What is Socialism?

Socialism is like living on a commune…

In a commune, the members each contribute to the common good of the group. Everyone provides their labor and shares in the benefits of other members’ efforts. There is no individual ownership of the land or the goods it produces. Everyone takes what they need and ensures that everyone else has their needs met. By caring about everyone else, rather than just themselves, nobody is left behind, and nobody accumulates more than they need. In theory, socialism would work like this on a national level; in practice, economic production has never been maintained in this way on a large scale, and political freedoms usually suffer.

Socialism is a theoretical economic system in which nobody owns the means of production. Instead, everybody in the socialist population has access to land, equipment, and business interests jointly owned by everyone. The idea is built upon the assumption that people are inherently cooperative. In theory, each person views themselves as partly responsible for the success of everyone else. Therefore, they voluntarily contribute their time, labor, and energy trying to make everyone else better off. With everyone taking care of everyone else, no individual needs to worry about themselves.

The primary component of a socialist system is collective ownership. In a socialist system, nobody owns the land, natural resources, or business interests within the country. Instead, the entire population theoretically benefits from any wealth that is created. In most cases, the government would coordinate the activities of the people, which implies a centrally planned command economy.

A socialist system strives for a classless society, in which the people have similar financial situations. A basic standard of living is usually guaranteed through the government. That might mean that the government provides health care, education, national defense, housing, food, and any other basic needs. To do so, the population forfeits much of their income, receiving these benefits instead.

However, citizens of a socialist society can earn wages and can own personal effects. It is the means of production that are jointly owned, not the private property of the people. Therefore, the government might use pricing mechanisms to encourage workers to do less desirable tasks. People may also receive more compensation for volunteering to do more work. Thus, a socialist system does not ensure equality of outcomes but strives to increase the equality of opportunity.

Because of the common ownership of business interests, profits are shared among the population (usually through government benefits). However, this implies that there is very little competition within the economy. That lack of competition, and the void of entrepreneurship, can result in little product choice for consumers.

There are various forms of socialism. Each shares the basic concept of collective ownership. However, the term socialism has been applied to a broad range of socioeconomic systems throughout history — most purely theoretical, some historical. Here is an overview of some of the systems that might be described as socialist.

Democratic socialists seek to remove power from corporations, transferring it to the democratic system (i.e., the government). In theory, this could happen through high tax rates, favorable labor relations, and strong regulations governing the way businesses operate.

Revolutionary socialism aims to overthrow the capitalist system. Revolutionary socialism is not necessarily a call to arms, but it often resembles Marxism. It views the existence of capitalism as being in the way of achieving socialist ideals. Therefore, this line of thought seeks to break what it considers the capitalist stranglehold of society and replace the market economy with public ownership and central planning.

Also known as anarcho-socialism, subscribers to the libertarian socialism concept reject big government and big business. Unlike other socialists, libertarian socialists do not wish for the government to take care of everyone. Instead, they would like employees to become the owners of the corporations. Through distributed ownership, each member of society would have the means to care for themselves without the ills of the government directing people’s lives.

Market socialists don’t disparage the free-market economy. However, like all varieties of socialism, they do seek common ownership of the means of production. Market socialists view the employer as someone exploiting the employee — stealing part of the value they create. Market socialism would require the distribution of profits to the workers that create them rather than shareholders and corporate executives. However, this form of socialism does not call for a centrally planned economy. Free enterprise would still determine the flow of goods and services.

Also known as eco-socialism, the green socialist agenda is to reduce pollution by restricting economic activity. They view the greatest failure of capitalism as the continual march toward ever-increasing consumption. The green socialists see the world as collectively owned, and the destruction of the environment as something for which we all pay. Therefore, they seek to protect the collective interest by restricting individual motivations. Doing so would require shutting down the production of nonessential products and focusing efforts on meeting only everyone’s basic needs.

In many religions, the ideas of socialism align with the instructions to the devout. The Christian adage “love thy neighbor” is a typical example, although other religions share the sentiment. Religious socialist are those who come to promote the characteristics of socialism through their spiritual pursuits. For many, that stems from the idea that they are responsible for the well being of others.

