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Socialism

Socialism is a political and economic system that is based on collective or public ownership of the production means. Unlike capitalism, socialism lays emphasis not on achievement but on equality. It gives value to the workers in accordance with the time they give in to their work rather than the amount of value produced by them. It is characterized by democratic control over all the means of production, and social ownership of the components. It is also called citizen ownership of equity, cooperative ownership or public ownership.

Socialism makes the people of a country dependant on the state or government for everything from health to food. Modern day examples of socialism include China, Cuba and Vietnam. They are modern socialist societies. The socialist governments of the 20th century were overthrown in the USSR, East Germany, and Czechoslovakia.

The Basics of Socialism

Unlike capitalism which is based on private property rights, profit and loss and price systems, socialisms is based essentially on the idea of collective ownership, and bureaucratic central planning. The proponents of socialism are of the view that this economic and political system helps in creating equality among the people, and provides economic security to them unlike capitalism, which works fundamentally to exploit the working class; and work only for a small group of people holding all the resources in their grip, the wealthy class.

The critics of socialism, on the other hand, are of the view that the principles of socialism are basically faulty as they are against human nature. Furthermore, according to them, the idea of socialism also does not include the role of incentives and motivation in the economic transactions carried through this system.

Production under Socialism

The goods produced under socialism are manufactured solely and directly for use, unlike capitalism where goods are produced for profit generation. Since the technical and natural resources are controlled democratically and held in common, the sole purpose of production in socialism is to meet the needs of people. The idea of profit generation from manufacturing the common commodities needed every day was put to an end through socialism.

Ideally, in socialism everyone has free access to the services and goods, which are designed specifically to meet their basic needs. All the work that goes into producing such items will be voluntary. This however, is not implemented fully in any country of the world.


Further Reading


The economic theory of socialism and the labour-managed firm
ideas.repec.org [PDF]
… Suggested Citation. Bruno Jossa & Gaetano Cuomo, 1997. "The Economic Theory of Socialism and the Labour-managed Firm," Books, Edward Elgar Publishing, number 1091 … More about this item. Keywords. Economics and Finance; JEL classification …

Capitalism, Socialism and Post-KeynesianismCapitalism, Socialism and Post-Keynesianism
ideas.repec.org [PDF]
… Suggested Citation. Bruno Jossa & Gaetano Cuomo, 1997. "The Economic Theory of Socialism and the Labour-managed Firm," Books, Edward Elgar Publishing, number 1091 … More about this item. Keywords. Economics and Finance; JEL classification …

Riding over socialism and global capitalism: changing education governance and social policy paradigms in post‐Mao ChinaRiding over socialism and global capitalism: changing education governance and social policy paradigms in post‐Mao China
www.tandfonline.com [PDF]
… Suggested Citation. Bruno Jossa & Gaetano Cuomo, 1997. "The Economic Theory of Socialism and the Labour-managed Firm," Books, Edward Elgar Publishing, number 1091 … More about this item. Keywords. Economics and Finance; JEL classification …

Joseph A. Schumpeter, Joseph A. Schumpeter,
www.tandfonline.com [PDF]
… Suggested Citation. Bruno Jossa & Gaetano Cuomo, 1997. "The Economic Theory of Socialism and the Labour-managed Firm," Books, Edward Elgar Publishing, number 1091 … More about this item. Keywords. Economics and Finance; JEL classification …



Q&A About Socialism


How are goods produced under socialism valued?

Goods are valued according to time given in by workers rather than amount of value produced.

Are all means of production owned collectively in socialist societies?

No, only some means of production are owned collectively.  Some may be privately owned while others may be publicly owned.   The government owns some means of production and private individuals own others.   In addition, there can also be a combination of both state-owned and privately-owned enterprises within the same economy at any one point in time .   For example , China has a mixed economy that combines both state-owned and privately-owned enterprises .   State-owned enterprises account for about 20% of its GDP .   Privately-owned companies make up 80% .    Other examples include Cuba , Vietnam , Laos , North Korea , etc..   However, most socialist economies have been moving towards privatization over the past few decades as they try to improve efficiency by reducing government involvement in the economy .

What is Socialism?

Socialism is a political and economic system based on collective or public ownership of the production means.

What does socialism emphasize?

Socialism emphasizes achievement, not equality.

Are there different types of socialism ?

Yes, there are different types such as market socialism and Marxist communism but they all share common characteristics such as public ownership over major industries; centralized planning; social

Is socialism democratic?

Yes, it is democratic.

Does socialism provide economic security to people like capitalism does ?

No, it doesn't because it works fundamentally differently from capitalism which provides economic security through markets that allow people to exchange their labor for wages or salaries (i.e., through employment).

What does socialism value?

Socialism values equality.

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