ABCs of Socialism, Part 1: What is socialism? What is capitalism?

What is socialism? At the most basic level, the essence of socialism lies in worker sovereignty, the idea that those who do the work should also make the decisions. We cannot be free so long as we hold no real power in the workplace. What does worker sovereignty mean in practical terms? We can begin to answer this question by first defining just what we mean by a worker. It might seem obvious- a worker is someone who…works. However, in socialist thinking, we must be more specific. In socialist terms, a worker is someone who must support themselves by selling their labor, their time and energy, to someone else. When you work at a job for someone else, you are selling your labor. The workers in society make up a group with common economic interests, a class- the working class. Who do we sell our labor to? The purchasers of labor in society comprise a class that supports itself by owning property: stores, factories, mills, apartments, etc. Another name for this property is capital. The owning class gets its name, capitalist, from its ownership of capital. Capitalists obtain their wealth by buying labor, then selling the product of that labor at a profit. Let’s look at an example. Think of your phone: it was made by a factory laborer (worker); it was designed by an engineer (worker); it was shipped by a trucker (worker); it was stocked and sold by a salesperson (worker). At each step, a worker contributes his or her labor to the process of production. Yet, the final price of the phone is greater than the labor cost to produce it (material costs are also labor costs- extracting and processing raw materials also involves labor). Where does this ‘extra’ portion of the sale price go? To the capitalist, who contributes nothing to the process of making and selling your phone, and furthermore, has a great incentive to pay the lowest possible price for labor and thereby maximize profits. 

In other words, this:

Depends on this:

And this:

That’s why socialists also have another name for profit, surplus value, meaning the unearned value extracted by a capitalist from workers’ labor. It is this fact, not some nebulous sense of ‘unfairness’ or ‘social justice’ that leads socialists to rightly call the system of surplus value extraction, capitalism, an exploitative system. Only worker sovereignty, socialism, can bring an end to this system of capitalist exploitation. Under socialism, society’s capital, the factories, mills, stores, and so forth, would not be controlled by capitalists, but by workers. A revolutionary new form of management would come about- instead of dictatorial bosses and secretive ‘human resource’ operatives, workplaces would be administered by elected workers’ councils. Firms would be run, not in the interest of a tiny cabal of wealthy investors, but in the interest of those who do the work of creating society’s wealth. Socialism may sound utopian to many readers, but the reality is that there are no other paths to freedom for US workers. Either we can continue as we have done and see ourselves sink lower and lower into the tyranny of the profit system, or we can adopt a new way of thinking that can set us free.