (supply curve shifts to the right), then a surplus occurs, leading to a lower equilibrium price.
  4. If demand remains unchanged and supply decreases (supply curve shifts to the left), then a shortage occurs, leading to a higher equilibrium price.

Graphical representation of supply and demand

Although it is normal to regard the quantity demanded and the quantity supplied as functions of the price of the goods, the standard graphical representation, usually attributed to Alfred Marshall, has price on the vertical axis and quantity on the horizontal axis, the opposite of the standard convention for the representation of a mathematical function.

Since determinants of supply and demand other than the price of the goods in question are not explicitly represented in the supply-demand diagram, changes in the values of these variables are represented by moving the supply and demand curves (often described as “shifts” in the curves). By contrast, responses to changes in the price of the good are represented as movements along unchanged supply and demand curves.

Supply schedule

A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied. Under the assumption of perfect competition, supply is determined by marginal cost. That is: firms will produce additional output while the cost of producing an extra unit of output is less than the price they would receive.

A hike in the cost of raw goods would decrease supply and shifting costs up while a discount would increase supply, shifting costs down and hurting producers as producer surplus decreases.

By its very nature, conceptualising a supply curve requires the firm to be a perfect competitor (i.e. to have no influence over the market price). This is true because each point on the supply curve is the answer to the question “If this firm is faced with this potential price, how much output will it be able to and willing to sell?”. If a firm has market power, its decision of how much output to provide to the market influences the market price, therefore the firm is not “faced with” any price and the question becomes less relevant.

Economists distinguish between the supply curve of an individual firm and between the market supply curve. The market supply curve is obtained by summing the quantities supplied by all suppliers at each potential price, thus in the graph of the supply curve individual firms’ supply curves are added horizontally to obtain the market supply curve.

Economists also distinguish the short-run market supply curve from the long-run market supply curve. In this context, two things are assumed constant by definition of the short run: the availability of one or more fixed inputs (typically physical capital) and the number of firms in the industry. In the long-run, firms can adjust their holdings of physical capital, enabling them to better adjust their quantity supplied at any given price. Furthermore, in the long-run potential competitors can enter or exit the industry in response to market conditions. For both of these reasons, long-run market supply curves are generally flatter than their short-run counterparts.

The determinants of supply are:

  1. Production costs: how much a goods costs to be produced. Production costs are the cost of the inputs; primarily labor, capital, energy and materials. They depend on the technology used in production and/or technological advances. See productivity.
  2. Firms’ expectations about future prices.
  3. Number of suppliers.

Demand schedule

A demand schedule, depicted graphically as the demand curve, represents the amount of some goods that buyers are willing and able to purchase at various prices, assuming all determinants of demand other than the price of the good in question, such as income, tastes and preferences, the price of substitute goods and the price of complementary goods, remain the same. According to the law of demand, the demand curve is almost always represented as downward-sloping, meaning that as price decreases, consumers will buy more of the good.[96]

Just like the supply curves reflect marginal cost curves, demand curves are determined by marginal utility curves.[97] Consumers will be willing to buy a given quantity of a good at a given price, if the marginal utility of additional consumption is equal to the opportunity cost determined by the price—that is, the marginal utility of alternative consumption choices. The demand schedule is defined as the willingness and ability of a consumer to purchase a given product in a given frame of time.

While the aforementioned demand curve is generally downward-sloping, there may be rare examples of goods that have upward-sloping demand curves. Two different hypothetical types of goods with upward-sloping demand curves are Giffen goods (an inferior, but staple good) and Veblen goods (goods made more fashionable by a higher price).

By its very nature, conceptualising a demand curve requires that the purchaser be a perfect competitor—that is, that the purchaser has no influence over the market price. This is true because each point on the demand curve is the answer to the question “If this buyer is faced with this potential price, how much of the product will it purchase?”. If a buyer has market power, so its decision of how much to buy influences the market price, then the buyer is not “faced with” any price and the question is meaningless.

Like with supply curves, economists distinguish between the demand curve of an individual and the market demand curve. The market demand curve is obtained by summing the quantities demanded by all consumers at each potential price, thus in the graph of the demand curve individuals’ demand curves are added horizontally to obtain the market demand curve.

The determinants of demand are:

  1. Income.
  2. Tastes and preferences.
  3. Prices of related goods and services.
  4. Consumers’ expectations about future prices and incomes that can be checked.
  5. Number of potential consumers.

Equilibrium

In the context of supply and demand, economic equilibrium refers to a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition equilibrium occurs at the point at which quantity demanded and quantity supplied are equal.[98] Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes and the quantity is called “competitive quantity” or market clearing quantity.

Partial equilibrium

Partial equilibrium, as the name suggests, takes into consideration only a part of the market to attain equilibrium.

Jain proposes (attributed to George Stigler): “A partial equilibrium is one which is based on only a restricted range of data, a standard example is price of a single product, the prices of all other products being held fixed during the analysis”.[99]

The supply and demand model is a partial equilibrium model of economic equilibrium, where the clearance on the market of some specific goods is obtained independently from prices and quantities in other markets. In other words, the prices of all substitutes and complements as well as income levels of consumers are constant. This makes analysis much simpler than in a general equilibrium model which includes an entire economy.

Here the dynamic process is that prices adjust until supply equals demand. It is a powerfully simple technique that allows one to study equilibrium, efficiency and comparative statics. The stringency of the simplifying assumptions inherent in this approach make the model considerably more tractable, but it may produce results which while seemingly precise do not effectively model real world economic phenomena.

Partial equilibrium analysis examines the effects of policy action in creating equilibrium only in that particular sector or market which is directly affected, ignoring its effect in any other market or industry assuming that they being small will have little impact if any.

Hence this analysis is considered to be useful in constricted markets.

Léon Walras first formalised the idea of a one-period economic equilibrium of the general economic system, but it was French economist Antoine Augustin Cournot and English political economist Alfred Marshall who developed tractable models to analyse an economic system.

Empirical estimation

Demand and supply relations in a market can be statistically estimated from price, quantity and other data with sufficient information in the model. This can be done with simultaneous-equation methods of estimation in econometrics. Such methods allow solving for the model-relevant “structural coefficients”, the estimated algebraic counterparts of the theory. The parameter identification problem is a common issue in “structural estimation”. Typically, data on exogenous variables (that is, variables other than price and quantity, both of which are endogenous variables) are needed to perform such an estimation. An alternative to “structural estimation” is reduced-form estimation, which regresses each of the endogenous variables on the respective exogenous variables.

Macroeconomic uses of demand and supply

Demand and supply have also been generalised to explain macroeconomic variables in a market economy, including the quantity of total output and the general price level. The Aggregate Demand–Aggregate Supply model may be the most direct application of supply and demand to macroeconomics, but other macroeconomic models also use supply and demand. Compared to microeconomic uses of demand and supply, different (and more controversial) theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply. Demand and supply are also used in macroeconomic theory to relate money supply and money demand to interest rates and to relate labor supply and labor demand to wage rates.

History

According to Hamid S. Hosseini, the power of supply and demand was understood to some extent by several early Muslim scholars, such as fourteenth-century Mamluk scholar Ibn Taymiyyah, who wrote: “If desire for goods increases while its availability decreases, its price rises. On the other hand, if availability of the good increases and the desire for it decreases, the price comes down”.[100]

John Locke‘s 1691 work Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money[101] includes an early and clear description of supply and demand and their relationship. In this description, demand is rent: “The price of any commodity rises or falls by the proportion of the number of buyer and sellers” and “that which regulates the price… [of goods] is nothing else but their quantity in proportion to their rent”.

The phrase “supply and demand” was first used by James Denham-Steuart in his Inquiry into the Principles of Political Economy, published in 1767. Adam Smith used the phrase in his 1776 book The Wealth of Nations, and David Ricardo titled one chapter of his 1817 work Principles of Political Economy and Taxation “On the Influence of Demand and Supply on Price”.[102]

In The Wealth of Nations, Smith generally assumed that the supply price was fixed, but that its “merit” (value) would decrease as its “scarcity” increased, in effect what was later called the law of demand also. In Principles of Political Economy and Taxation, Ricardo more rigorously laid down the idea of the assumptions that were used to build his ideas of supply and demand. Antoine Augustin Cournot first developed a mathematical model of supply and demand in his 1838 Researches into the Mathematical Principles of Wealth, including diagrams.

During the late 19th century, the marginalist school of thought emerged. This field mainly was started by Stanley Jevons, Carl Menger and Léon Walras. The key idea was that the price was set by the most expensive price—that is, the price at the margin. This was a substantial change from Adam Smith’s thoughts on determining the supply price.

In his 1870 essay “On the Graphical Representation of Supply and Demand”, Fleeming Jenkin in the course of “introduc[ing] the diagrammatic method into the English economic literature” published the first drawing of supply and demand curves therein,[103] including comparative statics from a shift of supply or demand and application to the labor market.[104] The model was further developed and popularized by Alfred Marshall in the 1890 textbook Principles of Economics.[102]

Role of government

In a capitalist system, the government does not prohibit private property or prevent individuals from working where they please. The government does not prevent firms from determining what wages they will pay and what prices they will charge for their products. However, many countries have minimum wage laws and minimum safety standards.

Under some versions of capitalism, the government carries out a number of economic functions, such as issuing money, supervising public utilities and enforcing private contracts. Many countries have competition laws that prohibit monopolies and cartels from forming. Despite anti-monopoly laws, large corporations can form near-monopolies in some industries. Such firms can temporarily drop prices and accept losses to prevent competition from entering the market and then raise them again once the threat of entry is reduced. In many countries, public utilities (e.g. electricity, heating fuel and communications) are able to operate as a monopoly under government regulation due to high economies of scale.

Government agencies regulate the standards of service in many industries, such as airlines and broadcasting as well as financing a wide range of programs. In addition, the government regulates the flow of capital and uses financial tools such as the interest rate to control factors such as inflation and unemployment.[105]

Relationship to political freedom

In his book The Road to Serfdom, Friedrich Hayek asserts that the economic freedom of capitalism is a requisite of political freedom. He argues that the market mechanism is the only way of deciding what to produce and how to distribute the items without using coercion. Milton Friedman, Andrew Brennan and Ronald Reagan also promoted this view. Friedman claimed that centralized economic operations are always accompanied by political repression. In his view, transactions in a market economy are voluntary and that the wide diversity that voluntary activity permits is a fundamental threat to repressive political leaders and greatly diminish their power to coerce. Some of Friedman’s views were shared by John Maynard Keynes, who believed that capitalism is vital for freedom to survive and thrive.[106][107] Freedom House, an American think tank that conducts international research on and advocates for, democracy, political freedom and human rights, has argued “there is a high and statistically significant correlation between the level of political freedom as measured by Freedom House and economic freedom as measured by the Wall Street Journal/Heritage Foundation survey“.[108]

Types of capitalism

There are many variants of capitalism in existence that differ according to country and region. They vary in their institutional makeup and by their economic policies. The common features among all the different forms of capitalism is that they are based on the production of goods and services for profit, predominantly market-based allocation of resources and they are structured upon the accumulation of capital. The major forms of capitalism are listed hereafter:

Advanced capitalism

Advanced capitalism is the situation that pertains to a society in which the capitalist model has been integrated and developed deeply and extensively for a prolonged period. Various writers identify Antonio Gramsci as an influential early theorist of advanced capitalism, even if he did not use the term himself. In his writings, Gramsci sought to explain how capitalism had adapted to avoid the revolutionary overthrow that had seemed inevitable in the 19th century. At the heart of his explanation was the decline of raw coercion as a tool of class power, replaced by use of civil society institutions to manipulate public ideology in the capitalists’ favour.[109][110][111]

Jürgen Habermas has been a major contributor to the analysis of advanced-capitalistic societies. Habermas observed four general features that characterise advanced capitalism:

  • Concentration of industrial activity in a few large firms.
  • Constant reliance on the state to stabilise the economic system.
  • A formally democratic government that legitimises the activities of the state and dissipates opposition to the system.
  • The use of nominal wage increases to pacify the most restless segments of the work force.[112]

Finance capitalism

In their critique of capitalism, Marxism and Leninism both emphasise the role of “finance capital” as the determining and ruling-class interest in capitalist society, particularly in the latter stages.[113][114]

Rudolf Hilferding is credited[by whom?] with first bringing the term “finance capitalism” into prominence through Finance Capital, his 1910 study of the links between German trusts, banks and monopolies—a study subsumed by Vladimir Lenin into Imperialism, the Highest Stage of Capitalism (1917), his analysis of the imperialist relations of the great world powers.[115] Lenin concluded that the banks at that time operated as “the chief nerve centres of the whole capitalist system of national economy”.[116] For the Comintern (founded in 1919), the phrase “dictatorship of finance capitalism”[117] became a regular one.

Fernnand Braudel would later point to two earlier periods when finance capitalism had emerged in human history—with the Genoese in the 16th century and with the Dutch in the 17th and 18th centuries—although at those points it developed from commercial capitalism.[118][need quotation to verify] Giovanni Arrighi extended Braudel’s analysis to suggest that a predominance of finance capitalism is a recurring, long-term phenomenon, whenever a previous phase of commercial/industrial capitalist expansion reaches a plateau.[119]

Mercantilism

The subscription room at Lloyd’s of London in the early 19th century

Mercantilism is a nationalist form of early capitalism that came into existence approximately in the late 16th century. It is characterized by the intertwining of national business interests to state-interest and imperialism; and consequently, the state apparatus is utilized to advance national business interests abroad. An example of this is colonists living in America who were only allowed to trade with and purchase goods from their respective mother countries (e.g. Britain, Portugal and France). Mercantilism was driven by the belief that the wealth of a nation is increased through a positive balance of trade with other nations—it corresponds to the phase of capitalist development sometimes called the primitive accumulation of capital.

Free market economy

Free market economy refers to a capitalist economic system where prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy. It typically entails support for highly competitive markets and private ownership of productive enterprises. Laissez-faire is a more extensive form of free market economy where the role of the state is limited to protecting property rights, or for plumbline anarcho-capitalists, property rights are protected by private firms and market-generated law.

Social market economy

A social market economy is a nominally free market system where government intervention in price formation is kept to a minimum, but the state provides significant services in the area of social security, unemployment benefits and recognition of labor rights through national collective bargaining arrangements. This model is prominent in Western and Northern European countries as well as Japan, albeit in slightly different configurations. The vast majority of enterprises are privately owned in this economic model.

Rhine capitalism refers to the contemporary model of capitalism and adaptation of the social market model that exists in continental Western Europe today.

State capitalism

State capitalism is a capitalist market economy dominated by state-owned enterprises, where the state enterprises are organized as commercial, profit-seeking businesses. The designation has been used broadly throughout the 20th century to designate a number of different economic forms, ranging from state-ownership in market economies to the command economies of the former Eastern Bloc. According to Aldo Musacchio, a professor at Harvard Business School, state capitalism is a system in which governments, whether democratic or autocratic, exercise a widespread influence on the economy either through direct ownership or various subsidies. Musacchio notes a number of differences between today’s state capitalism and its predecessors. In his opinion, gone are the days when governments appointed bureaucrats to run companies: the world’s largest state-owned enterprises are now traded on the public markets and kept in good health by large institutional investors. Contemporary state capitalism is associated with the East Asian model of capitalism, dirigisme and the economy of Norway.[120] Alternatively, Merriam-Webster defines state capitalism as “an economic system in which private capitalism is modified by a varying degree of government ownership and control”.[121]

In Socialism: Utopian and Scientific, Friedrich Engels argued that state-owned enterprises would characterize the final stage of capitalism, consisting of ownership and management of large-scale production and communication by the bourgeois state.[122] In his writings, Vladimir Lenin characterized the economy of Soviet Russia as state capitalist, believing state capitalism to be an early step toward the development of socialism.[123][124]

Some economists and left-wing academics including Richard D. Wolff and Noam Chomsky argue that the economies of the former Soviet Union and Eastern bloc represented a form of state capitalism because their internal organization within enterprises and the system of wage labor remained intact.[125][126][127]

The term is not used by Austrian School economists to describe state ownership of the means of production. The economist Ludwig von Mises argued that the designation of “state capitalism” was simply a new label for the old labels of “state socialism” and “planned economy” and differed only in non-essentials from these earlier designations.[128]

The debate between proponents of private versus state capitalism is centered around questions of managerial efficacy, productive efficiency and fair distribution of wealth.

Corporate capitalism

Corporate capitalism is a free or mixed-market economy characterized by the dominance of hierarchical, bureaucratic corporations.

Mixed economy

A mixed economy is a largely market-based economy consisting of both private and public ownership of the means of production and economic interventionism through macroeconomic policies intended to correct market failures, reduce unemployment and keep inflation low. The degree of intervention in markets varies among different countries. Some mixed economies, such as France under dirigisme, also featured a degree of indirect economic planning over a largely capitalist-based economy.

Most modern capitalist economies are defined as “mixed economies” to some degree.[citation needed]

Others

Other variants of capitalism include:

Capital accumulation

The accumulation of capital is the process of “making money”, or growing an initial sum of money through investment in production. Capitalism is based on the accumulation of capital, whereby financial capital is invested in order to make a profit and then reinvested into further production in a continuous process of accumulation. In Marxian economic theory, this dynamic is called the law of value. Capital accumulation forms the basis of capitalism, where economic activity is structured around the accumulation of capital, defined as investment in order to realize a financial profit.[129] In this context, “capital” is defined as money or a financial asset invested for the purpose of making more money (whether in the form of profit, rent, interest, royalties, capital gain or some other kind of return).[130]

In mainstream economics, accounting and Marxian economics, capital accumulation is often equated with investment of profit income or saving, especially in real capital goods. The concentration and centralisation of capital are two of the results of such accumulation. In modern macroeconomics and econometrics, the phrase “capital formation” is often used in preference to “accumulation”, though the United Nations Conference on Trade and Development (UNCTAD) refers nowadays to “accumulation”. The term “accumulation” is occasionally used in national accounts.

