Socialism is an economic theory or idea that states that the government or

the state should be in charge of economic planning, production and

distribution of goods. This contrasts with capitalism where free markets
predonimate and property is privately owned. Socielism tends to favor
cooperation whereas capitalism is characterized by competition.

A Socialist economy is basically an economy that is followed in China as well

as Vietnam.

This economy is characterized as industries owned by state entities.

However, the government does not routinely intervene in the setting price. It
combines substantial state ownership of large industries within the private
sector. It supplements the centrally planned economy

Socialism is an economic and political theory based on public or common

ownership and cooperative management of the means of production and
allocation of resources.[1][2][3]

In a socialist economic system, production is carried out by a public

association of producers to directly produce use-values (instead of exchange-
values), through coordinated planning of investment decisions, distribution of
surplus, and the use of the means of production. Socialism is a set of social
and economic arrangements based on a post-monetary system of calculation,
such as labour time, energy units or calculation-in-kind; at least for the
factors of production.[4]

Socialism is a political and economic system in which most forms of

economically valuable property and resources are owned or controlled by the
public or the state. The term socialism also refers to any political or
philosophical doctrine that advocates such a system. In a strictly socialist
economy, public agencies influence-and in some cases actually decide-what
kinds of goods and services are produced, how much they cost, the wages or
salaries paid to people in different professions, and how much wealth a single
individual may accumulate.

Most socialist systems also provide citizens with significant social benefits,
including guaranteed employment or unemployment insurance and free or
heavily subsidized health care, child care, and education. Socialism is the
major alternative to capitalism, a system in which most property is privately
owned (by individuals or businesses) and the production of goods and
services, as well as the distribution of income and wealth, are largely
determined by the operation of free markets.
Socialism—defined as a centrally planned economy in which the government
controls all means of production—was the tragic failure of the twentieth
century. Born of a commitment to remedy the economic and moral defects of
capitalism, it has far surpassed capitalism in both economic malfunction and
moral cruelty. Yet the idea and the ideal of socialism linger on. Whether
socialism in some form will eventually return as a major organizing force in
human affairs is unknown, but no one can accurately appraise its prospects
who has not taken into account the dramatic story of its rise and fall

Socialist economics is a term which refers in its descriptive sense to the

economic effects of nations with large state sectors where the government
directs the kind and nature of production. In a normative sense, it applies to
economic theories which advance the idea that socialism is both the most
equitable and most socially serviceable form of economic arrangement for
the realization of human potentialities.

There has developed a diverse array of ideas that have been referred to as
"socialist economics," from forms of "market socialism," which advocate
achieving economic justice through taxation and redistribution through state
welfare programs to the hardcore communists who advocate total state
control of all property and the economy, to the unique Chinese variation
known as "socialism with Chinese characteristics."

However, particularly when featuring a planned economy, attempts to put

socialist economics into practice have failed. Many critiques of socialist
economics warned of this. Some noted the impossibility of knowing the
economic data necessary to have total control over an economy, finding it
impossible to replace the "invisible hand" that Adam Smith regarded as
guiding free market economies. Placing production goals above consumer
leads to failure, as does removing all motivation by taking total control over
the economic system. Critics of socialist economics argue that human beings
are beings of free will and their success in any endeavor comes from their
free pursuit of desires and the fulfillment of their individual potentials. No
centralized system run by a distant government, even if well-meaning, can
take into account the diversity of needs and contributions of all people; it is
this diversity that makes human society human. Prosperity and happiness for
all can only, critics maintain, come when each individual is regarded as a
unique and valuable member of society. Socialist economics, despite aiming
to care for all people and provide fair distribution of wealth, lacks sufficient
understanding of human nature to establish a society that can succeed in
doing so.
Socialist economics is a broad, and mostly controversial, term. Generally,
however, most theoretical economists would agree that the definition of a
socialist economy is based on four main features:

1. “Public ownership” of the decisive means of production

2. centralized control of the rate of accumulation

3. The existence of a market for consumer goods and for labor (a wages
system)

4. Managed pricing (Nove and Nuti 1972)

Altogether, socialist economics, as these four features suggest, is

characterized by large scale central planning of all possible types and
quantities of consumer goods and machinery for their production (with a
price system attached) and their quantitative regional allocation. Socialist
economics also plans the qualitative and regional distribution of labor and the
appropriate wage system. To be competitive with Western free market
systems, it has to plan for technical and technological innovation and quality
of products that are to be in demand.

