What is Socialism?
Posted in Business Environment |
Email This Post
Socialism is a type of economic system in which the state totally owns or controls the resources and means of production. The basic stress is on the use of these resources for the overall welfare of all members of the society.
The socialistic system followed in Communist countries is characterized by state capitalism but in the democratic socialistic nations a dominant private sector is also present. Under the socialistic system the workers in sectors like industry, agriculture and transport become the joint owners of the means and results of production. As the non-human resources of production are mainly owned by the state or the society it ensures better allocation and utilization of these resources, elimination of unemployment and class struggle. It also reduces the inequality in income. On the other hand socialism can increase Red-tapism, corruption and Bureaucratization.
This summary is wrong. Socialism does not necessarily involve state ownership of production. Ownership of production by workers is the hallmark of socialism. It presently exists in numerous non-Communist societies, including Italy, France, the U.K., and even in the USA (see, e.g., worker cooperatives in the plywood industry).