Background

Accumulation can be measured as the monetary value of investments, the amount of income that is reinvested, or as the change in the value of assets owned (the increase in the value of the capital stock). Using company balance sheets, tax data and direct surveys as a basis, government statisticians estimate total investments and assets for the purpose of national accounts, national balance of payments and flow of funds statistics. The Reserve Banks and the Treasury usually provide interpretations and analysis of this data. Standard indicators include capital formation, gross fixed capital formation, fixed capital, household asset wealth and foreign direct investment.

Organisations such as the International Monetary Fund, the UNCTAD, the World Bank Group, the OECD and the Bank for International Settlements used national investment data to estimate world trends. The Bureau of Economic Analysis, Eurostat and the Japan Statistical Office provide data on the United States, Europe and Japan respectively. Other useful sources of investment information are business magazines such as Fortune, Forbes, The Economist, Business Week and so on as well as various corporate “watchdog” organisations and non-governmental organisation publications. A reputable scientific journal is the Review of Income & Wealth. In the case of the United States, the “Analytical Perspectives” document (an annex to the yearly budget) provides useful wealth and capital estimates applying to the whole country.

In Karl Marx‘ economic theory, capital accumulation refers to the operation whereby profits are reinvested increasing the total quantity of capital. Capital is viewed by Marx as expanding value, that is, in other terms, as a sum of capital, usually expressed in money, that is transformed through human labor into a larger value, extracted as profits and expressed as money. Here, capital is defined essentially as economic or commercial asset value in search of additional value or surplus-value. This requires property relations which enable objects of value to be appropriated and owned, and trading rights to be established. Capital accumulation has a double origin, namely in trade and in expropriation, both of a legal or illegal kind. The reason is that a stock of capital can be increased through a process of exchange or “trading up”, but also through directly taking an asset or resource from someone else without compensation. David Harvey calls this accumulation by dispossession.

The continuation and progress of capital accumulation depends on the removal of obstacles to the expansion of trade and this has historically often been a violent process. As markets expand, more and more new opportunities develop for accumulating capital because more and more types of goods and services can be traded in. However, capital accumulation may also confront resistance when people refuse to sell, or refuse to buy (for example a strike by investors or workers, or consumer resistance).

Concentration and centralisation

According to Marx, capital has the tendency for concentration and centralization in the hands of the wealthy. Marx explains: “It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. […] Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. […] The battle of competition is fought by cheapening of commodities. The cheapness of commodities demands, caeteris paribus, on the productiveness of labour, and this again on the scale of production. Therefore, the larger capitals beat the smaller. It will further be remembered that, with the development of the capitalist mode of production, there is an increase in the minimum amount of individual capital necessary to carry on a business under its normal conditions. The smaller capitals, therefore, crowd into spheres of production which Modern Industry has only sporadically or incompletely got hold of. Here competition rages […] It always ends in the ruin of many small capitalists, whose capitals partly pass into the hands of their conquerors, partly vanish”.[131]

The rate of accumulation

In Marxian economics, the rate of accumulation is defined as (1) the value of the real net increase in the stock of capital in an accounting period; and (2) the proportion of realised surplus-value or profit-income which is reinvested, rather than consumed. This rate can be expressed by means of various ratios between the original capital outlay, the realised turnover, surplus-value or profit and reinvestments (e.g. the writings of the economist Michał Kalecki).

Other things being equal, the greater the amount of profit-income that is disbursed as personal earnings and used for consumptive purposes, the lower the savings rate and the lower the rate of accumulation is likely to be. However, earnings spent on consumption can also stimulate market demand and higher investment. This is the cause of endless controversies in economic theory about “how much to spend, and how much to save”.

In a boom period of capitalism, the growth of investments is cumulative, i.e. one investment leads to another, leading to a constantly expanding market, an expanding labor force and an increase in the standard of living for the majority of the people.[citation needed]

In a stagnating, decadent capitalism, the accumulation process is increasingly oriented towards investment on military and security forces, real estate, financial speculation and luxury consumption. In that case, income from value-adding production will decline in favour of interest, rent and tax income, with as a corollary an increase in the level of permanent unemployment. The more capital one owns, the more capital one can also borrow. The inverse is also true and this is one factor in the widening gap between the rich and the poor.[citation needed]

Ernest Mandel emphasised that the rhythm of capital accumulation and growth depended critically on (1) the division of a society’s social product between “necessary product” and “surplus product“; and (2) the division of the surplus product between investment and consumption. In turn, this allocation pattern reflected the outcome of competition among capitalists, competition between capitalists and workers and competition between workers. The pattern of capital accumulation can therefore never be simply explained by commercial factors as it also involved social factors and power relationships.

The circuit of capital accumulation from production

Strictly speaking, capital has accumulated only when realised profit income has been reinvested in capital assets. As suggested in the first volume of Marx’ Das Kapital, the process of capital accumulation in production has at least seven distinct but linked moments:

  • The initial investment of capital (which could be borrowed capital) in means of production and labor power.
  • The command over surplus-labour and its appropriation.
  • The valorisation (increase in value) of capital through production of new outputs.
  • The appropriation of the new output produced by employees, containing the added value.
  • The realisation of surplus-value through output sales.
  • The appropriation of realised surplus-value as (profit) income after deduction of costs.
  • The reinvestment of profit income in production.

All of these moments do not refer simply to an “economic” or commercial process. Rather, they assume the existence of legal, social, cultural and economic power conditions, without which creation, distribution and circulation of the new wealth could not occur. This becomes especially clear when the attempt is made to create a market where none exists, or where people refuse to trade.

Simple and expanded reproduction

In the second volume of Das Kapital, Marx continues the story and shows that with the aid of bank credit capital in search of growth can more or less smoothly mutate from one form to another, alternately taking the form of money capital (liquid deposits, securities and so on), commodity capital (tradable products, real estate and the like), or production capital (means of production and labor power).

His discussion of the simple and expanded reproduction of the conditions of production offers a more sophisticated model of the parameters of the accumulation process as a whole. At simple reproduction, a sufficient amount is produced to sustain society at the given living standard; the stock of capital stays constant. At expanded reproduction, more product-value is produced than is necessary to sustain society at a given living standard (a surplus product); the additional product-value is available for investments which enlarge the scale and variety of production.

The bourgeois claim there is no economic law according to which capital is necessarily re-invested in the expansion of production, that such depends on anticipated profitability, market expectations and perceptions of investment risk. Such statements only explain the subjective experiences of investors and ignore the objective realities which would influence such opinions. As Marx states in the second volume of Das Kapital, simple reproduction only exists if the variable and surplus capital realised by Dept. 1—producers of means of production—exactly equals that of the constant capital of Dept. 2, producers of articles of consumption (p. 524). Such equilibrium rests on various assumptions, such as a constant labor supply (no population growth). Accumulation does not imply a necessary change in total magnitude of value produced, but can simply refer to a change in the composition of an industry (p. 514).

Ernest Mandel introduced the additional concept of contracted economic reproduction, i.e. reduced accumulation where business operating at a loss outnumbers growing business, or economic reproduction on a decreasing scale, for example due to wars, natural disasters or devalorisation.

Balanced economic growth requires that different factors in the accumulation process expand in appropriate proportions. However, markets themselves cannot spontaneously create that balance and in fact what drives business activity is precisely the imbalances between supply and demand: inequality is the motor of growth. This partly explains why the worldwide pattern of economic growth is very uneven and unequal, even although markets have existed almost everywhere for a very long-time. Some people argue that it also explains government regulation of market trade and protectionism.

Capital accumulation as social relation

“Accumulation of capital” sometimes also refers in Marxist writings to the reproduction of capitalist social relations (institutions) on a larger scale over time, i.e. the expansion of the size of the proletariat and of the wealth owned by the bourgeoisie.

This interpretation emphasises that capital ownership, predicated on command over labor, is a social relation: the growth of capital implies the growth of the working class (a “law of accumulation“). In the first volume of Das Kapital, Marx had illustrated this idea with reference to Edward Gibbon Wakefield‘s theory of colonisation:

Wakefield discovered that in the Colonies, property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative—the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things. Mr. Peel, he moans, took with him from England to Swan River, West Australia, means of subsistence and of production to the amount of £50,000. Mr. Peel had the foresight to bring with him, besides, 3,000 persons of the working-class, men, women, and children. Once arrived at his destination, ‘Mr. Peel was left without a servant to make his bed or fetch him water from the river.’ Unhappy Mr. Peel, who provided for everything except the export of English modes of production to Swan River!

— Das Kapital, vol. 1, ch. 33

In the third volume of Das Kapital, Marx refers to the “fetishism of capital” reaching its highest point with interest-bearing capital because now capital seems to grow of its own accord without anybody doing anything:

The relations of capital assume their most externalised and most fetish-like form in interest-bearing capital. We have here M − M ′ {\displaystyle M-M’} , money creating more money, self-expanding value, without the process that effectuates these two extremes. In merchant’s capital, M − C − M ′ {\displaystyle M-C-M’} , there is at least the general form of the capitalistic movement, although it confines itself solely to the sphere of circulation, so that profit appears merely as profit derived from alienation; but it is at least seen to be the product of a social relation, not the product of a mere thing. […] This is obliterated in M − M ′ {\displaystyle M-M’} , the form of interest-bearing capital. […] The thing (money, commodity, value) is now capital even as a mere thing, and capital appears as a mere thing. The result of the entire process of reproduction appears as a property inherent in the thing itself. It depends on the owner of the money, i.e., of the commodity in its continually exchangeable form, whether he wants to spend it as money or loan it out as capital. In interest-bearing capital, therefore, this automatic fetish, self-expanding value, money generating money, are brought out in their pure state and in this form it no longer bears the birth-marks of its origin. The social relation is consummated in the relation of a thing, of money, to itself. Instead of the actual transformation of money into capital, we see here only form without content.

— Das Kapital, vol. 1, ch. 24

Wage labour

An industrial worker amidst heavy steel semi-products (Kinex Bearings, Bytča, Slovakia, c. 1995–2000)

Wage labour refers to the sale of labour under a formal or informal employment contract to an employer.[132] These transactions usually occur in a labour market where wages are market determined.[133] Individuals who possess and supply financial capital or labor to productive ventures often become owners, either jointly (as shareholders) or individually. In Marxist economics, these owners of the means of production and suppliers of capital are generally called capitalists. The description of the role of the capitalist has shifted, first referring to a useless intermediary between producers to an employer of producers and eventually came to refer to owners of the means of production.[134] Labor includes all physical and mental human resources, including entrepreneurial capacity and management skills, which are needed to produce products and services. Production is the act of making goods or services by applying labor power.[135][136]

Critics of the capitalist mode of production see wage labour as a major, if not defining, aspect of hierarchical industrial systems. Most opponents of the institution support worker self-management and economic democracy as alternatives to both wage labour and to capitalism. While most opponents of the wage system blame the capitalist owners of the means of production for its existence, most anarchists and other libertarian socialists also hold the state as equally responsible as it exists as a tool utilised by capitalists to subsidise themselves and protect the institution of private ownership of the means of production. As some opponents of wage labour take influence from Marxist propositions, many are opposed to private property, but maintain respect for personal property.

Types

The most common form of wage labour currently is ordinary direct, or “full-time”, employment in which a free worker sells his or her labour for an indeterminate time (from a few years to the entire career of the worker) in return for a money-wage or salary and a continuing relationship with the employer which it does not in general offer contractors or other irregular staff. However, wage labour takes many other forms and explicit as opposed to implicit (i.e. conditioned by local labour and tax law) contracts are not uncommon. Economic history shows a great variety of ways in which labour is traded and exchanged. The differences show up in the form of:

  • Employment status: a worker could be employed full-time, part-time, or on a casual basis. He or she could be employed for example temporarily for a specific project only, or on a permanent basis. Part-time wage labour could combine with part-time self-employment. The worker could be employed also as an apprentice.
  • Civil (legal) status: the worker could for example be a free citizen, an indentured labourer, the subject of forced labour (including some prison or army labour); a worker could be assigned by the political authorities to a task, they could be a semi-slave or a serf bound to the land who is hired out part of the time. So the labour might be performed on a more or less voluntary basis, or on a more or less involuntary basis, in which there are many gradations.
  • Method of payment (remuneration or compensation): the work done could be paid “in cash” (a money-wage) or “in kind” (through receiving goods and/or services), or in the form of “piece rates” where the wage is directly dependent on how much the worker produces. In some cases, the worker might be paid in the form of credit used to buy goods and services, or in the form of stock options or shares in an enterprise.
  • Method of hiring: the worker might engage in a labour-contract on his or her own initiative, or he or she might hire out their labour as part of a group. However, he or she may also hire out their labour via an intermediary (such as an employment agency) to a third party. In this case, he or she is paid by the intermediary, but works for a third party which pays the intermediary. In some cases, labour is subcontracted several times, with several intermediaries. Another possibility is that the worker is assigned or posted to a job by a political authority, or that an agency hires out a worker to an enterprise together with the means of production.

Effects of war

The common view among economic historians is that the Great Depression ended with the advent of World War II (assembling the North American B-25 Mitchell at Kansas City, 1942)

War typically causes the diversion, destruction and creation of capital assets as capital assets are both destroyed or consumed and diverted to types of production needed to fight the war. Many assets are wasted and in some few cases created specifically to fight a war. War driven demands may be a powerful stimulus for the accumulation of capital and production capability in limited areas and market expansion outside the immediate theatre of war. Often this has induced laws against perceived and real war profiteering.

The total hours worked in the United States rose by 34 percent during World War II, even though the military draft reduced the civilian labor force by 11 percent.[137]

War destruction can be illustrated by looking at World War II. Industrial war damage was heaviest in Japan, where 1/4 of factory buildings and 1/3 of plant and equipment were destroyed; 1/7 of electric power-generating capacity was destroyed and 6/7 of oil refining capacity. The Japanese merchant fleet lost 80% of their ships. In Germany in 1944, when air attacks were heaviest, 6.5% of machine tools were damaged or destroyed, but around 90% were later repaired. About 10% of steel production capacity was lost. In Europe, the United States and the Soviet Union enormous resources were accumulated and ultimately dissipated as planes, ships, tanks and so on were built and then lost or destroyed.

Germany’s total war damage was estimated at about 17.5% of the pre-war total capital stock by value, i.e. about 1/6. In the Berlin area alone, there were 8 million refugees lacking basic necessities. In 1945, less than 10% of the railways were still operating. 2,395 rail bridges were destroyed and a total of 7,500 bridges, 10,000 locomotives and more than 100,000 goods wagons were destroyed. Less than 40% of the remaining locomotives were operational.

However, by the first quarter of 1946 European rail traffic, which was given assistance and preferences (by Western appointed military governors) for resources and material as an essential asset, regained its prewar operational level. At the end of the year, 90% of Germany’s railway lines were operating again. In retrospect, the rapidity of infrastructure reconstruction appears astonishing.

Initially, in May 1945 newly installed United States president Harry S. Truman‘s directive had been that no steps would be taken towards economic rehabilitation of Germany. In fact, the initial industry plan of 1946 prohibited production in excess of half of the 1938 level; the iron and steel industry was allowed to produce only less than a third of pre-war output. These plans were rapidly revised and better plans were instituted. In 1946, over 10% of Germany’s physical capital stock (plant and equipment) was also dismantled and confiscated, most of it going to the Soviet Union. By 1947, industrial production in Germany was at 1/3 of the 1938 level and industrial investment at about 1/2 the 1938 level.

The first big strike-wave in the Ruhr occurred in early 1947—it was about food rations and housing, but soon there were demands for nationalisation. However, the United States appointed military governor (Newman) stated at the time that he had the power to break strikes by withholding food rations. The clear message was “no work, no eat”. As the military controls in Western Germany were nearly all relinquished and the Germans were allowed to rebuild their own economy with Marshall Plan aid things rapidly improved. By 1951, German industrial production had overtaken the prewar level. The Marshall Aid funds were important, but after the currency reform (which permitted German capitalists to revalue their assets) and the establishment of a new political system much more important was the commitment of the United States to rebuilding German capitalism and establishing a free market economy and government, rather than keeping Germany in a weak position. Initially, average real wages remained low, lower even than in 1938, until the early 1950s while profitability was unusually high. So the total investment fund, aided by credits, was also high, resulting in a high rate of capital accumulation which was nearly all reinvested in new construction or new tools. This was called the German economic miracle or Wirtschaftswunder.[138]

In Italy, the victorious Allies did three things in 1945: they imposed their absolute military authority; they quickly disarmed the Italian partisans from a very large stock of weapons; and they agreed to a state guarantee of wage payments as well as a veto on all sackings of workers from their jobs.[139] Although the Italian Communist Party grew very large immediately after the war ended—it achieved a membership of 1.7 million people in a population of 45 million—it was outmaneuvered through a complicated political battle by the Christian Democrats after three years.[140] In the 1950s, an economic boom began in Italy, at first fueled by internal demand and then also by exports.[141]

In modern times, it has often been possible to rebuild physical capital assets destroyed in wars completely within the space of about 10 years, except in cases of severe pollution by chemical warfare or other kinds of irreparable devastation. However, damage to human capital has been much more devastating in terms of fatalities (in the case of World War II, about 55 million deaths), permanent physical disability, enduring ethnic hostility and psychological injuries which have effects for at least several generations.