Also, the four principles clearly define a necessary political condition for a
socialist economics to become a workable reality in any society’s history: A
non-democratic authoritarian or totalitarian regime of one party that can
change the constitution to legally anchor all the above elements. Without
such authority, centralized control by government of the economy cannot be
achieved

ocialism was a term invented (stolen) in 1905 at half three in the morning by
the punk rocker Karl Marx from homosexual French and British intellectuals
of the likes of Henri de Sain Simon. The original socialist position was that
man should apply rational planning to the economic aspect of society, on
behalf of the state, for the benefit of everyone/society/the nation/insert any
group here. Marx later bastardized the term to mean that a dictator of the
proletarian peoples should rule, which means that the most uneducated and
worthless class (the slave workers) should control the economy through the
workers state (or the dictator of the proletarians, who knows better than the
others). Marx was apparently seen downloading vodka porn with several
notable drinking buddies, including Vladimir Nabokov, who was looking to
pick up "biatches n hoes" as the official Socialist history states. (This event is
memorialised in the Marx's introduction to 'The Communist Manifesto', which
stated, 'Even in the dead of Russian winter, the young totty goes out in short
skirts and little dresses. You've got to love it.') By 10p.m., the bar had been
drunk dry. Enraged, Marx smashed an empty bottle on the table and used it
to threaten the barman, asking, 'O, callous defender of the liquor, lined-face
keeper of the drop, where art our divine liquid?' Marx always talked a bit like
that when he was wasted, so it's easy to see which bits of the Manifesto were
written under the influence. Because of this fact, some say socialism is evil
because it gave birth to communism (as well as social democracy, the social
market, welfare, economic planning, nazism, gulags, technocracy, more
human rights, communist parties, workers and consumer rights and
economic liberty).

In the Western World socialism is promoted by intellectuals, scientists and

wannabe hippies who believe that they (the intellectuals) are smarter and
thus should control the state, which should direct economic activity in a
rational manner. The opposite of socialism is capitalism, which is promoted
by businesspeople, corporations, spoiled brats and libertarian nutjobs who
believe they are the most capable to run and direct society on behalf of the
capitalist market, because the freedom for corporations to do as they please
and the quest for profit will result in the most rational society.

There is great debate amongst socialists as to what the hell their system is,
which version is right and who the real socialists are. The revolutionaries
want to lynch all the capitalists, for example. The evolutionary/reformist
socialists want society to evolve from capitalism to socialism. The democratic
socialists want to do it through party politics. The Marxists want the
uneducated masses of slave workers to rise up and establish the dictator of
the proletarians. The libertarian socialists like Noam Chomsky hate the state
and the capitalists, while socialists just hate the capitalist businesses and
capitalists just hate the state/socialists. The modern Chinese believe that
capitalism is the best form of socialism with Chinese characteristics. Oh, and
the National Socialists believe the road to socialism is to kill all the Jews,
while the Jews themselves believe the kibbutz is the best form of socialism.

(Well to start I would basically like to state the fact that socialism is
communism for great men) A transcription of a famous (though poor for
laughs) memo by Lenin reads: 'Socialism is the only way of securing human
happiness. The guiding principle of socialism is that death, war, famine,
environmental disaster and the possibility of a Ricky Martin comeback are
bad things and products of capitalism, which must be overthrown. An
enlightened person can easily see that this is true beyond a doubt, and that
beards, choirs, the Dictatorship of the Proletariat, police state, folk music and
massive executions are the solution.'

It turned out that this guy, attempting to profit from organisational chaos
caused by losses in the Russo-Japano-Sino-Chino-Wino-Dino war, had
purchased five crates of vodka to sell on at inflated prices. The angry Marx
formulated the communist doctrine on the spot. Marx later refined his theory
into what eventually became Super Socialism.

features of socialist economy

The main means of production - the large factories, mines, forests, big farms,
offices, banks, transport systems, media, communications, big shopping
chains will be taken into owner-ship by the new workers' state. Private
ownership of large enterprises will end. The property of working people, the
middle class and even medium sized capitalists will be left alone.

