SOCIALIZATION. — A general term designating the aims and method proper to the socialist and communist economic schools, directed toward the practical abolition of private ownership of the means of production and their attribution as the collective patrimony of society.
If the attribution takes place in favor of the workers employed by each enterprise, even in individual cases, this constitutes socialization in the narrower sense, which then approaches cooperativism. If, instead, it is in favor of the State, as representative of all workers, it constitutes state ownership or nationalization by the State, applied in state monopolies and, in Italy, to the railways. In the case of partial state ownership, consisting in State participation in the capital, direction, or management of enterprises, or in some other substantial interference, or concerning particular public services or individual industries or branches of industry, carried out by nations that are not committed to a program of socialization or complete state ownership, the term more commonly used is nationalization. Related to these are municipalizations, whereby municipalities become owners of enterprises providing public services of primary importance (water, gas, electricity, transport, etc.). In practical usage, however, the above terms are often confused, especially in journalism.
The socialization of an enterprise may also take place through the voluntary decision of an entrepreneur-capitalist, when ownership passes wholly or partly, by sale, agreement, or gift, to the body of workers employed by the enterprise itself. The first significant example was that of the Zeiss firm of Jena, in the lens and optical-instrument industry, which in 1880, by the free disposition of Prof. Ernesto Abbe, heir of the founder Carlo Zeiss, was transferred, through a Zeiss Foundation, to the company’s personnel and to the city of Jena.
When socialization is imposed by a political regime and driven to its extreme degree of realization, it is inevitably incorporated into a planned economy (v. SANTIFICAZIONE): and its purpose is not then to recognize ownership, profits, and freedom of initiative for the masses of workers, but rather to compel them, under the appearance of being owners, to follow a predetermined production program controlled by the central power for its own ends. If these ends were exclusively economic, and if the workers were in fact left the totality of the profits, the system might at least offer the advantages resulting from the centralization of the economy; these, however, would always be counterbalanced by the disadvantages of the bureaucratization of economic functions and the disappearance of initiative and competition, in addition to the other disadvantages associated with the planning system.
Recently (in Canada and Germany) there has been discussion of the syndicalization of agricultural and industrial enterprises; under it, the industries of each category would be managed by the worker unions of that same category: that is, the positions assigned to workers on boards of directors would be occupied by union representatives, thereby opening to them a new career of a bourgeois-capitalist type.
In July 1952 the Bonn Parliament discussed a bill to this effect: but, although it approved the representation of workers on the boards of directors of their own enterprise in a proportion varying between 30 and 50 percent, and only in large enterprises, it decisively excluded representatives of trade-union organizations.
Toward forms of spontaneous socialization, cooperation (v.), the wage system (v.) is evolving in correlation with social progress and with the expansion and democratization of capital: as a result, capitalism will progressively lose its present predominance, due mainly to its scarcity, its concentration in a few hands, and the deficient social morality of capitalists in general. The method and gradualness of the transition precisely distinguish the various economic-social schools, and more particularly the socialist schools, from one another and from communism. The former realize that certain limits must not be exceeded and that harmful economic upheavals should not be provoked, but that time should be allowed for suitable attitudes and abilities to develop among the workers; communism, on the other hand, maintains that the capitalist classes will yield only to violence, and that consequently every alteration in the structure of enterprises requires those acts of force which, according to Marxist ideology, represent an unavoidable necessity or even a scientific law.
The facts disprove this necessity: and inconsiderate and systematic violence is perhaps today the primary cause both of the hesitation and delays on the part of entrepreneurs in making the auspicious decision, and of the scant concern among the working masses regarding their own moral and specific preparation for the new tasks.
In practice, and outside the rigid tracks of socialism and communism, rather than socialization one speaks more flexibly of structural reforms of the enterprise: a term that leaves open the search for forms and degrees better suited to the innumerable variety of enterprises. Indeed, it is neither possible nor, in any event, advisable to introduce a reform of the present structure of the enterprise that would be identical for all enterprises, large and small, old and recent. Any legislation in this field could have practical value only after lengthy experimentation with various forms of collaboration arising from the initiative of entrepreneurs.
Apart from spontaneous implementations, still few in number but concrete in their positive results, a first evolutionary step toward socialization may be seen in works councils and internal commissions, whose value is for the moment essentially technical-union and consultative; as well as in the project, with some rare and generally unsuccessful applications mostly in I.R.I. industries (Istituto Ricostruzione Industriale), concerning management councils. The experiment conducted in Italy and abroad (in Russia they are excluded) has not, however, so far been satisfactory: attempts of this kind, as well as the admission of worker elements or union representatives to the boards of directors of industrial companies, cannot achieve genuine success if undertaken in heated climates of struggle and dense with childish illusions.
As regards the productivity of socialized enterprises, it generally increased in all cases of spontaneous socialization; it did not increase, or sometimes decreased substantially, in all other cases, except where socialization could be implemented in an atmosphere and under forms of convinced collaboration between entrepreneurs and workers, as in Holland.
Related to socialization is worker shareholding, rejected by communists, who see in it an incentive toward the embourgeoisement of workers: through it, the worker is gradually made a participant in the profits and control of the enterprise to which he contributes his labor.