Criticism

Critics of capitalism associate the economic system with social inequality; unfair distribution of wealth and power; materialism; repression of workers and trade unionists; social alienation; economic inequality; unemployment; and economic instability. Many socialists consider capitalism to be irrational in that production and the direction of the economy are unplanned, creating many inconsistencies and internal contradictions.[142] Capitalism and individual property rights have been associated with the tragedy of the anticommons where owners are unable to agree. Marxian economist Richard D. Wolff postulates that capitalist economies prioritize profits and capital accumulation over the social needs of communities and capitalist enterprises rarely include the workers in the basic decisions of the enterprise.[143] Democratic socialists argue that the role of the state in a capitalist society is to defend the interests of the bourgeoisie.[144] These states take actions to implement such things as unified national markets, national currencies and customs system.[144] Capitalism and capitalist governments have also been criticized as oligarchic in nature[145][146][147] due to the inevitable inequality[148][149] characteristic of economic progress.[150][151]

Some labor historians and scholars have argued that unfree labor—by slaves, indentured servants, prisoners or other coerced persons—is compatible with capitalist relations. Tom Brass argued that unfree labor is acceptable to capital.[152][153] Historian Greg Grandin argues that capitalism has its origins in slavery, saying that “[w]hen historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery.”[154] Some historians, including Edward E. Baptist and Sven Beckert, assert that slavery was an integral component in the violent development of American and global capitalism.[155][156] The Slovenian continental philosopher Slavoj Žižek posits that the new era of global capitalism has ushered in new forms of contemporary slavery, including migrant workers deprived of basic civil rights on the Arabian Peninsula, the total control of workers in Asian sweatshops, and the use of forced labor in the exploitation of natural resources in Central Africa.[157]

According to Immanuel Wallerstein, institutional racism has been “one of the most significant pillars” of the capitalist system and serves as “the ideological justification for the hierarchization of the work-force and its highly unequal distributions of reward”.[158]

Many aspects of capitalism have come under attack from the anti-globalization movement, which is primarily opposed to corporate capitalism. Environmentalists have argued that capitalism requires continual economic growth and that it will inevitably deplete the finite natural resources of Earth and cause mass extinctions of animal and plant life.[159][160][161] Such critics argue that while neoliberalism, the ideological backbone of contemporary globalized capitalism, has indeed increased global trade, it has also destroyed traditional ways of life, exacerbated inequality and increased global poverty—with more living today in abject poverty than before neoliberalism and that environmental indicators indicate massive environmental degradation since the late 1970s.[22][162][163][164]

Some scholars blame the financial crisis of 2007–2008 on the neoliberal capitalist model.[171] Following the banking crisis of 2007, Alan Greenspan told the United States Congress on 23 October 2008 that “[t]his modern risk-management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year”,[172] and that “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in firms […] I was shocked”.[173]

Many religions have criticized or opposed specific elements of capitalism. Traditional Judaism, Christianity, and Islam forbid lending money at interest,[174][175] although alternative methods of banking have been developed. Some Christians have criticized capitalism for its materialist aspects and its inability to account for the wellbeing of all people.[176] Many of Jesus’ parables deal with economic concerns: farming, shepherding, being in debt, doing hard labor, being excluded from banquets and the houses of the rich and have implications for wealth and power distribution.[177][178] Catholic scholars and clergy have often criticized capitalism because of its disenfranchisement of the poor, often promoting distributism as an alternative. In his 84-page apostolic exhortation Evangelii gaudium, Catholic Pope Francis described unfettered capitalism as “a new tyranny” and called on world leaders to fight rising poverty and inequality:[179]

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.[180]

Proponents of capitalism argue that it creates more prosperity than any other economic system and that its benefits are mainly to the ordinary person.[181] Critics of capitalism variously associate it with economic instability,[182] an inability to provide for the well-being of all people[183] and an unsustainable danger to the natural environment.[159] Socialists maintain that although capitalism is superior to all previously existing economic systems (such as feudalism or slavery), the contradiction between class interests will only be resolved by advancing into a completely new social system of production and distribution in which all persons have an equal relationship to the means of production.[184]

The term capitalism in its modern sense is often attributed to Karl Marx.[42][185] In his Das Kapital, Marx analyzed the “capitalist mode of production” using a method of understanding today known as Marxism. However, Marx himself rarely used the term “capitalism” while it was used twice in the more political interpretations of his work, primarily authored by his collaborator Friedrich Engels. In the 20th century, defenders of the capitalist system often replaced the term capitalism with phrases such as free enterprise and private enterprise and replaced capitalist with rentier and investor in reaction to the negative connotations associated with capitalism.[134]

The profit motive

The majority of criticisms against the profit motive centre on the idea that the profit motive encourages selfishness and greed, rather than serve the public good or necessarily creating an increase in net wealth. Critics of the profit motive contend that companies disregard morals or public safety in the pursuit of profits.[186][187][188][189]

Free market economists counter that the profit motive, coupled with competition, actually reduces the final price of an item for consumption, rather than raising it. They argue that businesses profit by selling a good at a lower price and at a greater volume than the competition. Economist Thomas Sowell uses supermarkets as an example to illustrate this point: “It has been estimated that a supermarket makes a clear profit of about a penny on a dollar of sales. If that sounds pretty skimpy, remember that it is collecting that penny on every dollar at several cash registers simultaneously and, in many cases, around the clock”.[190]

American economist Milton Friedman has argued that greed and self-interest are universal human traits. On a 1979 episode of The Phil Donahue Show, Friedman states: “The world runs on individuals pursuing their separate interests”. He continues by explaining that only in capitalist countries, where individuals can pursue their own self-interest, people have been able to escape from “grinding poverty”.[191]

Comparison to slavery

Pinkerton guards escort strikebreakers in Buchtel, Ohio, 1884

Wage labor has long been compared to slavery.[192][193][194][195] As a result, the phrase “wage slavery” is often utilized as a pejorative for wage labor.[196] Similarly, advocates of slavery looked upon the “comparative evils of Slave Society and of Free Society, of slavery to human Masters and slavery to Capital”[197] and proceeded to argue that wage slavery was actually worse than chattel slavery.[198] Slavery apologists like George Fitzhugh contended that workers only accepted wage labor with the passage of time as they became “familiarised and inattentive to the infected social atmosphere they continually inhale”.[197] Scholars have debated the exact relationship between wage labor, slavery, and capitalism at length, especially for the Antebellum South.[199]

Similarities between wage labor and slavery were noted as early as Cicero in Ancient Rome, such as in De Officiis.[200] With the advent of the Industrial Revolution, thinkers such as Pierre-Joseph Proudhon and Karl Marx elaborated the comparison between wage labor and slavery in the context of a critique of societal property not intended for active personal use[201][202] while Luddites emphasized the dehumanisation brought about by machines. Before the American Civil War, Southern defenders of African American slavery invoked the concept of wage slavery to favorably compare the condition of their slaves to workers in the North.[203][204] The United States abolished slavery during the Civil War, but labor union activists found the metaphor useful. According to Lawrence Glickman, in the Gilded Age “references abounded in the labor press, and it is hard to find a speech by a labour leader without the phrase”.[205]

The slave, together with his labour-power, was sold to his owner once for all. […] The [wage] labourer, on the other hand, sells his very self, and that by fractions. […] He [belongs] to the capitalist class; and it is for him […] to find a buyer in this capitalist class.[206]

Karl Marx

According to Noam Chomsky, analysis of the psychological implications of wage slavery goes back to the Enlightenment era. In his 1791 book On the Limits of State Action, liberal thinker Wilhelm von Humboldt explained how “whatever does not spring from a man’s free choice, or is only the result of instruction and guidance, does not enter into his very nature; he does not perform it with truly human energies, but merely with mechanical exactness” and so when the laborer works under external control, “we may admire what he does, but we despise what he is”.[207] Both the Milgram and Stanford experiments have been found useful in the psychological study of wage-based workplace relations.[208] Additionally, as per anthropologist David Graeber, the earliest wage labor contracts we know about were in fact contracts for the rental of chattel slaves (usually the owner would receive a share of the money and the slave another, with which to maintain his or her living expenses). According to Graeber, such arrangements were quite common in New World slavery as well, whether in the United States or Brazil.[209] C. L. R. James argued in The Black Jacobins that most of the techniques of human organisation employed on factory workers during the Industrial Revolution were first developed on slave plantations.[210]

Girl pulling a coal tub in mine, from official report of the British parliamentary commission in the mid 19th century[211]

Some anti-capitalist thinkers claim that the elite maintain wage slavery and a divided working class through their influence over the media and entertainment industry,[212][213] educational institutions, unjust laws, nationalist and corporate propaganda, pressures and incentives to internalize values serviceable to the power structure, state violence, fear of unemployment[214] and a historical legacy of exploitation and profit accumulation/transfer under prior systems, which shaped the development of economic theory:

Adam Smith noted that employers often conspire together to keep wages low:[215]

The interest of the dealers… in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public… [They] have generally an interest to deceive and even to oppress the public… We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.

Aristotle made the statement that “the citizens must not live a mechanic or a mercantile life (for such a life is ignoble and inimical to virtue), nor yet must those who are to be citizens in the best state be tillers of the soil (for leisure is needed both for the development of virtue and for active participation in politics)”,[216] often paraphrased as “all paid jobs absorb and degrade the mind”.[217] Cicero wrote in 44 BC that “vulgar are the means of livelihood of all hired workmen whom we pay for mere manual labour, not for artistic skill; for in their case the very wage they receive is a pledge of their slavery”.[218] Somewhat similar criticisms have also been expressed by some proponents of liberalism, like Henry George,[219][220] Silvio Gesell and Thomas Paine[221] as well as the Distributist school of thought within the Roman Catholic Church.

To Marxist and anarchist thinkers like Mikhail Bakunin and Peter Kropotkin, wage slavery was a class condition in place due to the existence of private property and the state. This class situation rested primarily on:

  1. The existence of property not intended for active use.
  2. The concentration of ownership in few hands.
  3. The lack of direct access by workers to the means of production and consumption goods.
  4. The perpetuation of a reserve army of unemployed workers.

For Marxists, labor as commodity, which is how they regard wage labor,[222] provides a fundamental point of attack against capitalism.[223] “It can be persuasively argued”, noted one concerned philosopher, “that the conception of the worker’s labour as a commodity confirms Marx’s stigmatization of the wage system of private capitalism as ‘wage-slavery;’ that is, as an instrument of the capitalist’s for reducing the worker’s condition to that of a slave, if not below it”.[224] That this objection is fundamental follows immediately from Marx’s conclusion that wage labor is the very foundation of capitalism: “Without a class dependent on wages, the moment individuals confront each other as free persons, there can be no production of surplus value; without the production of surplus-value there can be no capitalist production, and hence no capital and no capitalist!”.[225]

Marxian responses

Marx considered capitalism to be a historically specific mode of production (the way in which the productive property is owned and controlled, combined with the corresponding social relations between individuals based on their connection with the process of production).[41]

The “capitalistic era” according to Karl Marx dates from 16th-century merchants and small urban workshops.[40] Marx knew that wage labour existed on a modest scale for centuries before capitalist industry. For Marx, the capitalist stage of development or “bourgeois society” represented the most advanced form of social organization to date, but he also thought that the working classes would come to power in a worldwide socialist or communist transformation of human society as the end of the series of first aristocratic, then capitalist and finally working class rule was reached.[226][227]

Following Adam Smith, Marx distinguished the use value of commodities from their exchange value in the market. According to Marx, capital is created with the purchase of commodities for the purpose of creating new commodities with an exchange value higher than the sum of the original purchases. For Marx, the use of labor power had itself become a commodity under capitalism and the exchange value of labor power, as reflected in the wage, is less than the value it produces for the capitalist.

This difference in values, he argues, constitutes surplus value, which the capitalists extract and accumulate. In his book Capital, Marx argues that the capitalist mode of production is distinguished by how the owners of capital extract this surplus from workers—all prior class societies had extracted surplus labor, but capitalism was new in doing so via the sale-value of produced commodities.[228] He argues that a core requirement of a capitalist society is that a large portion of the population must not possess sources of self-sustenance that would allow them to be independent and are instead forced to sell their labor for a wage.[229][230][231]

In conjunction with his criticism of capitalism was Marx’s belief that the working class, due to its relationship to the means of production and numerical superiority under capitalism, would be the driving force behind the socialist revolution.[232] This argument is intertwined with Marx’ version of the labor theory of value arguing that labor is the source of all value and thus of profit.

In Imperialism, the Highest Stage of Capitalism (1916), Vladimir Lenin further developed Marxist theory and argued that capitalism necessarily led to monopoly capitalism and the export of capital—which he also called “imperialism”—to find new markets and resources, representing the last and highest stage of capitalism.[233] Some 20th century Marxian economists consider capitalism to be a social formation where capitalist class processes dominate, but are not exclusive.[234]

To these thinkers, capitalist class processes are simply those in which surplus labor takes the form of surplus value, usable as capital; other tendencies for utilization of labor nonetheless exist simultaneously in existing societies where capitalist processes predominate. However, other late Marxian thinkers argue that a social formation as a whole may be classed as capitalist if capitalism is the mode by which a surplus is extracted, even if this surplus is not produced by capitalist activity as when an absolute majority of the population is engaged in non-capitalist economic activity.[235]

In Limits to Capital (1982), David Harvey outlines an overdetermined, “spatially restless” capitalism coupled with the spatiality of crisis formation and resolution.[236] Harvey used Marx’s theory of crisis to aid his argument that capitalism must have its “fixes”, but that we cannot predetermine what fixes will be implemented, nor in what form they will be. His work on contractions of capital accumulation and international movements of capitalist modes of production and money flows has been influential.[237] According to Harvey, capitalism creates the conditions for volatile and geographically uneven development [238]

Sociologists such as Ulrich Beck envisioned the society of risk as a new cultural value which saw risk as a commodity to be exchanged in globalized economies. This theory suggested that disasters and capitalist economy were inevitably entwined. Disasters allow the introduction of economic programs which otherwise would be rejected as well as decentralizing the class structure in production.[239]

Criticisms on the environmental sustainability of capitalism

Scholars argue that the capitalist approach to environmental economics does not take into consideration the preserving of natural resources.[240] Capitalism creates three ecological problems: growth, technology, and consumption.[241] The growth problem results from the nature of capitalism, as it focuses around the accumulation of Capital.[241]  The innovation of new technologies has an impact on the environmental future as they serve as a capitalist tool in which environmental technologies can result in the expansion of the system.[242] Consumption is focused around the capital accumulation of commodities and neglects the use-value of production.[241]

Supply and demand

At least two assumptions are necessary for the validity of the standard model: first, that supply and demand are independent; and second, that supply is “constrained by a fixed resource”. If these conditions do not hold, then the Marshallian model cannot be sustained. Sraffa’s critique focused on the inconsistency (except in implausible circumstances) of partial equilibrium analysis and the rationale for the upward slope of the supply curve in a market for a produced consumption good.[243] The notability of Sraffa’s critique is also demonstrated by Paul A. Samuelson‘s comments and engagements with it over many years, for example:

What a cleaned-up version of Sraffa (1926) establishes is how nearly empty are all of Marshall’s partial equilibrium boxes. To a logical purist of Wittgenstein and Sraffa class, the Marshallian partial equilibrium box of constant cost is even more empty than the box of increasing cost.[244]

Aggregate excess demand in a market is the difference between the quantity demanded and the quantity supplied as a function of price. In the model with an upward-sloping supply curve and downward-sloping demand curve, the aggregate excess demand function only intersects the axis at one point, namely at the point where the supply and demand curves intersect. The Sonnenschein–Mantel–Debreu theorem shows that the standard model cannot be rigorously derived in general from general equilibrium theory.[245]

The model of prices being determined by supply and demand assumes perfect competition. However, “economists have no adequate model of how individuals and firms adjust prices in a competitive model. If all participants are price-takers by definition, then the actor who adjusts prices to eliminate excess demand is not specified”.[246] Goodwin, Nelson, Ackerman and Weisskopf write:

If we mistakenly confuse precision with accuracy, then we might be misled into thinking that an explanation expressed in precise mathematical or graphical terms is somehow more rigorous or useful than one that takes into account particulars of history, institutions or business strategy. This is not the case. Therefore, it is important not to put too much confidence in the apparent precision of supply and demand graphs. Supply and demand analysis is a useful precisely formulated conceptual tool that clever people have devised to help us gain an abstract understanding of a complex world. It does not—nor should it be expected to—give us in addition an accurate and complete description of any particular real world market.[247]

Externalities

Market failure occurs when an externality is present and a market will often either under-produce a product with a positive externalisation or overproduce a product that generates a negative externalisation.[citation needed] Air pollution, for instance, is a negative externalisation that cannot be easily incorporated into markets as the world’s air is not owned and then sold for use to polluters.[citation needed] So too much pollution could be emitted and people not involved in the production pay the cost of the pollution instead of the firm that initially emitted the air pollution.[citation needed] Critics of market failure theory, like Ronald Coase, Harold Demsetz and James M. Buchanan, argue that government programs and policies also fall short of absolute perfection.[citation needed] While all nations currently have some kind of market regulations, the desirable degree of regulation is disputed.[citation needed]

Counter-criticisms

Austrian School

Austrian School economists have argued that capitalism can organize itself into a complex system without an external guidance or central planning mechanism. Friedrich Hayek considered the phenomenon of self-organisation as underpinning capitalism. Prices serve as a signal as to the urgent and unfilled wants of people and the opportunity to earn profits if successful, or absorb losses if resources are used poorly or left idle, gives entrepreneurs incentive to use their knowledge and resources to satisfy those wants. Thus the activities of millions of people, each seeking his own interest, are coordinated.[248]

Ayn Rand

The novelist and philosopher Ayn Rand made positive moral defenses of laissez-faire capitalism, most notably in her 1957 novel Atlas Shrugged and in her 1966 collection of essays Capitalism: The Unknown Ideal. She argued that capitalism should be supported on moral grounds, not just on the basis of practical benefits.[249][250] Her ideas have had significant influence over conservative and libertarian supporters of capitalism, especially within the American Tea Party movement.[251] Rand defined capitalism as “a social system based on the recognition of individual rights, including property rights, in which all property is privately owned”.[252] According to Rand, the role of government in a capitalist state has three broad categories of proper functions: first, the police “to protect men from criminals”; second, the armed services “to protect men from foreign invaders”; and third, the law courts “to settle disputes among men according to objective laws”.[253]

See also

References …

https://en.wikipedia.org/wiki/Capitalism

 

Socialism

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Socialism is a range of economic and social systems characterised by social ownership of the means of production and workers’ self-management,[10] as well as the political theories and movements associated with them.[11] Social ownership can be public, collective or cooperative ownership, or citizen ownership of equity.[12] There are many varieties of socialism and there is no single definition encapsulating all of them,[13] with social ownership being the common element shared by its various forms.[5][14][15]

Socialist systems are divided into non-market and market forms.[16] Non-market socialism involves the substitution of factor markets and money with engineering and technical criteria based on calculation performed in-kind, thereby producing an economic mechanism that functions according to different economic laws from those of capitalism. Non-market socialism aims to circumvent the inefficiencies and crises traditionally associated with capital accumulation and the profit system.[25] By contrast, market socialism retains the use of monetary prices, factor markets and in some cases the profit motive, with respect to the operation of socially owned enterprises and the allocation of capital goods between them. Profits generated by these firms would be controlled directly by the workforce of each firm, or accrue to society at large in the form of a social dividend.[26][27][28] The socialist calculation debate concerns the feasibility and methods of resource allocation for a socialist system.