Karl Marx introduced the term utopian socialist as a pejorative term to describe some philosophers of his time. While Marx actively sought a revolution to overthrow the capitalist system, others simply described their notion of how a perfect society would look. Marx dismissed these ideas as fanciful dreams with no realistic path to accomplishing them. Utopian socialist are those who seek an ideal (but unattainable) society free of prejudice, classism, poverty, and inequality.

Some people call for socialism on the grounds of morality. They point to injustice, inequality, and poverty as unethical outcomes. Therefore, ethical socialist are those who seek a system that alleviates those consequences of capitalism.

Throughout human history, there are examples of the haves and the have-nots. The ideas we now call socialism generally seek to reduce the divide between these classes. As such, the intellectual seeds that grew into modern socialism were planted thousands of years ago. In ancient Greece, Plato talked about some of the views now expressed as socialism in his famous work, Republic (360 B.C.).

But it was not until the Industrial Revolution that the ideals of modern socialism took root. In the first half of the 19th century, aristocrats imagined bringing the ideas of Utopia (a socio-political satire by Thomas More, written in 1516) into reality. For example, Robert Owen (a wealthy Scotsman) established a colony called New Harmony, which would function on socialist ideas. That effort failed within a few years, consuming his riches with its collapse.

Another attempt was put forward by François-Marie-Charles Fourier (a wealthy Frenchman), in which about 1,600 members would live in a self-sustaining “phalanstery.” About 50 of these communities were established in America, but the average duration before failing was just two years.

Karl Marx called these ideas, and others, “Utopian” Socialist, meant as a slight toward their creators. In contrast, Marx believed his approach was grounded in science rather than fiction. Instead of trying to build idealist communities, Marxists called for an upheaval of the system in which the bourgeois (the owner class of wealthy elites) exploited the labor of the proletariat (the working class, serfs, peasants, and slaves) to enrich themselves. Marx, along with Friedrich Engels, wrote the Communist Manifesto in 1848 as a call to action for the exploited workers to seize control of the means of production.

Pros

• In theory, with increased equality, nobody is exploited, and no one is left to fend for themselves.
• Every person theoretically shares in the wealth of society, which ensures their basic needs are met.
• With their basic needs met, people could work for pleasure rather than acting as a cog in a machine.
• Theoretically, through state control, the economy wouldn’t create useless goods and wouldn’t go through business cycles (periods of growth and decline).

Cons

• As workers receive no benefit from improving processes or products, there is no incentive to work hard.
• Because everyone has their basic needs met, economic theory suggests that some people might not do any work (called a free rider problem).
• A government-run business tends not to perform at the same level of productivity as a private enterprise.
• Power corrupts the political process, resulting in a new type of classism.
• The lack of private ownership implies that a person is not entitled to the wealth they create. Taking from the person doing the work, and distributing it to people that don’t, could be viewed as unjust.

The major difference between capitalism and other economic systems is the ownership of the means of production. In a capitalist system, individuals own land, equipment, and business interests. In other models, those things are owned by the population collectively.

There are more subtle differences between socialism, communism, and fascism. All three manage the ownership of the means of production, and therefore control economic output. But, there are varying reasons and methods of control. In a socialist economy, people may choose what work to pursue and how much to contribute. They may receive different compensation as a result. In communism, that is not the case. Everyone is expected to contribute fully, but is only entitled to what they need. In a fascist system, it may be more oppressive. The goal of economic output under fascism is to grow the strength of the nation.

According to the World Atlas, these countries are considered socialist:

• Angola
• Bangladesh
• Barbados
• Bolivia
• China
• Cuba
• Ecuador
• El Salvador
• Ethiopia
• Greece
• Guinea-Bissau
• Guyana
• Laos
• Mauritius
• Mozambique
• Namibia
• Nepal
• Nicaragua
• North Korea
• Portugal
• Republic of the Congo
• Saint Vincent and the Grenadines
• Sri Lanka
• Suriname
• Tanzania
• Uruguay
• Venezuela
• Vietnam
• Zambia

Source: World Atlas