Socialism – Definition, Characteristics, Types, Examples

Definition of Socialism

Socialism is an economic system wherein the resource ownership is with the common public, rather than the private. Socialism emphasizes that the shared public ownership of resources and central planning provide a more equal distribution of goods and services and leads to a more fair society.

Socialism is based on common public ownership of the machinery, tools, factories, and all assets used for production. All investment and production-related decisions are made by a central government body in a purely socialist system.

Differing from the concept of Capitalism, in which the private businesses/individuals owns and control the production (assets & operations) and pay salaries to the people who are working for them, socialism conceptualizes the shared ownership and control among the total public.

Socialism focus on conducting the production for use, rather than selling the produced goods/services for a profit, which ultimately results in equitable distribution of wealth and resources among the common public. There will be no competitive selling in the market, and only free access to goods and services for everyone.

The Socialist viewpoint is that the common public owns the assets and contributes to the production. Hence, the common public is entitled to consume it. Public society has the ownership and control of properties for the benefit of everyone.

Characteristics of Socialism

Following are the characteristics of socialism (socialist) economic system,

  • Good Welfare System

Socialist economic systems generally have good welfare systems and consider social safety as the priority. The common public relies on the state for all day-to-day needs like food, transportation, power, and healthcare.

  • No Society Class Segregation

Since asset distribution of the common public is done at an equal level, there is very less difference between the public base on any classes.

  • Collectivism

The assets collectively owned by the common public. The state/government does the entire economic planning and regulation.

  • Government/State with Power

The government is powerful in a socialist economic system because assets are controlled by the government, which represents the common public ownership.

  • Equality of Outcome

Since the produced assets are owned by the state, these will be distributed to the public in an equal manner. This will result in the same level of minimum quality of life for the common public.

Types of Socialism

Five types of socialism exist around the globe. Socialism diverse into these five types based on how diverse the social democracy is.

Below are the five types of socialism,

1. Market Socialism

The production assets and operations are controlled by ordinary workers in market socialism. The workers have the control to make production decisions like resource sourcing and end product distribution. The workers sell off what is in excess or give it out to members of the society, who then distribute resources based on a free market system.

2. Revolutionary Socialism

Revolutionary socialism emphasizes that a social revolution is necessary to complete structural changes in society. This concept believes that socialism can be implemented only by the overthrow of the existing political and societal structures.

Revolutionaries believe that the pure socialistic system can be implemented only with a significant struggle. The factors of production are owned and run by workers through a well-developed and centralized structure.

3. Democratic Socialism

Democratic socialism is defined as having a socialist economy in which the means of production are collectively owned or managed by an elected administration. This economic system aligns with the principles of both socialism and democracy.

Goods and services such as transportation, power, and housing are distributed through centralized planning.

4. Green Socialism (Eco-socialism)

Green socialism (Eco-socialism) is a concept of socialism with that of green ecology which promotes sustainability. This concept encourages the development and use of public assets in an eco-friendly manner. The production process is focused on ensuring that every member of the community has enough access to basic goods.

5. Libertarian Socialism

Libertarian socialism emphasizes that people are always sensible, self-decision makers, and independent. This concept believes that people naturally turn to a socialistic system if capitalism is foregone because it can meet their needs.

Examples of Socialism

Below are some real world examples of socialism,

1. Israel, India, and the United Kingdom

Israel, India, and the United Kingdom adopted socialism as an economic model following World War II. Socialism seemed to work in these countries for the first two decades. Economy growth of Israel was at an annual rate of more than 10 percent. The average GDP growth rate of India from 1947 into the 1970s was 3.5 percent, placing India among the more prosperous developing nations. United Kingdom GDP growth averaged 3 percent from 1950 to 1965, along with a 40 percent rise in average real wages. All these countries were successful in around two decades of implementation of Socialism.

But the government planners were unable to keep the same phase with global competition and population increase. After decades, economic growth declined and unemployment raised. These three countries then abandoned socialism and turned toward capitalism and the free market.

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2. The Soviet Union From 1922 to 1991

The former Soviet transitioned from a capitalist to a socialist government up to From 1922 to 1991.

3. Sweden Healthcare and Education System

Sweden’s healthcare and education are government funded, which is a part of a socialist policy. This is available for all levels of citizens.

4 Finland

Finland is an example of revisionist socialism and social democracy. Finland has a strong welfare state, democratic regime, and regulated economy for all public in the country.

History of Socialism

The term “socialism” has been applied to very different economic and political systems throughout history. In the late 18th century, the steam engine powered the Industrial Revolution, an economic and social change that first happened to Great Britain, then to the rest of the world. Factory owners became wealthy, while many workers lived in increasing poverty.

As with the above situation, socialism emerged as a response to the expanding capitalist system. It presented an alternative, aimed at improving a lot of the working class and creating a more egalitarian society.

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You may go through the following articles to get comprehensive more information regarding the history of socialism,

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