Socialist politics has been both internationalist and nationalist in orientation; organised through political parties and opposed to party politics; at times overlapping with trade unions, and at other times independent and critical of unions; and present in both industrialised and developing nations.[29] Originating within the socialist movement, social democracy has embraced a mixed economy with a market that includes substantial state intervention in the form of income redistribution, regulation, and a welfare state. Economic democracy proposes a sort of market socialism where there is more decentralised control of companies, currencies, investments, and natural resources.

The socialist political movement includes a set of political philosophies that originated in the revolutionary movements of the mid-to-late 18th century and out of concern for the social problems that were associated with capitalism.[13] By the late 19th century, after the work of Karl Marx and his collaborator Friedrich Engels, socialism had come to signify opposition to capitalism and advocacy for a post-capitalist system based on some form of social ownership of the means of production.[30][31] By the 1920s, social democracy and communism had become the two dominant political tendencies within the international socialist movement.[32] By this time, socialism emerged as “the most influential secular movement of the twentieth century, worldwide. It is a political ideology (or world view), a wide and divided political movement”[33] and while the emergence of the Soviet Union as the world’s first nominally socialist state led to socialism’s widespread association with the Soviet economic model, some economists and intellectuals argued that in practice the model functioned as a form of state capitalism[34][35][36] or a non-planned administrative or command economy.[37][38] Socialist parties and ideas remain a political force with varying degrees of power and influence on all continents, heading national governments in many countries around the world. Today, some socialists have also adopted the causes of other social movements, such as environmentalism, feminism and progressivism.[39] In 21st century America, the term socialism, without clear definition, has become a pejorative used by conservatives to taint liberal and progressive policies, proposals, and public figures.[40]

Contents

Etymology

For Andrew Vincent, “[t]he word ‘socialism’ finds its root in the Latin sociare, which means to combine or to share. The related, more technical term in Roman and then medieval law was societas. This latter word could mean companionship and fellowship as well as the more legalistic idea of a consensual contract between freemen”.[41]

The term “socialism” was created by Henri de Saint-Simon, one of the founders of what would later be labelled “utopian socialism“. Simon coined the term as a contrast to the liberal doctrine of “individualism“, which stressed that people act or should act as if they are in isolation from one another.[42] The original “utopian” socialists condemned liberal individualism for failing to address social concerns during the industrial revolution, including poverty, social oppression and gross inequalities in wealth, thus viewing liberal individualism as degenerating society into supporting selfish egoism that harmed community life through promoting a society based on competition.[42] They presented socialism as an alternative to liberal individualism based on the shared ownership of resources, although their proposals for socialism differed significantly. Saint-Simon proposed economic planning, scientific administration and the application of modern scientific advancements to the organisation of society. By contrast, Robert Owen proposed the organisation of production and ownership in cooperatives.[42][43]

The term “socialism” is also attributed to Pierre Leroux[44] and to Marie Roch Louis Reybaud in France; and to Robert Owen in Britain who became one of the fathers of the cooperative movement.[45][46]

The modern definition and usage of “socialism” settled by the 1860s, becoming the predominant term among the group of words “co-operative”, “mutualist” and “associationist”, which had previously been used as synonyms. The term “communism” also fell out of use during this period, despite earlier distinctions between socialism and communism from the 1840s.[47] An early distinction between socialism and communism was that the former aimed to only socialise production while the latter aimed to socialise both production and consumption (in the form of free access to final goods).[48] However, Marxists employed the term “socialism” in place of “communism” by 1888, which had come to be considered an old-fashion synonym for socialism. It was not until 1917 after the Bolshevik Revolution that “socialism” came to refer to a distinct stage between capitalism and communism, introduced by Vladimir Lenin as a means to defend the Bolshevik seizure of power against traditional Marxist criticisms that Russia’s productive forces were not sufficiently developed for socialist revolution.[49]

A distinction between “communist” and “socialist” as descriptors of political ideologies arose in 1918 after the Russian Social-Democratic Labour Party renamed itself to the All-Russian Communist Party, where communist came to specifically mean socialists who supported the politics and theories of Leninism, Bolshevism and later Marxism–Leninism,[50] although communist parties continued to describe themselves as socialists dedicated to socialism.[51]

The words “socialism” and “communism” eventually accorded with the adherents’ and opponents’ cultural attitude towards religion. In Christian Europe, communism was believed to be 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.[52] Friedrich Engels argued that in 1848, at the time when The Communist Manifesto was published, that “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.[53] The British moral philosopher John Stuart Mill also came to advocate a form of economic socialism within a liberal context. In later editions of his Principles of Political Economy (1848), Mill would argue that “as far as economic theory was concerned, there is nothing in principle in economic theory that precludes an economic order based on socialist policies”.[54][55] While democrats looked to the Revolutions of 1848 as a democratic revolution, which in the long run ensured liberty, equality and fraternity, Marxists denounced 1848 as a betrayal of working-class ideals by a bourgeoisie indifferent to the legitimate demands of the proletariat.[56]

History

Early socialism

Charles Fourier, influential early French socialist thinker

Socialist models and ideas espousing common or public ownership have existed since antiquity. The economy of the 3rd century BCE Mauryan Empire of India has been described as “a socialized monarchy” and “a sort of state socialism”.[57][58] It has been claimed—though controversially—that there were elements of socialist thought in the politics of classical Greek philosophers Plato[59] and Aristotle.[60] Mazdak the Younger (died c. 524 or 528 CE), a Persian communal proto-socialist,[61] instituted communal possessions and advocated the public good. Abū Dharr al-Ghifārī, a Companion of Prophet Muhammad, is credited by many as a principal antecedent of Islamic socialism.[62][63][64][65][66] The teachings of Jesus the messiah of the Christian religion are frequently highlighted as socialist in nature, though this is disputed.[67] Acts 4:35 records that the early church in Jerusalem ‘No one claimed that any of their possessions was their own’; however the pattern soon disappears from church history except within monasticism. Christian socialism was one of the founding threads of the UK Labour Party and is said to be a tradition going back 600 years to the uprising of Wat Tyler and John Ball.[68] In the period right after the French Revolution, activists and theorists like François-Noël Babeuf, Étienne-Gabriel Morelly, Philippe Buonarroti and Auguste Blanqui influenced the early French labour and socialist movements.[69] In Britain, Thomas Paine proposed a detailed plan to tax property owners to pay for the needs of the poor in Agrarian Justice[70] while Charles Hall wrote The Effects of Civilization on the People in European States, denouncing capitalism’s effects on the poor of his time[71] which influenced the utopian schemes of Thomas Spence.[72]

The first self-conscious socialist movements developed in the 1820s and 1830s. The Owenites, Saint-Simonians and Fourierists provided a series of coherent analyses and interpretations of society. They also, especially in the case of the Owenites, overlapped with a number of other working-class movements like the Chartists in the United Kingdom”.[73] The Chartists gathered significant numbers around the People’s Charter of 1838, which sought a number of democratic reforms focused on the extension of suffrage to all male adults. Leaders in the movement also called for a more equitable distribution of income and better living conditions for the working classes. The very first trade unions and consumers’ cooperative societies also emerged in the hinterland of the Chartist movement as a way of bolstering the fight for these demands.[74] A later important socialist thinker in France was Pierre-Joseph Proudhon, who proposed his philosophy of mutualism in which “everyone had an equal claim, either alone or as part of a small cooperative, to possess and use land and other resources as needed to make a living”.[75] There were also currents inspired by dissident Christianity of Christian socialism “often in Britain and then usually coming out of left liberal politics and a romantic anti-industrialism”[69] which produced theorists such as Edward Bellamy, Frederick Denison Maurice and Charles Kingsley.[76]

The first advocates of socialism favoured social levelling in order to create a meritocratic or technocratic society based on individual talent. Count Henri de Saint-Simon is regarded as the first individual to coin the term “socialism”.[77] 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 on equal opportunities.[78][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.[77] The key focus of Saint-Simon’s socialism was on administrative efficiency and industrialism and a belief that science was the key to progress.[79] This was accompanied by a desire to implement a rationally organised economy based on planning and geared towards large-scale scientific and material progress,[77] 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 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.[citation needed]

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.[79] On the other hand, Charles Fourier advocated phalansteres which were communities that respected individual desires (including sexual preferences), affinities and creativity and saw that work has to be made enjoyable for people.[80] 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.

Paris Commune

The celebration of the election of the Commune on 28 March 1871—the Paris Commune was a major early implementation of socialist ideas

The Paris Commune was a government that briefly ruled Paris from 18 March (more formally, from 28 March) to 28 May 1871. The Commune was the result of an uprising in Paris after France was defeated in the Franco-Prussian War. The Commune elections held on 26 March elected a Commune council of 92 members, one member for each 20,000 residents.[81] Despite internal differences, the council began to organise the public services essential for a city of two million residents. It also reached a consensus on certain policies that tended towards a progressive, secular and highly democratic social democracy.

Because the Commune was only able to meet on fewer than 60 days in all, only a few decrees were actually implemented. These included the separation of church and state; the remission of rents owed for the entire period of the siege (during which payment had been suspended); the abolition of night work in the hundreds of Paris bakeries; the granting of pensions to the unmarried companions and children of National Guards killed on active service; and the free return, by the city pawnshops, of all workmen’s tools and household items valued up to 20 francs, pledged during the siege.[82] The Commune was concerned that skilled workers had been forced to pawn their tools during the war; the postponement of commercial debt obligations and the abolition of interest on the debts; and the right of employees to take over and run an enterprise if it were deserted by its owner. The Commune nonetheless recognised the previous owner’s right to compensation.[82]

First International

The International Workingmen’s Association (IWA), often called the First International, was founded in London in 1864. The International Workingmen’s Association united diverse revolutionary currents including French followers of Proudhon,[83] Blanquists, Philadelphes, English trade unionists, socialists and social democrats. 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 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 headed by Marx and Bakunin respectively.[84] 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.

The followers of Bakunin were called collectivist anarchists and sought to collectivise ownership of the means of production while retaining payment proportional to the amount and kind of labour of each individual. Like Proudhonists, they asserted the right of each individual to the product of his labour and to be remunerated for their particular contribution to production. By contrast, anarcho-communists sought collective ownership of both the means and the products of labour. Errico Malatesta put it: “[I]nstead of running the risk of making a confusion in trying to distinguish what you and I each do, let us all work and put everything in common. In this way each will give to society all that his strength permits until enough is produced for every one; and each will take all that he needs, limiting his needs only in those things of which there is not yet plenty for every one”.[85] Anarcho-communism as a coherent, modern economic-political philosophy was first formulated in the Italian section of the First International by Carlo Cafiero, Emilio Covelli, Errico Malatesta, Andrea Costa and other ex Mazzinian republicans.[86] Out of respect for Mikhail Bakunin, they did not make their differences with collectivist anarchism explicit until after Bakunin’s death.[87]

Syndicalism emerged in France inspired in part by the ideas of Pierre-Joseph Proudhon and later by Fernand Pelloutier and Georges Sorel.[88] It developed at the end of the 19th century out of the French trade-union movement (syndicat is the French word for trade union). It was a significant force in Italy and Spain in the early 20th century until it was crushed by the fascist regimes in those countries. In the United States, syndicalism appeared in the guise of the Industrial Workers of the World, or “Wobblies”, founded in 1905.[88] Syndicalism is an economic system where industries are organised into confederations (syndicates)[89] and the economy is managed by negotiation between specialists and worker representatives of each field, comprising multiple non-competitive categorised units.[90] Syndicalism is thus a form of communism and economic corporatism, but also refers to the political movement and tactics used to bring about this type of system. An influential anarchist movement based on syndicalist ideas is anarcho-syndicalism.[91] The International Workers Association is an international anarcho-syndicalist federation of various labour unions from different countries.

The Fabian Society is a British socialist organisation which was established with the purpose of advancing the principles of socialism via gradualist and reformist means.[92] The society laid many of the foundations of the Labour Party and subsequently affected the policies of states emerging from the decolonisation of the British Empire, most notably India and Singapore. Originally, the Fabian Society was committed to the establishment of a socialist economy, alongside a commitment to British imperialism as a progressive and modernising force.[93] Today, the society functions primarily as a think tank and is one of fifteen socialist societies affiliated with the Labour Party. Similar societies exist in Australia (the Australian Fabian Society), in Canada (the Douglas-Coldwell Foundation and the now disbanded League for Social Reconstruction) and in New Zealand.

Guild socialism is a political movement advocating workers’ control of industry through the medium of trade-related guilds “in an implied contractual relationship with the public”.[94] It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century. Inspired by medieval guilds, theorists such as Samuel G. Hobson and G. D. H. Cole advocated the public ownership of industries and their organisation into guilds, each of which would be under the democratic control of its trade union. Guild socialists were less inclined than Fabians to invest power in a state.[88] At some point, like the American Knights of Labor, guild socialism wanted to abolish the wage system.[citation needed]

Second International

As the ideas of Marx and Engels took on flesh, particularly in central Europe, socialists sought to unite in an international organisation. In 1889 (the centennial of the French Revolution of 1789), the Second International was founded, with 384 delegates from twenty countries representing about 300 labour and socialist organisations.[95] 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 due to pressure from Marxists.[96] It has been argued that at some point the Second International turned “into a battleground over the issue of libertarian versus authoritarian socialism. Not only did they effectively present themselves as champions of minority rights; they also provoked the German Marxists into demonstrating a dictatorial intolerance which was a factor in preventing the British labour movement from following the Marxist direction indicated by such leaders as H. M. Hyndman“.[96]

Reformism arose as an alternative to revolution. Eduard Bernstein was a leading social democrat in Germany who proposed the concept of evolutionary socialism. Revolutionary socialists quickly targeted reformism: Rosa Luxemburg condemned Bernstein’s Evolutionary Socialism in her 1900 essay Social Reform or Revolution?. Revolutionary socialism encompasses multiple social and political movements that may define “revolution” differently from one another. The Social Democratic Party (SPD) in Germany became the largest and most powerful socialist party in Europe, despite working illegally until the anti-socialist laws were dropped in 1890. In the 1893 elections, it gained 1,787,000 votes, a quarter of the total votes cast, according to Engels. In 1895, the year of his death, Engels emphasised the Communist Manifestos emphasis on winning, as a first step, the “battle of democracy”.[97]

Early 20th century

Antonio Gramsci, member of the Italian Socialist Party and later leader and theorist of the Communist Party of Italy

In Argentina the Socialist Party of Argentina was established in the 1890s led by, among others, Juan B. Justo and Nicolás Repetto, thus becoming the first mass party in the country and in Latin America. The party affiliated itself with the Second International.[98] Between 1924 and 1940 it was a member of the Labour and Socialist International.[99] In 1904, Australians elected Chris Watson as the first Australian Labor Party Prime Minister, becoming the first democratically elected social democrat. In 1909, the first Kibbutz was established in Palestine[100] by Russian Jewish Immigrants. The Kibbutz Movement would then expand through the 20th century following a doctrine of Zionist socialism.[101] The British Labour Party first won seats in the House of Commons in 1902. The International Socialist Commission (ISC, also known as Berne International) was formed in February 1919 at a meeting in Bern by parties that wanted to resurrect the Second International.[102]

By 1917, the patriotism of World War I changed into political radicalism in most of Europe, the United States and Australia. Other socialist parties from around the world who were beginning to gain importance in their national politics in the early 20th century included the Italian Socialist Party, the French Section of the Workers’ International, the Spanish Socialist Workers’ Party, the Swedish Social Democratic Party, the Russian Social Democratic Labour Party, the Socialist Party of America in the United States, the Argentinian Socialist Party and the Chilean Partido Obrero Socialista.

