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 communism from capitalism, and is one of the fundamental defining characteristics of communism.[1]
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.[2] Alternative conceptions of socialism that do not use the profit system such as the Lange model, use instead a price system and monetary calculation.[3]
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[clarification needed] 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.
^"Socialism and Capitalism: Are They Qualitatively Different Socioeconomic Systems?", by Kotz, David M. Retrieved February 19, 2011, from University of Massachusetts: http://people.umass.edu/dmkotz/Soc_and_Cap_Diff_Syst_06_12.pdf: "This understanding of socialism was held not just by revolutionary Marxist socialists but also by evolutionary socialists, Christian socialists, and even anarchists. At that time, there was also wide agreement about the basic institutions of the future socialist system: public ownership instead of private ownership of the means of production, economic planning instead of market forces, production for use instead of for profit."
^Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Neoliberalism. Stanford University Press. p. 20. ISBN 978-0-8047-7566-3. According to nineteenth-century socialist views, socialism would function without capitalist economic categories - such as money, prices, interest, profits and rent - and thus would function according to laws other than those described by current economic science. While some socialists recognized the need for money and prices at least during the transition from capitalism to socialism, socialists more commonly believed that the socialist economy would soon administratively mobilize the economy in physical units without the use of prices or money.
^Loeb, Harold (2010). Production for Use. Nabu Press.
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