In Marxist theory, socialism, also called lower-stage communism or the socialist mode of production, refers to a specific historical phase of economic development and its corresponding set of social relations that supersede capitalism in the schema of historical materialism. Socialism is defined as a mode of production where the sole criterion for production is use-value and therefore the law of value no longer directs economic activity. Production for use is coordinated through conscious economic planning, while distribution of economic output is based on the principle of To each according to his contribution. The social relations of socialism are characterized by the working-class effectively owning the means of production and the means of their livelihood, either through cooperative enterprises or by public ownership and self management, so that the social surplus accrues to the working class and society as a whole.