Russian Revolution

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, leader of the Bolshevik faction of socialists in Russia and known for his profound and controversial expansions of Marxism, was allowed to cross Germany to return to his country from exile in Switzerland.

Lenin had published essays on his analysis of imperialism, the monopoly and globalisation phase of capitalism as predicted by Marx, as well as analyses on the social conditions of his contemporary time. He observed that as capitalism had further developed in Europe and America, the workers remained unable to gain class consciousness so long as they were too busy working and concerned with how to make ends meet. He therefore proposed that the social revolution would require the leadership of a vanguard party of class-conscious revolutionaries from the educated and politically active part of the population.[103]

Upon arriving in Petrograd, Lenin declared that the revolution in Russia was not over but had only begun, and that the next step was for the workers’ soviets to take full state authority. He issued a thesis outlining the Bolshevik’s party programme, including rejection of any legitimacy in the provisional government and advocacy for state power to be given to the peasant and working class through the soviets. The Bolsheviks became the most influential force in the soviets and on 7 November the capitol of the provisional government was stormed by Bolshevik Red Guards in what afterwards known as the “Great October Socialist Revolution“. The rule of the provisional government was ended and the Russian Socialist Federative Soviet Republic—the world’s first constitutionally socialist state—was established. On 25 January 1918 at the Petrograd Soviet, Lenin declared “Long live the world socialist revolution!”[104] and 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.[105]

The day after assuming executive power on 25 January, 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”.[106] Governing through the elected soviets and in alliance with the peasant-based Left Socialist-Revolutionaries, the Bolshevik government began nationalising banks and 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.[107]

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[108] and the All-Russian Central Executive Committee of the Soviets dissolved it.[109][110] In March 1919, world communist parties formed Comintern (also known as the Third International) at a meeting in Moscow.[111]

International Working Union of Socialist Parties

Parties which did not want to be a part of the resurrected Second International (ISC) or Comintern formed the International Working Union of Socialist Parties (IWUSP, also known as Vienna International/Vienna Union/Two-and-a-Half International) on 27 February 1921 at a conference in Vienna.[112] The ISC and the IWUSP joined to form the Labour and Socialist International (LSI) in May 1923 at a meeting in Hamburg[113] Left-wing groups which did not agree to the centralisation and abandonment of the soviets by the Bolshevik Party led left-wing uprisings against the Bolsheviks—such groups included Socialist Revolutionaries,[114] Left Socialist Revolutionaries, Mensheviks and anarchists.[115]

Within this left-wing discontent, the most large-scale events were the worker’s Kronstadt rebellion[116][117][118] and the anarchist led Revolutionary Insurrectionary Army of Ukraine uprising which controlled an area known as the Free Territory.[119][120][121]

Third International

The Bolshevik Russian Revolution of January 1918 engendered communist parties worldwide and their concomitant revolutions of 1917–1923. Few communists doubted that the Russian success of socialism depended on successful, working-class socialist revolutions in developed capitalist countries.[122][123] 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.

The Russian Revolution also influenced uprisings in other countries around this time. The German Revolution of 1918–1919 resulted in the replacing Germany’s imperial government with a republic. The revolutionary period lasted from November 1918 until the formal establishment of the Weimar Republic in August 1919 and included an episode known as the Bavarian Soviet Republic[124][125][126][127] and the Spartacist uprising. In Italy, the events known as the Biennio Rosso[128][129] were characterised by mass strikes, worker manifestations and self-management experiments through land and factory occupations. In Turin and Milan, workers’ councils were formed and many factory occupations took place led by anarcho-syndicalists organised around the Unione Sindacale Italiana.[130]

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.[131] Nevertheless, the role of Trotsky in this episode has been questioned by other socialists, including ex Trotskyists. In the United States, Dwight Macdonald broke with Trotsky and left the Trotskyist Socialist Workers Party by raising the question of the Kronstadt rebellion, which Trotsky as leader of the Soviet Red Army and the other Bolsheviks had brutally repressed. He then moved towards democratic socialism.[132] and anarchism.[133]

A similar critique of Trotsky’s role on the events around the Kronstadt rebellion was raised by the American anarchist Emma Goldman. In her essay “Trotsky Protests Too Much”, she says: “I admit, the dictatorship under Stalin’s rule has become monstrous. That does not, however, lessen the guilt of Leon Trotsky as one of the actors in the revolutionary drama of which Kronstadt was one of the bloodiest scenes”.[134]

Rosa Luxemburg, prominent Marxist revolutionary, leader of the Social Democratic Party of Germany and martyr and leader of the German Spartacist uprising in 1919

Fourth congress

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.

On seeing the Soviet State’s growing coercive power in 1923, a dying Lenin said Russia had reverted to “a bourgeois tsarist machine… barely varnished with socialism”.[135] 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.[136][137][self-published source?][unreliable source?]

In 1924, the Mongolian People’s Republic was established and was ruled by the Mongolian People’s Party. The Russian Revolution and the appearance of the Soviet State motivated a worldwide current of national communist parties which ended having varying levels of political and social influence. Among these there appeared the Communist Party of France, the Communist Party USA, the Italian Communist Party, the Chinese Communist Party, the Mexican Communist Party, the Brazilian Communist Party, the Chilean Communist Party and the Communist Party of Indonesia.

Spanish Civil War

FAI militia during the Spanish Revolution in 1936

In Spain in 1936, the national anarcho-syndicalist trade union Confederación Nacional del Trabajo (CNT) initially refused to join a popular front electoral alliance and abstention by CNT supporters led to a right-wing election victory. In 1936, the CNT changed its policy and anarchist votes helped bring the popular front back to power. Months later, the former ruling class responded with an attempted coup, sparking the Spanish Civil War (1936–1939).[138]

In response to the army rebellion, an anarchist-inspired movement of peasants and workers, supported by armed militias, took control of Barcelona and of large areas of rural Spain where they collectivised the land.[139][139] The events known as the Spanish Revolution was a workers’ social revolution that began during the outbreak of the Spanish Civil War in 1936 and resulted in the widespread implementation of anarchist and more broadly libertarian socialist organisational principles throughout various portions of the country for two to three years, primarily Catalonia, Aragon, Andalusia and parts of Levante.

Much of Spain’s economy was put under worker control and in anarchist strongholds like Catalonia the figure was as high as 75%, but lower in areas with heavy Communist Party of Spain influence, as the Soviet-allied party actively resisted attempts at collectivisation enactment. Factories were run through worker committees, agrarian areas became collectivised and run as libertarian communes. Anarchist historian Sam Dolgoff estimated that about eight million people participated directly or indirectly in the Spanish Revolution.[140]

Mid-20th century

Post-World War II

Leon Trotsky‘s Fourth International was established in France in 1938 when Trotskyists argued that the Comintern or Third International had become irretrievably “lost to Stalinism” and thus incapable of leading the international working class to political power.[141] The rise of Nazism and the start of World War II led to the dissolution of the LSI in 1940. After the War, the Socialist International was formed in Frankfurt in July 1951 as a successor to the LSI.[142]

After World War II, social democratic governments introduced social reform and wealth redistribution via state welfare and taxation. Social democratic parties dominated post-war politics in countries such as France, Italy, Czechoslovakia, Belgium and Norway. 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.[143]

In 1945, the British Labour Party led by Clement Attlee was elected to office based on a radical socialist programme. The Labour government nationalised major public utilities such as mines, gas, coal, electricity, rail, iron, steel and the Bank of England. British Petroleum was officially nationalised in 1951.[144] Anthony Crosland said that in 1956 25% of British industry was nationalised and that public employees, including those in nationalised industries, constituted a similar proportion of the country’s total employed population.[145] The Labour Governments of 1964–1970 and 1974–1979 intervened further.[146] It re-nationalised steel (1967, British Steel) after the Conservatives had denationalised it and nationalised car production (1976, British Leyland).[147] The National Health Service provided taxpayer-funded health care to everyone, free at the point of service.[148] Working-class housing was provided in council housing estates and university education became available via a school grant system.[149]

Nordic model

The Nordic model is a term for a form of social democracy common to the Nordic countries (Denmark, Iceland, Norway, Sweden and Finland).[150][151][152] During most of the post-war era, Sweden was governed by the Swedish Social Democratic Party largely in cooperation with trade unions and industry.[153] In Sweden, the Social Democratic Party held power from 1936 to 1976, 1982 to 1991, 1994 to 2006 and 2014 to present. Tage Erlander was the leader of the Swedish Social Democratic Party and led the government from 1946 to 1969, an uninterrupted tenure of twenty-three years, one of the longest in any democracy. From 1945 to 1962, the Norwegian Labour Party held an absolute majority in the parliament led by Einar Gerhardsen who was Prime Minister with seventeen years in office. 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 expansionary fiscal policy.[154]

Soviet Union and Eastern Europe

The Soviet Union played a decisive role in the Allied victory in World War II.[155][156] After the war, the Soviet Union became a recognised superpower.[157] The Soviet era saw some of the most significant technological achievements of the 20th century, including the world’s first spacecraft and the first astronaut. The Soviet economy 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 on 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 in light industrial production and consumer durables.[citation needed] Modernisation brought about a general increase in the standard of living.[158]

The Eastern Bloc was the group of former Communist states of Central and Eastern Europe, generally the Soviet Union and the countries of the Warsaw Pact[159][160][161] which included the People’s Republic of Poland, the German Democratic Republic, the People’s Republic of Hungary, the People’s Republic of Bulgaria, the Czechoslovak Socialist Republic, the Socialist Republic of Romania, the People’s Socialist Republic of Albania and the Socialist Federal Republic of Yugoslavia. The Hungarian Revolution of 1956 was a spontaneous nationwide revolt against the government of the People’s Republic of Hungary and its Soviet-imposed policies, lasting from 23 October until 10 November 1956. Soviet leader Nikita Khrushchev’s denunciation of the excesses of Stalin’s regime during the Twentieth Party Congress of the Communist Party of the Soviet Union on 1956[162] as well as the revolt in Hungary,[163][164][165][166] produced ideological fractures and disagreements within the communist and socialist parties of Western Europe.

Third World

In the post-war years, socialism became increasingly influential throughout the so-called Third World. Embracing a new Third World socialism, countries in Africa, Asia and Latin America often nationalised industries held by foreign owners. The Chinese Kuomintang Party, the previous ruling party in Taiwan, was referred to as having a socialist ideology since Kuomintang’s revolutionary ideology in the 1920s incorporated unique Chinese socialism as part of its ideology.[167][168] The Soviet Union trained Kuomintang revolutionaries in the Moscow Sun Yat-sen University. Movie theatres in the Soviet Union showed newsreels and clips of Chiang at Moscow Sun Yat-sen University portraits of Chiang were hung on the walls and in the Soviet May Day parades that year Chiang’s portrait was to be carried along with the portraits of Marx, Lenin, Stalin and other socialist leaders.[169]

The Chinese Revolution was the second stage in the Chinese Civil War which ended in the establishment of the People’s Republic of China led by the Chinese Communist Party. The term “Third World” was coined by French demographer Alfred Sauvy in 1952 on the model of the Third Estate, which according to the Abbé Sieyès represented everything, but was nothing “because at the end this ignored, exploited, scorned Third World like the Third Estate, wants to become something too”.

The emergence of this new political entity in the frame of the Cold War was complex and painful. Several tentatives were made to organise newly independent states in order to oppose a common front towards both the United States’ and the Soviet Union’s influence on them, with the consequences of the Sino-Soviet split already at works. The Non-Aligned Movement constituted itself around the main figures of Prime Minister Jawaharlal Nehru of India, President Sukarno of Indonesia, leader Josip Broz Tito of Yugoslavia and Gamal Abdel Nasser of Egypt who successfully opposed the French and British imperial powers during the 1956 Suez crisis. After the 1954 Geneva Conference which ended the French war against Ho Chi Minh in Vietnam, the 1955 Bandung Conference gathered Nasser, Nehru, Tito, Sukarno and Zhou Enlai, Premier of the People’s Republic of China.

As many African countries gained independence during the 1960s, some of them rejected capitalism in favour of a more afrocentric economic model. The main architects of African socialism were Julius Nyerere of Tanzania, Léopold Senghor of Senegal, Kwame Nkrumah of Ghana and Sékou Touré of Guinea.[170]

The Cuban Revolution (1953–1959) was an armed revolt conducted by Fidel Castro‘s 26th of July Movement and its allies against the government of Cuban President Fulgencio Batista. The revolution began in July 1953 and finally ousted Batista on 1 January 1959, replacing his government with Castro’s revolutionary state. Castro’s government later reformed along communist lines, becoming the Communist Party of Cuba in October 1965.[171]

In Indonesia, a right-wing military regime led by Suharto killed between 500,000 and one million people in 1965 and 1966, mainly to crush the growing influence of the Communist Party of Indonesia and other leftist sectors, with support from the United States government, which provided kill lists containing thousands of names of suspected high-ranking Communists.[172][173][174][175][176]

New Left

The New Left was a term used mainly in the United Kingdom and United States in reference to activists, educators, agitators and others in the 1960s and 1970s who sought to implement a broad range of reforms on issues such as gay rights, abortion, gender roles and drugs[177] in contrast to earlier leftist or Marxist movements that had taken a more vanguardist approach to social justice and focused mostly on labour unionisation and questions of social class.[178][179][180] The New Left rejected involvement with the labour movement and Marxism‘s historical theory of class struggle.[181]

In the United States, the New Left was associated with the Hippie movement and anti-war college campus protest movements as well as the black liberation movements such as the Black Panther Party.[182] While initially formed in opposition to the “Old Left” Democratic Party, groups composing the New Left gradually became central players in the Democratic coalition.[177]

Protests of 1968

The protests of 1968 represented a worldwide escalation of social conflicts, predominantly characterised by popular rebellions against military, capitalist and bureaucratic elites who responded with an escalation of political repression. These protests marked a turning point for the civil rights movement in the United States, which produced revolutionary movements like the Black Panther Party; the prominent civil rights leader Martin Luther King Jr. organised the “Poor People’s Campaign” to address issues of economic justice,[183] while personally showing sympathy with democratic socialism.[184] In reaction to the Tet Offensive, protests also sparked a broad movement in opposition to the Vietnam War all over the United States and even into London, Paris, Berlin and Rome. In 1968 in Carrara, Italy, the International of Anarchist Federations was founded during an international anarchist conference held there by the three existing European federations of France, the Italian and the Iberian Anarchist Federation as well as the Bulgarian federation in French exile.

Mass socialist or communist movements grew not only in the United States, but also in most European countries. The most spectacular manifestation of this were the May 1968 protests in France in which students linked up with strikes of up to ten million workers and for a few days the movement seemed capable of overthrowing the government.[citation needed]

In many other capitalist countries, struggles against dictatorships, state repression and colonisation were also marked by protests in 1968, such as the beginning of the Troubles in Northern Ireland, the Tlatelolco massacre in Mexico City and the escalation of guerrilla warfare against the military dictatorship in Brazil. Countries governed by communist parties had protests against bureaucratic and military elites. In Eastern Europe there were widespread protests that escalated particularly in the Prague Spring in Czechoslovakia. In response, Soviet Union occupied Czechoslovakia, but the occupation was denounced by the Italian and French[185] communist parties and the Communist Party of Finland. Few western European political leaders defended the occupation, among them the Portuguese communist secretary-general Álvaro Cunhal.[186] along with the Luxembourg party[185] and conservative factions of the Communist Party of Greece.[185]

In the Chinese Cultural Revolution, a social-political youth movement mobilised against “bourgeois” elements which were seen to be infiltrating the government and society at large, aiming to restore capitalism. This movement motivated Maoism-inspired movements around the world in the context of the Sino-Soviet split.[citation needed]

Late 20th century

Salvador Allende, President of Chile and member of the Socialist Party of Chile, whose presidency and life was ended by a CIA-backed military coup[187]

In Latin America in the 1960s, a socialist tendency within the catholic church appeared which was called liberation theology[188][189] which motivated even the Colombian priest Camilo Torres to enter the ELN guerrilla. In Chile, Salvador Allende, a physician and candidate for the Socialist Party of Chile, was elected president through democratic elections in 1970. In 1973, his government was ousted by the United States-backed military dictatorship of Augusto Pinochet, which lasted until the late 1980s.[190] Pinochet’s regime was a leader of Operation Condor, a U.S.-backed campaign of repression and state terrorism carried out by the intelligence services of the Southern Cone countries of Latin America to eliminate suspected Communist subversion.[191][192][193] In Jamaica, the democratic socialist[194] Michael Manley served as the fourth Prime Minister of Jamaica from 1972 to 1980 and from 1989 to 1992. According to opinion polls, he remains one of Jamaica’s most popular Prime Ministers since independence.[195] The Nicaraguan Revolution encompassed the rising opposition to the Somoza dictatorship in the 1960s and 1970s, the campaign led by the Sandinista National Liberation Front (FSLN) to violently oust the dictatorship in 1978–1979, the subsequent efforts of the FSLN to govern Nicaragua from 1979 until 1990[196] and the socialist measures which included wide-scale agrarian reform[197][198] and educational programs.[199] The People’s Revolutionary Government was proclaimed on 13 March 1979 in Grenada which was overthrown by armed forces of the United States in 1983. The Salvadoran Civil War (1979–1992) was a conflict between the military-led government of El Salvador and the Farabundo Martí National Liberation Front (FMLN), a coalition or umbrella organisation of five socialist guerrilla groups. A coup on 15 October 1979 led to the killings of anti-coup protesters by the government as well as anti-disorder protesters by the guerrillas, and is widely seen as the tipping point towards the civil war.[200]

In Italy, Autonomia Operaia was a leftist movement particularly active from 1976 to 1978. It took an important role in the autonomist movement in the 1970s, aside earlier organisations such as Potere Operaio (created after May 1968) and Lotta Continua.[201] This experience prompted the contemporary socialist radical movement autonomism.[202] In 1982, the newly elected French socialist government of François Mitterrand made nationalisations in a few key industries, including banks and insurance companies.[203] Eurocommunism was a trend in the 1970s and 1980s in various Western European communist parties to develop a theory and practice of social transformation that was more relevant for a Western European country and less aligned to the influence or control of the Communist Party of the Soviet Union. Outside Western Europe, it is sometimes called neocommunism.[204] Some communist parties with strong popular support, notably the Italian Communist Party (PCI) and the Communist Party of Spain (PCE) adopted Eurocommunism most enthusiastically and the Communist Party of Finland was dominated by Eurocommunists. The French Communist Party (PCF) and many smaller parties strongly opposed Eurocommunism and stayed aligned with the Communist Party of the Soviet Union until the end of the Soviet Union.

