Socialization is a process that begins to take place in capitalism as large-scale manufacturing based on a vertical
division of labor displaces "cottage industry" - the small-scale production shops, guilds and family-run businesses that existed in
feudal economies. This process transforms the act of production into an increasingly social and collective process involving planning and greater coordination among producers, but appropriation of the social product in the form of private profit continues to be a private affair by investors and owners of the enterprise. Furthermore, exchange of the commodities produced is the private act of a small group of capitalists or an individual owner. As the process of socialization expands, a contradiction between the socialized nature of production and the individual nature of appropriation of the surplus product arises, coinciding with the obsolescence of the functions performed by the capitalists (the private owners). The socialization and centralization of industry and capital under capitalism lays the foundations for a socialist economy. Socialism entails ownership of the socialized means of production by the workers engaged in the production either in the form of
worker ownership or
social ownership by all of society. The establishment of social ownership over the means of production resolves the contradiction between social production and private exchange/appropriation under capitalism. Karl Marx envisioned socialization under socialism as involving an expansion of
self-management on the part of workers over their work processes, in contrast to the rigid hierarchy and bureaucracy that characterizes traditional capitalist enterprises. As workers gain more autonomy, they also gain more collective decision-making power and control over their work processes. Socialization of the ownership of the means of production is different from
nationalization, which can, but usually does not imply the socialization of the workplace. In a capitalist economy, socialization is limited because the socialized enterprise continues to operate in a commodity economy under the capitalist laws of motion. Socialization therefore takes a different form in the
capitalist mode of production than in the
socialist mode of production. == See also ==