The economy will be planned to serve human needs rather than simply profit
and luxury consumption by the rich. This will release the productive capacity
of the economy from the limitations of profit maximisation. A great expansion
in useful production and the wealth of society will become useful.

Rational planning will replace anarchy. Coordination and planning of the

broad outlines of production by public agencies will aim at building an
economy that will be stable, benefit the people and steadily advance.
Redirecting the productive capacity to human needs will require a variety of
economic methods and experiments. There could be a combination of central
planning, local coordination, strict price control or use of the market
mechanism to set prices. Various policies might be used with changing
conditions. But no matter what means are chosen, a socialist economy must
uphold the basic principles of social ownership, production for the people's
needs, and the elimination of exploitation.

Factories and other productive facilities will be modernised to eliminate

backbreaking labour and ecological damage. Regional disparities will be
addressed. No longer will Auckland mushroom while the South Island
stagnates. Productivity gains will be used to shorten the working day and
improve living standards, rather than create unemployment. Construction of
housing, schools, medical, cultural and sporting facilities for working people
will be a priority.

With socialism, goods and services will be distributed on the basis of from
each according to their ability, to each according to their work. No longer will
monopolists, landlords and speculators live off the labour of others. Every
person will get the opportunity to contribute to society as much as they are
able. Those who work more will receive more income. Those who retired or
are unable to work would be supported from the social fund, while
encouraging them to contribute what they can to socialist construction.

Transforming the main productive enterprises from private to social

ownership will allow workers to manage democratically their own work places
through workers' councils and elected administrators, in place of the myriad
of supervisors and consultants today. In this way workers will be able to make
their work places safe and efficient places that can serve their own interests
as well as society's. Small owners, like farmers, fishing people and small
retailers will be encouraged to form cooperatives and work together to raise
their standard of living and improve efficiency.

Command Economy: CentralPlanning and strict Bureaucracy is the main

feature of Socialistic Economy. It directs all Political and Social Activities.

Limited Role of Market.

Generally the Market is determined by Demand and Supply and here as the
Government decides the production allocation of resources it is having
minimum role to play.

No private ownership of property or factors of production. The government is

the owner of all properties. Only a little Private property is allowed and no
property rights, hereditary rights.

Central Planning.

The main feature of Socialism is central planning which decides the basic
problems like a) what to produce? B) How to produce? C) For whom to
produce? The Central

Planning committee sets the goals for the economy and also he time frame
within

these goals are to be realized.

Social Security and welfare: In a Socialistic Economy the government decides

all economic decisions and sets the goal of the economic welfare and security
of weaker sections of society and aged people.

merits and demerits of socialist economy

Merits of Socialist Economy
Merits of Socialist Economy

1. Efficient use of resources: The resources are utilized efficiently to

produce socially useful goods without taking the profit margin into
account. Production is increased by avoiding wastes of

competition.

2. Economic Stability: Economy is free from business fluctuations.

Government plans well and everything is well coordinated to avoid

over-production or unemployment. There is stability because the

production and consumption of goods and services are well

regulated.

3. Maximisation of Social Welfare: All citizens work for the welfare

of the State. Everybody receives his or her remuneration. The

State concentrates on the production of basic necessaries instead

of luxury goods. The State provides free education, cheap and

congenial housing, public health amenities and social security for

the people.
4. Absence of Monopoly: The elements of corporation and monopoly

are eliminated since there is absence of private ownership. The

state is a monopoly but produces quality goods at reasonable price.

5. Basic needs are met: In socialist economies, basic human needs

like water, education, health, social security, etc, are provided.

Human development is more in socialist countries.

6. No extreme inequality: As social welfare is the ultimate goal, there

is no concentration of wealth. Extreme inequality is prevented in

socialist system.

Demerits of Socialism

1. Bureaucratic Expansion: A socialist economy is operated under a

centralized command and control system. People here work out

of fear of higher authorities. It does not give any initiative for the

people to work hard.

2. No Freedom: There is no freedom of occupation. Allocation of

factors of production is not done rationally. Jobs are provided by

the State. Place of work is also provided by the State. The

consumer's choice is very limited.

3. Absence of Technology: Work is monotonous and no freedom is

given. Any change in the production process will alter the entire

plan. Hence any innovation cannot be easily enforced. Everything

is rigid and technological changes are limited.

4. Absence of competition makes the system inefficient.