In the late 1970s and in the 1980s, the Socialist International (SI) had extensive contacts and discussion with the two powers of the Cold War, the United States and the Soviet Union, about East-West relations and arms control. Since then, the SI has admitted as member parties the Nicaraguan FSLN, the left-wing Puerto Rican Independence Party, as well as former communist parties such as the Democratic Party of the Left of Italy and the Front for the Liberation of Mozambique (FRELIMO). The SI aided social democratic parties in re-establishing themselves when dictatorship gave way to democracy in Portugal (1974) and Spain (1975). Until its 1976 Geneva Congress, the SI had few members outside Europe and no formal involvement with Latin America.[205]

After Mao’s death in 1976 and the arrest of the faction known as the Gang of Four, who were blamed for the excesses of the Cultural Revolution, Deng Xiaoping took power and led the People’s Republic of China to significant economic reforms. The Communist Party of China loosened governmental control over citizens’ personal lives and the communes were disbanded in favour of private land leases, thus China’s transition from a planned economy to a mixed economy named as “socialism with Chinese characteristics[206] which 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. China adopted its current constitution on 4 December 1982. President Jiang Zemin and Premier Zhu Rongji led the nation in the 1990s. Under their administration, China’s economic performance pulled an estimated 150 million peasants out of poverty and sustained an average annual gross domestic product growth rate of 11.2%.[207][208] At the Sixth National Congress of the Communist Party of Vietnam in December 1986, reformist politicians replaced the “old guard” government with new leadership.[209][210] The reformers were led by 71-year-old Nguyen Van Linh, who became the party’s new general secretary.[209][210] Linh and the reformers implemented a series of free market reforms—known as Đổi Mới (“Renovation”)—which carefully managed the transition from a planned economy to a “socialist-oriented market economy“.[211][212] Mikhail Gorbachev wished to move the Soviet Union towards of Nordic-style social democracy, calling it “a socialist beacon for all mankind”.[213][214] Prior to its dissolution in 1991, the Soviet Union had the second largest economy in the world after the United States.[215] With the collapse of the Soviet Union, the economic integration of the Soviet republics was dissolved and overall industrial activity declined substantially.[216] A lasting legacy remains in the physical infrastructure created during decades of combined industrial production practices, and widespread environmental destruction.[217] The transition to capitalism in the former Soviet Union and Eastern bloc, which was accompanied by Washington Consensus-inspired “shock therapy“,[218] resulted in a steep fall in the standard of living. The region experienced rising economic inequality and poverty[219] a surge in excess mortality[220][221] and a decline in life expectancy,[222] which was accompanied by the entrenchment of a newly established business oligarchy in the former.[219] The average post-communist country had returned to 1989 levels of per-capita GDP by 2005,[223] although some are still far behind that.[224] These developments led to increased nationalist sentiment and nostalgia for the Communist era.[225][226][227]

Many social democratic parties, particularly after the Cold War, adopted neoliberal market policies including privatisation, deregulation and financialisation. They abandoned their pursuit of moderate socialism in favour of market liberalism. By the 1980s, with the rise of conservative neoliberal politicians such as Ronald Reagan in the United States, Margaret Thatcher in Britain, Brian Mulroney in Canada and Augusto Pinochet in Chile, the Western welfare state was attacked from within, but state support for the corporate sector was maintained.[228] Monetarists and neoliberals attacked social welfare systems as impediments to private entrepreneurship. In the United Kingdom, Labour Party leader Neil Kinnock made a public attack against the entryist group Militant at the 1985 Labour Party conference. The Labour Party ruled that Militant was ineligible for affiliation with the Labour Party, and the party gradually expelled Militant supporters. The Kinnock leadership had refused to support the 1984–1985 miner’s strike over pit closures, a decision that the party’s left wing and the National Union of Mineworkers blamed for the strike’s eventual defeat. 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.[229]

In the 1990s, the British Labour Party under Tony Blair enacted policies based on the free market economy to deliver public services via the private finance initiative. Influential in these policies was the idea of a “Third Way” which called for a re-evaluation of welfare state policies.[230] In 1995, the Labour Party re-defined its stance on socialism by re-wording Clause IV of its constitution, effectively rejecting socialism by removing all references to public, direct worker or municipal ownership of the means of production. The Labour Party stated: “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”.[231]

Contemporary socialist politics

Kwame Nkrumah, the first President of Ghana and theorist of African socialism, on a Soviet Union commemorative postage stamp

Africa

African socialism has been and continues to be a major ideology around the continent. Julius Nyerere was inspired by Fabian socialist ideals.[232] 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, Nelson Mandela 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 work for popular people’s planning and against the creation of a market economy in land and housing.

Asia

In Asia, states with socialist economies—such as the People’s Republic of China, North Korea, Laos and Vietnam—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 China living standards continued to improve rapidly despite the late-2000s recession, but centralised political control remained tight.[233] Brian Reynolds Myers in his book The Cleanest Race, later supported by other academics,[234][235] dismisses the idea that Juche is North Korea’s leading ideology, regarding its public exaltation as designed to deceive foreigners and that it exists to be praised and not actually read,[236] pointing out that North Korea’s constitution of 2009 omits all mention of communism.[235]

Though the authority of the state remained unchallenged under Đổi Mới, the government of Vietnam encourages private ownership of farms and factories, economic deregulation and foreign investment, while maintaining control over strategic industries.[212] The Vietnamese economy subsequently achieved strong growth in agricultural and industrial production, construction, exports and foreign investment. However, these reforms have also caused a rise in income inequality and gender disparities.[237][238]

Elsewhere in Asia, some elected socialist parties and communist parties remain prominent, particularly in India and Nepal. The Communist Party of Nepal[which?] in particular calls for multi-party democracy, social equality and economic prosperity.[239] In Singapore, a majority of the GDP is still generated from the state sector comprising government-linked companies.[240] In Japan, there has been a resurgent interest in the Japanese Communist Party among workers and youth.[241][242] In Malaysia, the Socialist Party of Malaysia got its first Member of Parliament, Dr. Jeyakumar Devaraj, after the 2008 general election. In 2010, there were 270 kibbutzim in Israel. Their factories and farms account for 9% of Israel’s industrial output, worth US$8 billion and 40% of its agricultural output, worth over $1.7 billion.[243] Some Kibbutzim had also developed substantial high-tech and military industries. Also in 2010, Kibbutz Sasa, containing some 200 members, generated $850 million in annual revenue from its military-plastics industry.[244]

Europe

The United Nations World Happiness Report 2013 shows that the happiest nations are concentrated in Northern Europe, where the Nordic model of social democracy is employed, with Denmark topping the list. This is at times attributed to the success of the Nordic model in the region. The Nordic countries ranked highest on the metrics of real GDP per capita, healthy life expectancy, having someone to count on, perceived freedom to make life choices, generosity and freedom from corruption.[245] Indeed, the indicators of Freedom in the World have listed Scandinavian countries as ranking high on indicators such as press and economic freedom.

The objectives of the Party of European Socialists, the European Parliament’s socialist and social democratic 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—Liberté, égalité, fraternité—is promoted as essential socialist values.[246] To the left of the PES at the European level is the Party of the European Left (PEL), also commonly abbreviated “European Left”), which is a political party at the European level and an association of democratic socialist, socialist[247] and communist[247] political parties in the European Union and other European countries. It was formed in January 2004 for the purposes of running in the 2004 European Parliament elections. PEL was founded on 8–9 May 2004 in Rome.[248] Elected MEPs from member parties of the European Left sit in the European United Left–Nordic Green Left (GUE/NGL) group in the European parliament.

The socialist Left Party in Germany grew in popularity[249] 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.[250] Communist candidate Dimitris Christofias won a crucial presidential runoff in Cyprus, defeating his conservative rival with a majority of 53%.[251] 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) more than doubled its parliamentary representation to 23 seats from 11, making it the fourth largest party.[252] In 2011, the Social Democrats, Socialist People’s Party and the Danish Social Liberal Party formed government, after a slight victory over the main rival political coalition. They were led by Helle Thorning-Schmidt, and had the Red-Green Alliance as a supporting party.

In Norway, the Red-Green Coalition consists of the Labour Party (Ap), the Socialist Left Party (SV) and the Centre Party (Sp) and governed the country as a majority government from the 2005 general election until 2013.

In the Greek legislative election of January 2015, the Coalition of the Radical Left (SYRIZA) led by Alexis Tsipras won a legislative election for the first time while the Communist Party of Greece won 15 seats in parliament. SYRIZA has been characterised as an anti-establishment party,[253] whose success has sent “shock-waves across the EU”.[254]

In the United Kingdom, 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 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.[255][256][257] In the following May 2010 United Kingdom general election, the Trade Unionist and Socialist Coalition, launched in January 2010[258] 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.[259][260] The Trade Unionist and Socialist Coalition contested the 2011 local elections, having gained the endorsement of the RMT June 2010 conference, but gained no seats.[261] Left Unity was also founded in 2013 after the film director Ken Loach appealed for a new party of the left to replace the Labour Party, which he claimed had failed to oppose austerity and had shifted towards neoliberalism.[262][263][264][265] In 2015, following a defeat at the 2015 United Kingdom general election, self-described socialist Jeremy Corbyn took over from Ed Miliband as leader of the Labour Party.[266]

In France, Olivier Besancenot, the Revolutionary Communist League (LCR) candidate in the 2007 presidential election, received 1,498,581 votes, 4.08%, double that of the communist candidate.[267] 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”.[268]

On 25 May 2014, the Spanish left-wing party Podemos entered candidates for the 2014 European parliamentary elections, some of which were unemployed. In a surprise result, it polled 7.98% of the vote and thus was awarded five seats out of 54[269][270] while the older United Left was the third largest overall force obtaining 10.03% and 5 seats, 4 more than the previous elections.[271]

The current government of Portugal was established on 26 November 2015 as a Socialist Party (PS) minority government led by prime minister António Costa. Costa succeeded in securing support for a Socialist minority government by the Left Bloc (B.E.), the Portuguese Communist Party (PCP) and the Ecologist Party “The Greens” (PEV).[272]

All around Europe and in some places of Latin America there exists a social centre and squatting movement mainly inspired by autonomist and anarchist ideas.[273][274]

North America

According to a 2013 article in The Guardian, “[c]ontrary to popular belief, Americans don’t have an innate allergy to socialism. Milwaukee has had several socialist mayors (Frank Zeidler, Emil Seidel and Daniel Hoan), and there is currently an independent socialist in the US Senate, Bernie Sanders of Vermont”.[275] Sanders, once mayor of Vermont’s largest city, Burlington, has described himself as a democratic socialist[276][277] and has praised Scandinavian-style social democracy.[278][279] In 2016, Sanders made a bid for the Democratic Party presidential candidate, thereby gaining considerable popular support, particularly among the younger generation, but lost the nomination to Hillary Clinton.

Anti-capitalism, anarchism and the anti-globalisation movement rose to prominence through events such as protests against the World Trade Organization Ministerial Conference of 1999 in Seattle. Socialist-inspired groups played an important role in these movements, which nevertheless embraced much broader layers of the population and were championed by figures such as Noam Chomsky. In Canada, the Co-operative Commonwealth Federation (CCF), the precursor to the social democratic New Democratic Party (NDP), had significant success in provincial politics. In 1944, the Saskatchewan CCF formed the first socialist government in North America. At the federal level, the NDP was the Official Opposition, from 2011 through 2015.[280]

Latin America and Caribbean

For the Encyclopedia Britannica, “the attempt by Salvador Allende to unite Marxists and other reformers in a socialist reconstruction of Chile is most representative of the direction that Latin American socialists have taken since the late 20th century. […] Several socialist (or socialist-leaning) leaders have followed Allende’s example in winning election to office in Latin American countries”.[75] Venezuelan President Hugo Chávez, Nicaraguan President Daniel Ortega, Bolivian President Evo Morales and Ecuadorian president Rafael Correa refer to their political programmes as socialist and Chávez 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”.[281] Chávez was also reelected in October 2012 for his third six-year term as President, but he died in March 2013 from cancer. After Chávez’s death on 5 March 2013, Vice President from Chavez’s party Nicolás Maduro assumed the powers and responsibilities of the President. A special election was held on 14 April of the same year to elect a new President, which Maduro won by a tight margin as the candidate of the United Socialist Party of Venezuela and he was formally inaugurated on 19 April.[282]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.[283][284][285]

Presidents Fernando Lugo of Paraguay, Evo Morales of Bolivia, Luiz Inácio Lula da Silva of Brazil, Rafael Correa of Ecuador and Hugo Chávez of Venezuela in World Social Forum for Latin America

Foro de São Paulo is a conference of leftist political parties and other organisations from Latin America and the Caribbean. It was launched by the Workers’ Party (Portuguese: Partido dos Trabalhadores – PT) of Brazil in 1990 in the city of São Paulo. The Forum of São Paulo was constituted in 1990 when the Brazilian Workers’ Party approached other parties and social movements of Latin America and the Caribbean with the objective of debating the new international scenario after the fall of the Berlin Wall and the consequences of the implementation of what were taken as neoliberal policies adopted at the time by contemporary right-leaning governments in the region, the stated main objective of the conference being to argue for alternatives to neoliberalism.[286] Among its member include current socialist and social-democratic parties currently in government in the region such as Bolivia’s Movement for Socialism, Brazil’s Workers Party, the Communist Party of Cuba, Ecuador’s PAIS Alliance, the United Socialist Party of Venezuela, the Socialist Party of Chile, Uruguay’s Broad Front, Nicaragua’s Sandinista National Liberation Front and El Salvador’s Farabundo Martí National Liberation Front.

Oceania

Australia saw an increase in interest of socialism in the early 21st century, especially amongst youth.[287] It is strongest in Victoria, where three socialist parties have merged into the Victorian Socialists, who aim to address problems in housing and public transportation.

