[1] This is in contrast to the method of distribution and compensation in capitalism, an economic and political system in which property owners can receive income by virtue of ownership irrespective of their contribution to the social product.
Vladimir Lenin, inspired by Marx's writing on the subject in his Critique of the Gotha Programme, claimed the principle to be a fundamental element of socialism within Marxist theory.
The term means simply that each worker in a socialist society receives compensation and benefits according to the quantity and value of the labor that they contributed.
[citation needed] Capitalism can lead to a situation where the means of production are owned by a small minority who do not produce, but rather live off the labor of others.
While agreeing that the citizens of a workers' society should be rewarded according to individual contributions, Marx claims that giving them the "full product" of their labor is impossible as some of the proceeds will be needed to maintain infrastructure and so forth.
But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.Marx says that this is rational and necessary, and that once society advances from the early phase of communist society and work becomes life's prime want, distribution will occur differently.
Lenin wrote The State and Revolution to inform the public and to prevent Marxism from becoming tainted by "opportunists" and "reformists", as he called them.
Lenin claims that socialism will not be perfect since, as Marx said, it has emerged from the womb of capitalism and which is in every respect stamped with the birthmarks of the old society.