SOCIALIZATION. – A generic term used to designate the aims and methods characteristic of socialist and communist economic schools, directed toward the practical abolition of private ownership of the means of production and their assignment as collective property of society.
If the assignment occurs in favor of the workers employed in each enterprise, even in individual cases, there is socialization in the strict sense, which then approaches cooperativism. If, instead, it is in favor of the State, as representative of all workers, there is statization, applied in state monopolies and, in Italy, in the railways. In cases of partial statization, consisting of state participation in the capital, management, or operation of enterprises, or other substantial interference, or concerning certain public services or individual industries or branches of industry, carried out by nations not committed to a program of full socialization or statization, the term nationalization is more commonly used. Closely related to these are municipalizations, whereby municipalities become owners of enterprises providing essential public services (water, gas, electricity, transport, etc.). However, these terms are often confused in practical, especially journalistic, usage.
Socialization of an enterprise may also occur through the voluntary decision of a capitalist-entrepreneur, whereby ownership passes, in whole or in part, through sale, agreement, or donation, to the workforce of the enterprise itself. The first and most notable example was that of the Zeiss firm in Jena, in the optical lens and instrument industry, which in 1889, by the free disposition of Prof. Ernst Abbe, heir of the founder Carl Zeiss, was transferred, through the Zeiss Foundation, to the staff of the enterprise and to the city of Jena.
When socialization is imposed by a political regime and pushed to its extreme degree of realization, it inevitably falls within a planned economy (v. PLANNING): its purpose is then not to recognize property, profits, and freedom of initiative for the majority of workers, but rather to oblige them, under the guise of ownership, to follow a production program predetermined and controlled by central power for its own ends. If these ends were exclusively economic and if workers were actually left with the full profits, the system might at least present the advantages stemming from economic centralization; however, these would always be counterbalanced by the disadvantages of bureaucratization of economic functions and the disappearance of initiative and competition, as well as other drawbacks inherent in a planned system.
Recently (Canada, Germany), there has been talk of a syndicalization of agricultural and industrial enterprises; under this system, industries in each sector would be managed by the workers' syndicates of that sector, or workers' representatives would occupy seats on boards of directors, opening up a new career path of a bourgeois-capitalist type for them.
In July 1952, the Bonn Parliament debated a bill along these lines; although it approved workers' representation on the boards of directors of their enterprises in a ratio varying between 30 and 50 percent, and only in large enterprises, it resolutely excluded representatives of trade union organizations.
Apart from spontaneous socialization initiatives, which, though few in number, have yielded concrete positive results, the first evolutionary step toward socialization may be considered the factory councils and internal commissions, which for now have essentially technical-union and advisory value, as well as the concept—with a few rare and unsuccessful applications, mostly in industries of the I.R.I. (Istituto per la Ricostruzione Industriale)—of management councils. The experience in Italy and abroad (excluding Russia) has, however, so far been unsatisfactory: attempts of this kind, as well as the admission of workers or trade union representatives onto the boards of directors of industrial companies, cannot succeed if undertaken in climates of heated class struggle and rife with childish illusions.
Regarding the productivity of socialized enterprises, it has generally increased in all cases of spontaneous socialization; in all other cases, it has either not increased or has even significantly decreased, except where socialization was implemented in an atmosphere and in forms of convinced collaboration between entrepreneurs and workers, as in the Netherlands.
Closely related to socialization is workers' shareholding, rejected by communists who see it as an incentive to the embourgeoisement of workers: through this system, workers gradually become participants in the profits and control of the enterprise to which they contribute their labor.