New Zealand has a small socialist scene, mainly dominated by Trotskyist groups. The current prime minister Jacinda Ardern has publicly condemned capitalism but describes herself as a social democrat.[citation needed]

Melanesian Socialism developed in the 1980s, inspired by African Socialism. It aims to achieve full independence from Britain and France in Melanesian territories and creation of a Melanesian federal union. It is very popular with the New Caledonia independence movement.[citation needed]

International socialism

The Progressive Alliance is a political international founded on 22 May 2013 by political parties, the majority of whom are current or former members of the Socialist International. The organisation states the aim of becoming the global network of “the progressive“, democratic, social-democratic, socialist and labour movement“.[288][289]

Social and political theory

Early socialist thought took influences from a diverse range of philosophies such as civic republicanism, Enlightenment rationalism, romanticism, forms of materialism, Christianity (both Catholic and Protestant), natural law and natural rights theory, utilitarianism and liberal political economy.[290] Another philosophical basis for a lot of early socialism was the emergence of positivism during the European Enlightenment. Positivism held that both the natural and social worlds could be understood through scientific knowledge and be analysed using scientific methods. This core outlook influenced early social scientists and different types of socialists ranging from anarchists like Peter Kropotkin to technocrats like Saint Simon.[291]

The fundamental objective of socialism is to attain an advanced level of material production and therefore greater productivity, efficiency and rationality as compared to capitalism and all previous systems, under the view that an expansion of human productive capability is the basis for the extension of freedom and equality in society.[292] Many forms of socialist theory hold that human behaviour is largely shaped by the social environment. In particular, socialism holds that social mores, values, cultural traits and economic practices are social creations and not the result of an immutable natural law.[293][294] The object of their critique is thus not human avarice or human consciousness, but the material conditions and man-made social systems (i.e. the economic structure of society) that gives rise to observed social problems and inefficiencies. Bertrand Russell, often considered to be the father of analytic philosophy, identified as a socialist. Russell opposed the class struggle aspects of Marxism, viewing socialism solely as an adjustment of economic relations to accommodate modern machine production to benefit all of humanity through the progressive reduction of necessary work time.[295]

Socialists view creativity as an essential aspect of human nature and define freedom as a state of being where individuals are able to express their creativity unhindered by constraints of both material scarcity and coercive social institutions.[296] The socialist concept of individuality is thus intertwined with the concept of individual creative expression. Karl Marx believed that expansion of the productive forces and technology was the basis for the expansion of human freedom and that socialism, being a system that is consistent with modern developments in technology, would enable the flourishing of “free individualities” through the progressive reduction of necessary labour time. The reduction of necessary labour time to a minimum would grant individuals the opportunity to pursue the development of their true individuality and creativity.[297]

Criticism of capitalism

Socialists argue that the accumulation of capital generates waste through externalities that require costly corrective regulatory measures. They also point out that this process generates wasteful industries and practices that exist only to generate sufficient demand for products to be sold at a profit (such as high-pressure advertisement), thereby creating rather than satisfying economic demand.[298][299]

Socialists argue that capitalism consists of irrational activity, such as the purchasing of commodities only to sell at a later time when their price appreciates, rather than for consumption, even if the commodity cannot be sold at a profit to individuals in need and therefore a crucial criticism often made by socialists is that “making money”, or accumulation of capital, does not correspond to the satisfaction of demand (the production of use-values).[300] The fundamental criterion for economic activity in capitalism is the accumulation of capital for reinvestment in production, but this spurs the development of new, non-productive industries that do not produce use-value and only exist to keep the accumulation process afloat (otherwise the system goes into crisis), such as the spread of the financial industry, contributing to the formation of economic bubbles.[301]

Socialists view private property relations as limiting the potential of productive forces in the economy. According to socialists, private property becomes obsolete when it concentrates into centralised, socialised institutions based on private appropriation of revenuebut based on cooperative work and internal planning in allocation of inputsuntil the role of the capitalist becomes redundant.[302] With no need for capital accumulation and a class of owners, private property in the means of production is perceived as being an outdated form of economic organisation that should be replaced by a free association of individuals based on public or common ownership of these socialised assets.[303][304] Private ownership imposes constraints on planning, leading to uncoordinated economic decisions that result in business fluctuations, unemployment and a tremendous waste of material resources during crisis of overproduction.[305]

Excessive disparities in income distribution lead to social instability and require costly corrective measures in the form of redistributive taxation, which incurs heavy administrative costs while weakening the incentive to work, inviting dishonesty and increasing the likelihood of tax evasion while (the corrective measures) reduce the overall efficiency of the market economy.[306] These corrective policies limit the incentive system of the market by providing things such as minimum wages, unemployment insurance, taxing profits and reducing the reserve army of labour, resulting in reduced incentives for capitalists to invest in more production. In essence, social welfare policies cripple capitalism and its incentive system and are thus unsustainable in the long-run.[307] Marxists argue that the establishment of a socialist mode of production is the only way to overcome these deficiencies. Socialists and specifically Marxian socialists argue that the inherent conflict of interests between the working class and capital prevent optimal use of available human resources and leads to contradictory interest groups (labour and business) striving to influence the state to intervene in the economy in their favour at the expense of overall economic efficiency.

Early socialists (utopian socialists and Ricardian socialists) criticised capitalism for concentrating power and wealth within a small segment of society.[308] In addition, they complained that capitalism does not utilise available technology and resources to their maximum potential in the interests of the public.[304]

Marxism

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.

The writings of Karl Marx provided the basis for the development of Marxist political theory and Marxian economics

Karl Marx and Friedrich Engels argued that socialism would emerge from historical necessity as capitalism rendered itself obsolete and unsustainable from increasing internal contradictions emerging from the development of the productive forces and technology. It was these advances in the productive forces combined with the old social relations of production of capitalism that would generate contradictions, leading to working-class consciousness.[310]

Marx and Engels held the view that 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 and consequently, overthrowing the state that upheld this economic order. 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. The Marxist conception of socialism is that of a specific historical phase that would 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 would 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.[311][312] 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.[309]

Role of the state

Socialists have taken different perspectives on the state and the role it should play in revolutionary struggles, in constructing socialism and within an established socialist economy.

In the 19th century the philosophy of state socialism was first explicitly expounded by the German political philosopher Ferdinand Lassalle. In contrast to Karl Marx’s perspective of the state, Lassalle rejected the concept of the state as a class-based power structure whose main function was to preserve existing class structures. Thus Lassalle also rejected the Marxist view that the state was destined to “wither away”. Lassalle considered the state to be an entity independent of class allegiances and an instrument of justice that would therefore be essential for achieving socialism.[313]

Preceding the Bolshevik-led revolution in Russia, many socialists including reformists, orthodox Marxist currents such as council communism, anarchists and libertarian socialists criticised the idea of using the state to conduct central planning and own the means of production as a way to establish socialism. Following the victory of Leninism in Russia, the idea of “state socialism” spread rapidly throughout the socialist movement and eventually state socialism came to be identified with the Soviet economic model.[314]

Joseph Schumpeter rejected the association of socialism (and social ownership) with state ownership over the means of production because the state as it exists in its current form is a product of capitalist society and cannot be transplanted to a different institutional framework. Schumpeter argued that there would be different institutions within socialism than those that exist within modern capitalism, just as feudalism had its own distinct and unique institutional forms. The state, along with concepts like property and taxation, were concepts exclusive to commercial society (capitalism) and attempting to place them within the context of a future socialist society would amount to a distortion of these concepts by using them out of context.[315]

Utopian versus scientific

Utopian socialism is a term used to define the first currents of modern socialist thought as exemplified by the work of Henri de Saint-Simon, Charles Fourier and Robert Owen, which inspired Karl Marx and other early socialists.[316] However, visions of imaginary ideal societies, which competed with revolutionary social democratic movements, were viewed as not being grounded in the material conditions of society and as reactionary.[317] Although it is technically possible for any set of ideas or any person living at any time in history to be a utopian socialist, the term is most often applied to those socialists who lived in the first quarter of the 19th century who were ascribed the label “utopian” by later socialists as a negative term in order to imply naivete and dismiss their ideas as fanciful or unrealistic.[79]

Religious sects whose members live communally such as the Hutterites, for example, are not usually called “utopian socialists”, although their way of living is a prime example. They have been categorised as religious socialists by some. Likewise, modern intentional communities based on socialist ideas could also be categorised as “utopian socialist”.

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 “[w]hat the bourgeoisie produces above all is its own grave diggers”,[318] namely the working class, which must become conscious of the historical objectives set it by society.

Reform versus revolution

Revolutionary socialists believe that a social revolution is necessary to effect structural changes to the socioeconomic structure of society. Among revolutionary socialists there are differences in strategy, theory and the definition of “revolution”. Orthodox Marxists and left communists take an impossibilist stance, believing that revolution should be spontaneous as a result of contradictions in society due to technological changes in the productive forces. Lenin theorised that under capitalism the workers cannot achieve class consciousness beyond organising into unions and making demands of the capitalists. Therefore, Leninists advocate that it is historically necessary for a vanguard of class conscious revolutionaries to take a central role in coordinating the social revolution to overthrow the capitalist state and eventually the institution of the state altogether.[319] “Revolution” is not necessarily defined by revolutionary socialists as violent insurrection,[320] but as a complete dismantling and rapid transformation of all areas of class society led by the majority of the masses: the working class.

Reformism is generally associated with social democracy and gradualist democratic socialism. Reformism is the belief that socialists should stand in parliamentary elections within capitalist society and if elected utilise the machinery of government to pass political and social reforms for the purposes of ameliorating the instabilities and inequities of capitalism.

Economics

Socialist economics starts from the premise that “individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members”.[88]

The original conception of socialism was an economic system whereby production was organised in a way to directly produce goods and services for their utility (or use-value in classical and Marxian economics): the direct allocation of resources in terms of physical units as opposed to financial calculation and the economic laws of capitalism (see law of value), often entailing the end of capitalistic economic categories such as rent, interest, profit and money.[321] In a fully developed socialist economy, production and balancing factor inputs with outputs becomes a technical process to be undertaken by engineers.[322]

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 in a social dividend as opposed to private capital owners.[323] Variations of market socialism include libertarian proposals such as mutualism, based on classical economics, and neoclassical economic models such as the Lange Model. However, some economists such as Joseph Stiglitz, Mancur Olson and others not specifically advancing anti-socialists positions have shown that prevailing economic models upon which such democratic or market socialism models might be based have logical flaws or unworkable presuppositions.[324][325]

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, municipalisation or autonomous collective institutions. Some socialists feel that in a socialist economy, at least the “commanding heights” of the economy must be publicly owned.[326] However, economic liberals and right libertarians view private ownership 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 and view the economic dynamics of capitalism as immutable and absolute, therefore they perceive public ownership of the means of production, cooperatives and economic planning as infringements upon liberty.[327][328]

Management and control over the activities of enterprises are 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.[329]

The role and use of money in a hypothetical socialist economy is a contested issue. According to the Austrian school economist Ludwig von Mises, an economic system that does not use money, financial calculation and market pricing would be unable to effectively value capital goods and coordinate production and therefore these types of socialism are impossible because they lack the necessary information to perform economic calculation in the first place.[330][331] Socialists including Karl Marx, Robert Owen, Pierre-Joseph Proudhon and John Stuart Mill advocated various forms of labour vouchers or labour credits, which like money would be used to acquire articles of consumption, but unlike money they are unable to become capital and would not be used to allocate resources within the production process. Bolshevik revolutionary Leon Trotsky argued that money could not be arbitrarily abolished following a socialist revolution. Money had to exhaust its “historic mission”, meaning it would have to be used until its function became redundant, eventually being transformed into bookkeeping receipts for statisticians and only in the more distant future would money not be required for even that role.[332]

The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil… I am convinced there is only one way to eliminate these grave evils, 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 utilised 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.

Planned economy

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 economic planning. There are two major types of planning: decentralised-planning and centralised-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.[334]

The most prominent example of a planned economy was 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 the 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.[335] Studies by economists of various political persuasions on the actual functioning of the Soviet economy indicate that it was not actually a planned economy. Instead of conscious planning, the Soviet economy was based on a process whereby the plan was modified by localised agents and the original plans went largely unfulfilled. Planning agencies, ministries and enterprises all adapted and bargained with each other during the formulation of the plan as opposed to following a plan passed down from a higher authority, leading some economists to suggest that planning did not actually take place within the Soviet economy and that a better description would be an “administered” or “managed” economy.[336]

Although central planning was largely supported by Marxist–Leninists, some factions within the Soviet Union before the rise of Stalinism held positions contrary to central planning. Leon Trotsky rejected central planning in favour of decentralised planning. He argued that central planners, regardless of their intellectual capacity, would be unable to coordinate effectively all economic activity within an economy because they operated without the input and tacit knowledge embodied by the participation of the millions of people in the economy. As a result, central planners would be unable to respond to local economic conditions.[337] State socialism is unfeasible in this view because information cannot be aggregated by a central body and effectively used to formulate a plan for an entire economy, because doing so would result in distorted or absent price signals.[338]

Self-managed economy

A self-managed, decentralised economy is based on autonomous self-regulating economic units and a decentralised mechanism of resource allocation and decision-making. This model 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.[339] Guild socialism is a political movement advocating workers’ control of industry through the medium of trade-related guilds “in an implied contractual relationship with the public”.[340] It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century.[340] It was strongly associated with G. D. H. Cole and influenced by the ideas of William Morris.

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.[341] 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.[342] 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.[343] 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.[344]

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.[345]

Anarcho-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.[346][347] Anarcho-syndicalism was practised in Catalonia and other places in the Spanish Revolution during the Spanish Civil War. Sam Dolgoff estimated that about eight million people participated directly or at least indirectly in the Spanish Revolution.[348]

The economy of the former Socialist Federal Republic of Yugoslavia established a system based on market-based allocation, social ownership of the means of production and self-management within firms. This system substituted Yugoslavia’s Soviet-type central planning with a decentralised, self-managed system after reforms in 1953.[349]

The Marxian economist Richard D. Wolff argues that “re-organising production so that workers become collectively self-directed at their work-sites” not only moves society beyond both capitalism and state socialism of the last century, but would also mark another milestone in human history, similar to earlier transitions out of slavery and feudalism.[350] As an example, Wolff claims that Mondragon is “a stunningly successful alternative to the capitalist organisation of production”.[351]

State-directed economy

State socialism can be used to classify any variety of socialist philosophies that advocates the ownership of the means of production by the state apparatus, either as a transitional stage between capitalism and socialism, or as an end-goal in itself. Typically it refers to a form of technocratic management, whereby technical specialists administer or manage economic enterprises on behalf of society (and the public interest) instead of workers’ councils or workplace democracy.

A state-directed economy may refer to a type of mixed economy consisting of public ownership over large industries, as promoted by various Social democratic political parties during the 20th century. This ideology influenced the policies of the British Labour Party during Clement Attlee’s administration. In the biography of the 1945 United Kingdom Labour Party Prime Minister Clement Attlee, Francis Beckett states: “[T]he government… wanted what would become known as a mixed economy”.[352]

Nationalisation in the United Kingdom 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, whereas 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.[353][354]

Market socialism

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, collectively sustain the enterprise or finance public institutions.[355] 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. 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.[356] Yugoslavia implemented a market socialist economy based on cooperatives and worker self-management.

Pierre-Joseph Proudhon, main theorist of mutualism and influential French socialist thinker

Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labour in the free market.[357] Integral to the scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.[358] Mutualism is based on a labour theory of value that holds that when labour or its product is sold, in exchange it ought to receive goods or services embodying “the amount of labour necessary to produce an article of exactly similar and equal utility”.[359]

The current economic system in China is formally referred to as a 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,[360] with a private sector mainly engaged in commodity production and light industry responsible from anywhere between 33%[361] to over 70% of GDP generated in 2005.[362] Although there has been a rapid expansion of private-sector activity since the 1980s, privatisation of state assets was virtually halted and were partially reversed in 2005.[363] The current Chinese economy consists of 150 corporatised state-owned enterprises that report directly to China’s central government.[364] By 2008, these state-owned corporations had become increasingly dynamic and generated large increases in revenue for the state,[365][366] resulting in a state-sector led recovery during the 2009 financial crises while accounting for most of China’s economic growth.[367] However, the Chinese economic model is widely cited as a contemporary form of state capitalism, the major difference between Western capitalism and the Chinese model being the degree of state-ownership of shares in publicly listed corporations.

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.[368]

Politics

Socialists in Union Square, New York City on May Day 1912

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.[369] In his Dictionary of Socialism (1924), Angelo S. Rappoport 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); an 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.[370] In The Concepts of Socialism (1975), Bhikhu Parekh identifies four core principles of socialism and particularly socialist society: sociality, social responsibility, cooperation and planning.[371] In his study Ideologies and Political Theory (1996), Michael Freeden 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.[371]

Anarchism

Anarchism is a political philosophy that advocates stateless societies often defined as self-governed voluntary institutions,[372][373][374][375] but that several authors have defined as more specific institutions based on non-hierarchical free associations.[376][377][378][379] Anarchism holds the state to be undesirable, unnecessary or harmful.[380][381] While anti-statism is central, some argue[382] that anarchism entails opposing authority or hierarchical organisation in the conduct of human relations including, but not limited to, the state system.[376][383][384][385][386][387][388] Mutualists advocate 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 a gift economy and anarcho-syndicalists worker’s direct action and the general strike.

Democratic socialism

Modern democratic socialism is a broad political movement that seeks to promote the ideals of socialism within the context of a democratic system. Some democratic socialists support social democracy as a temporary measure to reform the current system while others reject reformism in favour of more revolutionary methods. Modern social democracy emphasises a program of gradual legislative modification 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.

The major difference between social democracy and democratic socialism is the object of their politics: contemporary social democrats support a welfare state and unemployment insurance as a means to “humanise” capitalism, whereas democratic socialists seek to replace capitalism with a socialist economic system, arguing that any attempt to “humanise” capitalism through regulations and welfare policies would distort the market and create economic contradictions.[389]

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 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.[390]

You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. Now this means that we are treading in difficult water, because it really means that we are saying that something is wrong with capitalism. There must be a better distribution of wealth, and maybe America must move toward a democratic socialism.

Leninism and precedents

Blanquism refers to a conception of revolution generally attributed to Louis Auguste Blanqui which holds that socialist revolution should be carried out by a relatively small group of highly organised and secretive conspirators.[394] Having seized power, the revolutionaries would then use the power of the state to introduce socialism. It is considered a particular sort of “putschism”—that is, the view that political revolution should take the form of a putsch or coup d’état.[395] Rosa Luxemburg and Eduard Bernstein[396] have criticised Vladimir Lenin that his conception of revolution was elitist and essentially Blanquist.[397] Marxism–Leninism is a political ideology combining Marxism (the scientific socialist concepts theorised by Karl Marx and Friedrich Engels) and Leninism (Lenin’s theoretical expansions of Marxism which include anti-imperialism, democratic centralism and party-building principles).[398] Marxism–Leninism was the official ideology of the Communist Party of the Soviet Union and of the Communist International (1919–1943) and later it became the main guiding ideology for Trotskyists, Maoists and Stalinists.

