Production for use is a phrase referring to the principle of economic organization and production taken as a defining criterion for a socialist economy. It is held in contrast to production for profit. This criterion is used to distinguish socialism from capitalism, and is one of the fundamental defining characteristics of socialism, though it isn't a characteristic of more contemporary proposals for profit-oriented market socialism. This principle is broad and can refer to an array of different configurations that vary based on the underlying theory of economics employed. In its classic definition, production for use implied an economic system whereby the law of value and law of accumulation no longer directed economic activity, whereby a direct measure of utility and value is used in place of the abstractions of the price system, money, and capital. Alternative conceptions of socialism that do not use the profit system such as the Lange model, use instead a price system and monetary calculation. The main socialist critique of the capitalist profit is that the accumulation of capital ("making money") becomes increasingly detached from the process of producing economic value, leading to waste, inefficiency, and social problems. Essentially, it is a distortion of proper accounting, based on the assertion of the law of value instead of the "real" costs of production, objectively determined outside of social relations.
Exposition Production for use refers to an arrangement whereby the production of goods and services is carried out ex ante (directly) for their utility (also called "use-value"). The implication is that the value of economic output would be based on use-value or a direct measure of utility as opposed to exchange-value; because economic activity would be undertaken to directly satisfy economic demands and human needs, the productive apparatus would directly serve individual and social needs. This is contrasted with production for exchange of the produced good or service in order to profit, where production is subjected to the perpetual accumulation of capital, a condition where production is only undertaken if it generates profit, implying an ex post or indirect means of satisfying economic demand. The profits system is oriented toward generating a profit to be reinvested into the economy (and the constant continuation of this process), the result being that society is structured around the need for a perpetual accumulation of capital. In contrast, production for use means that the accumulation of capital is not a compulsory driving force in the economy, and by extension, the core process which society and culture revolves around. Production for profit, in contrast, is the dominant mode of production in the modern world system, equivocates "profitability" and "productivity" and presumes that the former always equates to the latter. Some thinkers, including the Austrian philosopher and political economist Otto Neurath, have used the phrase "socialization" to refer to the same concept of "production for use". In Neurath's phraseology, "total socialization" involves calculation in kind in place of financial calculation and a system of planning in place of market-based allocation of economic goods. Alternative conceptions exist in the form of market socialism.
Usage Karl Marx referred to the "production of use-values" as a feature of any economic mode of production, but characterized capitalism as a mode of production that subjugated the production of use-value for the self-expansion of capital (i.e., capital accumulation or production for profit). In contrast, socialism was vaguely defined as a system based on the direct production of use-value free of the process of continuous capital accumulation. In a "future society, in which class antagonism will have ceased" (communism) "use will no longer be determined by the minimum time of production; but the time of production devoted to different articles will be determined by the degree of their social utility." Friedrich Engels wrote in Anti-Dühring that in the socialist mode of production the law of value will no longer apply and money will no longer be the measure of the exchange value of commodities. It would still be necessary an economic planning, which will ultimately be determined by the "useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production" without the need for the concept of "value." Eugene V. Debs popularly used the phrase when running for president of the United States in 1912, stating that capitalism is founded upon production for profit, and in contrast, socialism is postulated upon production for use. Norman Thomas, a presidential candidate in the United States for the Socialist Party of America in the six elections from 1928 to 1948, contrasted socialism with capitalism by stating that socialism is based on production for use and an end to the profit system. Upton Sinclair devised an elaborate production-for-use plan, including confiscation and repurposing of idle factories and farms, that was central to his unsuccessful End Poverty in California (EPIC) campaign for governor in 1934. Friedrich Hayek defined socialism as "the common ownership of the means of production and their 'employment for use, not for profit'", associating the rise of the welfare state by social democrats in post-World War II Europe as a rejection of socialism in the technical sense.
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