Editing Socialism (section)

=== Criticism of capitalism ===
{{main|Anti-capitalism|Criticism of capitalism}}
Socialists argue that the accumulation of capital generates waste through [[Externality |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 such as high-pressure advertisement to be sold at a profit, thereby creating rather than satisfying economic demand.<ref name="Use not profit">{{cite web |url=http://www.worldsocialism.org/spgb/may10/page23.html |title=Let's produce for use, not profit |publisher=[[Socialist Party of Great Britain]] |date=May 2010 |access-date=18 August 2015 |archive-url=https://web.archive.org/web/20100716140329/http://www.worldsocialism.org/spgb/may10/page23.html |archive-date=16 July 2010}}</ref><ref>{{cite magazine |last1=Magdoff |first1=Fred |last2=Yates |first2=Michael D. |url=http://www.monthlyreview.org/091109magdoff-yates.php |title=What Needs To Be Done: A Socialist View |magazine=Monthly Review |access-date=23 February 2014 |date=November 2009}}</ref> 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-value]]s).<ref name="Use not profit"/> 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 [[Financialization|financial industry]], contributing to the formation of economic bubbles.<ref>{{cite web |first=Richard D. |last=Wolff |author-link=Richard D. Wolff |url=http://www.rdwolff.com/content/economic-crisis-socialist-perspective |title=Economic Crisis from a Socialist Perspective &#124; Professor Richard D. Wolff |publisher=Rdwolff.com |date=29 June 2009 |access-date=23 February 2014 |archive-url=https://web.archive.org/web/20140228090631/http://www.rdwolff.com/content/economic-crisis-socialist-perspective |archive-date=28 February 2014}}</ref> Such accumulation and reinvestment, when it demands a constant rate of profit, causes problems if the earnings in the rest of society do not increase in proportion.<ref>{{Cite journal|url=https://search.informit.org/doi/10.3316/informit.818838886883514|journal=Australian Socialist|title=What is capitalism|first=Chris|last=Warren|issn=1327-7723 |date=December 2022 |volume=28 |issue=2/3}}</ref>

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 revenue''—''but based on cooperative work and internal planning in allocation of inputs—until the role of the capitalist becomes redundant.<ref>{{cite book |last=Engels |first=Friedrich |author-link=Friedrich Engels |url=http://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm |title=Socialism: Utopian and Scientific |access-date=30 October 2010 |via=[[Marxists Internet Archive]] |quote=The bourgeoisie demonstrated to be a superfluous class. All its social functions are now performed by salaried employees.}}</ref> 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 (communism and anarchism)|free association]] of individuals based on public or [[common ownership]] of these socialised assets.{{sfnp|Horvat|1982|loc=1: Capitalism, The General Pattern of Capitalist Development|pp=15–20}}<ref name="Engels Selected Works 1968, p. 40">{{cite book |title=Marx and Engels Selected Works |first=Lawrence |last=Wishart |date=1968 |pages=40 |quote=Capitalist property relations put a "fetter" on the productive forces}}</ref> 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]].{{sfnp|Horvat|1982|p=197}}

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.{{sfnp|Horvat|1982|pp=197–198}} These corrective policies limit the incentive system of the market by providing things such as [[minimum wage]]s, [[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.{{sfnp|Schweickart|Lawler|Ticktin|Ollman|1998|pp=60–61}} 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 (philosophy)|power]] and wealth within a small segment of society.<ref>{{cite encyclopedia |chapter-url=http://www.britannica.com/EBchecked/topic/551569/socialism |chapter=Socialism |encyclopedia=Britannica |date=2009 |access-date=14 October 2009 |quote=Socialists complain that capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of the relative few who emerge victorious from free-market competition—people who then use their wealth and power to reinforce their dominance in society.|title=Socialism &#124; Definition, History, Types, Examples, & Facts &#124; Britannica}}</ref> In addition, they complained that capitalism does not use available technology and resources to their maximum potential in the interests of the public.<ref name="Engels Selected Works 1968, p. 40"/>