Libertarian socialism

The first anarchist journal to use the term “libertarian” was Le Libertaire, Journal du Mouvement Social and it was published in New York City between 1858 and 1861 by French anarcho-communist Joseph Déjacque,[399] the first recorded person to describe himself as “libertarian”[400]

Libertarian socialism (sometimes called social anarchism,[401][402] left-libertarianism[403][404] and socialist libertarianism)[405] is a group of anti-authoritarian[406] political philosophies inside the socialist movement that rejects socialism as centralised state ownership and control of the economy[407] including criticism of wage labour relationships within the workplace,[408] as well as the state itself.[409] It emphasises workers’ self-management of the workplace[409] and decentralised structures of political organisation,[410] asserting that a society based on freedom and equality can be achieved through abolishing authoritarian institutions that control certain means of production and subordinate the majority to an owning class or political and economic elite.[411] Libertarian socialists generally place their hopes in decentralised means of direct democracy and federal or confederal associations such as libertarian municipalism, citizens’ assemblies, trade unions, and workers’ councils.[412][413] Relatedly, anarcho-syndicalist Gaston Leval explained: “We therefore foresee a Society in which all activities will be coordinated, a structure that has, at the same time, sufficient flexibility to permit the greatest possible autonomy for social life, or for the life of each enterprise, and enough cohesiveness to prevent all disorder…In a well-organised society, all of these things must be systematically accomplished by means of parallel federations, vertically united at the highest levels, constituting one vast organism in which all economic functions will be performed in solidarity with all others and that will permanently preserve the necessary cohesion”. All of this is generally done within a general call for libertarian[414] and voluntary human relationships[415] through the identification, criticism and practical dismantling of illegitimate authority in all aspects of human life.[420] As such, libertarian socialism within the larger socialist movement seeks to distinguish itself both from Leninism/Bolshevism and from social democracy.[421]

Past and present political philosophies and movements commonly described as libertarian socialist include anarchism (especially anarchist communism, anarchist collectivism, anarcho-syndicalism[422] and mutualism)[423] as well as autonomism, Communalism, participism, revolutionary syndicalism and libertarian Marxist philosophies such as council communism and Luxemburgism;[424] as well as some versions of utopian socialism[425] and individualist anarchism.[426][427][428]

Religious socialism

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 Medina welfare state established by 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 and liberal socialism

Social democracy is a political ideology which “is derived from a socialist tradition of political thought. Many social democrats refer to themselves as socialists or democratic socialists, and some, for example Tony Blair, use or have used these terms interchangeably.[429][430][431] Others have opined that there are clear differences between the three terms, and preferred to describe their own political beliefs by using the term ‘social democracy’ only”.[432] There are two main directions, either to establish democratic socialism, or to build a welfare state within the framework of the capitalist system. The first variant has officially its goal by establishing democratic socialism through reformist and gradualist methods.[433] In the second variant, social democracy becomes a policy regime involving a welfare state, collective bargaining schemes, support for publicly financed public services and a capitalist-based economy like a mixed economy. It is often used in this manner to refer to the social models and economic policies prominent in Western and Northern Europe during the later half of the 20th century.[434][435] It has been described by Jerry Mander as “hybrid” economics, an active collaboration of capitalist and socialist visions and while such systems are not perfect they tend to provide high standards of living.[436] Numerous studies and surveys indicate that people tend to live happier lives in social democratic societies rather than neoliberal ones.[437][438][439][440]

Social democrats supporting the first variant advocate for a peaceful, evolutionary transition of the economy to socialism through progressive social reform of capitalism.[441][442] It asserts that the only acceptable constitutional form of government is representative democracy under the rule of law.[443] It promotes extending democratic decision-making beyond political democracy to include economic democracy to guarantee employees and other economic stakeholders sufficient rights of co-determination.[443] It supports a mixed economy that opposes the excesses of capitalism such as inequality, poverty and oppression of various groups, while rejecting both a totally free market or a fully planned economy.[444] Common social democratic policies include advocacy of universal social rights to attain universally accessible public services such as education, health care, workers’ compensation and other services, including child care and care for the elderly.[445] Social democracy is connected with the trade union labour movement and supports collective bargaining rights for workers.[446] Most social democratic parties are affiliated with the Socialist International.[433]

Liberal socialism is a socialist political philosophy that includes liberal principles within it.[447] Liberal socialism does not have the goal of abolishing capitalism with a socialist economy,[448] instead it supports a mixed economy that includes both public and private property in capital goods.[449][450] Although liberal socialism unequivocally favours a mixed market economy, it identifies legalistic and artificial monopolies to be the fault of capitalism[451] and opposes an entirely unregulated economy.[452] It considers both liberty and equality to be compatible and mutually dependent on each other.[447] Principles that can be described as “liberal socialist” have been based upon or developed by the following philosophers: John Stuart Mill, Eduard Bernstein, John Dewey, Carlo Rosselli, Norberto Bobbio and Chantal Mouffe.[453] Other important liberal socialist figures include Guido Calogero, Piero Gobetti, Leonard Trelawny Hobhouse, John Maynard Keynes and R. H. Tawney.[452] Liberal socialism has been particularly prominent in British and Italian politics.[452]

Socialism and modern progressive social movements

Socialist feminist Clara Zetkin and Rosa Luxemburg in 1910

Socialist feminism is a branch of feminism that focuses upon both the public and private spheres of a woman’s life and argues that liberation can only be achieved by working to end both the economic and cultural sources of women’s oppression.[454] Marxist feminism‘s foundation is laid by Friedrich Engels in his analysis of gender oppression in The Origin of the Family, Private Property, and the State (1884). August Bebel‘s Woman under Socialism (1879), the “single work dealing with sexuality most widely read by rank-and-file members of the Social Democratic Party of Germany (SPD)”.[455] In the late 19th and early 20th centuries, both Clara Zetkin and Eleanor Marx were against the demonisation of men and supported a proletariat revolution that would overcome as many male-female inequalities as possible.[456] As their movement already had the most radical demands in women’s equality, most Marxist leaders, including Clara Zetkin[457][458] and Alexandra Kollontai,[459][460] counterposed Marxism against liberal feminism rather than trying to combine them. Anarcha-feminism began with late 19th and early 20th century authors and theorists such as anarchist feminists Emma Goldman and Voltairine de Cleyre[461] In the Spanish Civil War, an anarcha-feminist group, Mujeres Libres (“Free Women”) linked to the Federación Anarquista Ibérica, organised to defend both anarchist and feminist ideas.[462] In 1972, the Chicago Women’s Liberation Union published “Socialist Feminism: A Strategy for the Women’s Movement”, which is believed to be the first to use the term “socialist feminism” in publication.[463]

Edward Carpenter, philosopher and activist who was instrumental in the foundation of the Fabian Society and the Labour Party as well as in the early LGBTI western movements

Many socialists were early advocates for LGBT rights. For early socialist Charles Fourier, true freedom could only occur without suppressing passions, as the suppression of passions is not only destructive to the individual, but to society as a whole. Writing before the advent of the term “homosexuality”, Fourier recognised that both men and women have a wide range of sexual needs and preferences which may change throughout their lives, including same-sex sexuality and androgénité. He argued that all sexual expressions should be enjoyed as long as people are not abused and that “affirming one’s difference” can actually enhance social integration.[464] In Oscar Wilde‘s The Soul of Man Under Socialism, he passionately advocates for an egalitarian society where wealth is shared by all, while warning of the dangers of social systems that crush individuality. Wilde’s libertarian socialist politics were shared by other figures who actively campaigned for homosexual emancipation in the late 19th century such as Edward Carpenter.[465] The Intermediate Sex: A Study of Some Transitional Types of Men and Women was a book from 1908 and an early work arguing for gay liberation written by Edward Carpenter[466] who was also an influential personality in the foundation of the Fabian Society and the Labour Party. After the Russian Revolution under the leadership of Vladimir Lenin and Leon Trotsky, the Soviet Union abolished previous laws against homosexuality.[467] Harry Hay was an early leader in the American LGBT rights movement as well as a member of the Communist Party USA. He is known for his roles in helping to found several gay organisations, including the Mattachine Society, the first sustained gay rights group in the United States which in its early days had a strong Marxist influence. The Encyclopedia of Homosexuality reports that “[a]s Marxists the founders of the group believed that the injustice and oppression which they suffered stemmed from relationships deeply embedded in the structure of American society”.[468] Also emerging from a number of events, such as the May 1968 insurrection in France, the anti-Vietnam war movement in the United States and the Stonewall riots of 1969, militant gay liberation organisations began to spring up around the world. Many saw their roots in left radicalism more than in the established homophile groups of the time,[469] though the Gay Liberation Front took an anti-capitalist stance and attacked the nuclear family and traditional gender roles.[470]

Eco-socialism, green socialism or socialist ecology is a political position merging aspects of Marxism, socialism and/or libertarian socialism with that of green politics, ecology and alter-globalisation. Eco-socialists generally believe that the expansion of the capitalist system is the cause of social exclusion, poverty, war and environmental degradation through globalisation and imperialism, under the supervision of repressive states and transnational structures.[471] Contrary to the depiction of Karl Marx by some environmentalists,[472] social ecologists[473] and fellow socialists[474] as a productivist who favoured the domination of nature, eco-socialists have revisited Marx’s writings and believe that he “was a main originator of the ecological world-view”.[475] Eco-socialist authors, like John Bellamy Foster[476] and Paul Burkett,[477] point to Marx’s discussion of a “metabolic rift” between man and nature, his statement that “private ownership of the globe by single individuals will appear quite absurd as private ownership of one man by another” and his observation that a society must “hand it [the planet] down to succeeding generations in an improved condition”.[478] The English socialist William Morris is largely credited with developing key principles of what was later called eco-socialism.[479] During the 1880s and 1890s, Morris promoted his eco-socialist ideas within the Social Democratic Federation and Socialist League.[480] Green anarchism, or ecoanarchism, is a school of thought within anarchism which puts a particular emphasis on environmental issues. An important early influence was the thought of the American anarchist Henry David Thoreau and his book Walden[481] and Élisée Reclus.[482][483]

In the late 19th century, there emerged anarcho-naturism as the fusion of anarchism and naturist philosophies within individualist anarchist circles in France, Spain, Cuba[484] and Portugal.[485] Social ecology is closely related to the work and ideas of Murray Bookchin and influenced by anarchist Peter Kropotkin. Bookchin’s first book, Our Synthetic Environment, was published under the pseudonym Lewis Herber in 1962, a few months before Rachel Carson‘s Silent Spring.[486] His groundbreaking essay “Ecology and Revolutionary Thought” introduced ecology as a concept in radical politics.[487] In the 1970s, Barry Commoner, suggesting a left-wing response to the Limits to Growth model that predicted catastrophic resource depletion and spurred environmentalism, postulated that capitalist technologies were chiefly responsible for environmental degradation as opposed to population pressures.[488] The 1990s saw the socialist feminists Mary Mellor[489] and Ariel Salleh[490] address environmental issues within an eco-socialist paradigm. With the rising profile of the anti-globalisation movement in the Global South, an “environmentalism of the poor” combining ecological awareness and social justice has also become prominent.[491] In 1994, David Pepper also released his important work, Ecosocialism: From Deep Ecology to Social Justice, which critiques the current approach of many within green politics, particularly deep ecologists.[492] Currently, many green parties around the world, such as the Dutch Green Left Party (GroenLinks), contain strong eco-socialist elements. Radical red-green alliances have been formed in many countries by eco-socialists, radical greens and other radical left groups. In Denmark, the Red-Green Alliance was formed as a coalition of numerous radical parties. Within the European Parliament, a number of far-left parties from Northern Europe have organised themselves into the Nordic Green Left Alliance.

Syndicalism

Syndicalism is a social movement that operates through industrial trade unions and rejects state socialism and the use of establishment politics to establish or promote socialism. They reject using state power to construct a socialist society, favouring strategies such as the general strike. Syndicalists advocate a socialist economy based on federated unions or syndicates of workers who own and manage the means of production. Some Marxist currents advocate syndicalism, such as De-Leonism. Anarcho-syndicalism is a theory of anarchism which views syndicalism as a method for workers in capitalist society to gain control of an economy and with that control influence broader society. The Spanish Revolution largely orchestrated by the anarcho-syndicalist trade union CNT during the Spanish Civil War offers an historical example.[493] The International Workers’ Association is an international federation of anarcho-syndicalist labour unions and initiatives.

Criticism

See also

Notes …

https://en.wikipedia.org/wiki/Socialism

 

 

Story 2: Progressive Socialist Democrats Want To Impeach Trump — Speaker Pelosi Calls For Meeting To Discuss Fake Impeachment Vs. Real Impreachment — Please Impeach and Lose The House By 30 Plus Seats — Videos.

Nancy Pelosi calls for special meeting with House Democrats to discuss party views on impeachment

Democrats’ Impeachment Divide Tests Pelosi

House Speaker Nancy Pelosi, D-Calif., speaks during a weekly news conference on May 16 on Capitol Hill. Pelosi is dealing with rising calls for impeachment proceedings against President Trump.

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Updated at 4:19 p.m. ET

House Speaker Nancy Pelosi will convene a meeting Wednesday morning to hear from Democrats on whether to move forward with impeachment proceedings against President Trump.

Pelosi, a public skeptic of impeachment, is confronting a rising tide of support for it among rank-and-file House Democrats and members of her own leadership team. Democrats are outraged by the Trump administration’s ongoing effort to stymie congressional oversight into the president, his administration, and the findings in special counsel Robert Mueller’s report.

“She’s hearing the views of the caucus, and listening to different perspectives and we’re having that debate,” said Rep. Seth Moulton, D-Mass., who is running for president. Moulton supports opening an impeachment inquiry based on the argument being made by a number of Democrats that it gives the House a stronger legal hand in securing documents, testimony and cooperation from the Trump administration.

“I don’t think there’s any question but there’s a growing realization in the caucus that impeachment is inevitable. It’s not a question of if but when,” said Rep. John Yarmuth, D-Ky., a member of the leadership’s whip team. Yarmuth said the administration’s “blanket resistance” to their oversight efforts is changing the calculation. “I think the speaker is right that these investigations need to go on. I don’t think they should go on interminably,” he said, adding that he expected a decision on impeachment to be made by the end of the summer.

Yarmuth and other top leaders have characterized those pushing for impeachment as a small but growing minority dissatisfied with Pelosi’s focus on traditional committee investigations. The group largely confined their frustrations to closed-door sessions until recently.

“I think what is happening is that the initial aim was to investigate and then see what we had. The problem is we can’t get any information. The president is blocking us,” House Oversight and Reform Committee Chairman Elijah Cummings, D-Md., said. “I think we’re in a position where we’re moving more and more towards [impeachment] because he’s not leaving us with any choices. You don’t have any choices.”

Cummings maintained that moving ahead with impeachment could assist their efforts. “Once you file for impeachment you’re under a whole new different set of rules. And you have a much broader opportunity to get things.”

Rep. David Cicilline, D-R.I., a member of the Judiciary Committee and party leadership who supports moving forward with impeachment, said “the principal reason” to do so was to send a message to the administration and the public. “There’s no question that opening impeachment conveys to all the relevant parties the seriousness of the inquiry. I think we still have the ability to get all the documents and the witnesses that we need under our traditional oversight responsibilities,” he said, adding, “It’s important to communicate a very strong message to the administration, and opening a formal inquiry is a good way to communicate that message.”

House Democratic Caucus Chairman Hakeem Jeffries, D-N.Y., downplayed the internal turmoil, telling reporters Tuesday: “I disagree with the notion that a growing number of the House Democratic Caucus want to jump straight to impeachment,” he said. However, he said, Democrats have a “responsibility to serve as a check and balance on an out-of-control executive branch.”

Trump’s latest efforts to block former White House counsel Don McGahn from testifying Tuesday before the House Judiciary Committee, and McGahn’s refusal to appear, are the latest affront to Congress prompting Democrats to reconsider their strategy. “We will hold this president accountable, one way or the other,” Judiciary Chairman Jerry Nadler, D-N.Y., said at the hearing.

Citing executive privilege, the administration has also blocked congressional demands for an unredacted copy of Mueller’s report, which Attorney General William Barr declined to deliver to the Judiciary Committee. Barr was held in contempt by the committee, but a full House vote is not yet scheduled.

On another front, the administration is refusing to comply with Ways and Means Chairman Richard Neal’s request for six years of the president’s tax returns, which tax law gives the chairman legal authority to access.

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., one of the first House Democrats to call for Trump’s impeachment, said those tactics from the administration are accelerating the impeachment push.

“I think many members are a little bit shocked and surprised that the president would be this blatant in instructing those in the administration and outside the administration not to come and testify,” Waters said. “I think what he’s trying to do and I think what they think he’s trying to do is render us toothless and say we’re not that important.”

While Democrats are waging the battle against the administration in the courts — andthe courts have historically favored Congress in these cases — it can take months or years to reach final legal conclusions, and Democrats believe Trump is using these court fights as a delaying tactic to get past the 2020 elections.

House Democrats did score a significant legal victory on Monday when federal Judge Amit Mehta ruled that an accounting company, Mazars, must comply with a subpoena issued by Cummings. Trump said hours later that there would be an appeal, and on Tuesday morning papers were filed to continue that fight.

Waters said she was pleased that the judge agreed with the Democrats’ argument in that case, but that process would be lengthy and does not absolve Congress from its responsibility to act.

Politically, Democrats remain in the same bind. Pelosi’s stated threshold for “overwhelming and bipartisan” support to move forward with impeachment hasn’t budged. While most Democrats want impeachment hearings to begin, the idea is still unpopular overall, according to the latest NPR/PBS NewsHour/Marist Poll.

“What about just doing the right thing?” Moulton said, when asked about the political calculus for Democrats.

That question is causing anxiety among some members ahead of the coming Memorial Day break. Some worry they will face angry constituents who want proof that Democrats are holding Trump accountable while still delivering on promises to create jobs and improve health care.

The tension has created a political headache for people like Cicilline, the head of the Democrats’ messaging team.

“I think delivering on those promises to improve the economic lives of the American people is our first priority,” Cicilline said. “I think Democrats are also united that we need to hold this administration accountable and that we need to demonstrate that no one in this country, including the president, is above the law. While there might be some different ideas about what’s the best vehicle to do that, we are united on those principles.”

https://www.npr.org/2019/05/21/725356771/democrats-impeachment-divide-tests-pelosi

 

 

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