Socialism Characteristics, Pros, Cons, Examples and Types

Socialism Characteristics, Pros, Cons, Examples and Types In the early to mid-20th century, socialism was all the rage. Several countries adopted socialist ideas in some form or the other. Unfortunately, many countries that experimented with socialism failed â€" Cuba, Cambodia, Chile, Hungary, North Korea, Venezuela, the Soviet Union, and many others â€" leading to the decline of socialism.Surprisingly, socialism is experiencing a resurgence in the 21st century, in part due to the growing economic disparity and due to the influence of socialist politicians like Jeremy Corbyn in the UK and Bernie Sanders in the United States. According to a poll by Gallup, majority of you people today have a positive view towards socialism.Despite the resurgence in the popularity of the socialist ideology, there is a lack of understanding of what exactly socialism is. The term has been misused and overused to the point where it has almost lost its meaning.As more and more people gravitate towards the socialist ideal, let’s take a look at what exactly socia lism is.WHAT IS SOCIALISM Socialism is essentially a political and economic system of social organization where the means of production and distribution are collectively owned by the society, as opposed to capitalism which advocates for private ownership of the means of production.Means of production include things such as factories, land, raw materials, machinery and so on. The collective ownership may be effected through the state or through cooperative unions.One of the most common misconceptions about socialism is that individuals are not allowed to own personal items. While socialism advocates against private ownership of means of production, it doesn’t prohibit the ownership of personal items.Therefore, if the country adopts socialist ideology, you don’t have to worry that the state will take away your television or your book collection. These are personal items.Since the means of production under socialism are owned by society as a whole, the value derived from these mean s of production also belongs to the society collectively. Each person receives their share of the value created by the means of production based on their contribution.Before profits are distributed, a percentage is deducted to cater for common needs such as education, health, transportation, defense and welfare for those who cannot contribute directly to production, such as children and the elderly.WHERE DID SOCIALISM COME FROM?Socialism rose to prominence in the mid-19th century in opposition to the economic inequality brought about by early capitalism. By the turn of the 19th century, the industrial revolution and the resulting industrial capitalism had led to very inhumane working conditions.There were no rights for workers, extremely low wages, extremely long working hours, and zero safety provisions. As the elite class of capitalists grew richer and richer, the working class were wallowing in extreme poverty.Socialism rose as a reaction to the injustices of early capitalism. On e of the first people to advocate for socialism was a Welsh mill owner and idealist known as Robert Owen, who used is wealth to create utopian communities based on socialist ideals. Unfortunately, his socialist experiments ended up in failure and cost him a huge chunk on his wealth. Still, the idea of socialism did not die. Instead, it took root by the mid-19th century, thanks to the rise of trade unions and the writings of a German philosopher named Karl Marx.Karl Marx used systematic analysis to show the shortcomings of capitalism and the exploitation and alienation that resulted from it. According to Marx, workers were the source of wealth, yet, through capitalism, this wealth went to the hands of a few instead of trickling back to the workers.Through his writings, he advocated for a revolution which would see the working class collectively own the means of production. Following Marx’s writings, various countries started experimenting with various versions of socialism.PRINCIPL ES OF SOCIALISMSome of the principles of socialism include:Public OwnershipThis is the core tenet of socialism. In a socialist economy, the means of production and distribution are owned, controlled and regulated by the public, either through the state or through cooperatives.The basic motive is not to use the means of production for profit, but rather for the interest of social welfare.Economic PlanningUnlike in a capitalist economy, a socialist economy is not driven by the laws of supply and demand. Instead, all economic activities â€" production, distribution, exchange and consumption â€" are planned and coordinated by a central planning authority, which is usually the government.A socialist economy relies on the central planning authority for distribution of wealth, instead of relying on market forces.Egalitarian SocietySocialism rose as an opposition to the economic inequality brought about by early capitalism. As such, it aims for an egalitarian society where there are no clas ses. Ideally, all the people within a socialist economy should have economic equality.Provision of Basic NeedsIn a socialist economy, the basic needs â€" food, shelter, clothing, education, health and employment â€" are provided by the government without any discrimination. This is one of the greatest advantages of socialism.Provision of basic needs by the government can, however, result in the masses thinking that they cannot survive without the government, creating a perfect environment for the rise of authoritarian governments.No CompetitionTypically, when you want to buy a car, you are spoilt for choice. There are different brands and different models with varying features and prices.It’s up to you to choose one the best one for you. The same applies for many other products.In a socialist economy, there is no competition in the market since the state is the sole entrepreneur. The state only focuses on provision of necessities, which results in limited consumer choice.Price Con trolYou might be wondering how prices are regulated in an economy without any market competition. In socialist economies, the prices of products are controlled and regulated by the state.The states sets both the market price for consumer goods and the accounting price which helps managers make decisions about productions of goods.Social WelfareAnother major reason behind the rise of socialism was to protect the working class from exploitation. Under socialist systems, there is no exploitation.The state takes care of the working class through employment protection, minimum wages and trade union recognition rights.WHAT IS THE DIFFERENCE BETWEEN SOCIALISM AND COMMUNISM? If you listen to conversations around the topic, you will notice that many people use the terms socialism and communism interchangeably. But do these terms mean the same thing?Though often confused, socialism and communism are two distinct philosophies with distinct differences. The confusion between the two terms stems from the fact that both socialism and communism seek to establish equality among all members of the society, both advocate for public ownership of resources and that both depend on individual contribution to the society based on one’s ability.That said, there are some very big differences between the two systems.First, socialism is a liberal system. The central authority in charge of the economy (whether this is the government or a cooperative) is popularly elected, giving the people a say on the running of the economy.Communism, on the other hand, is more authoritarian. The people do not have any say over the running of the economy. Second, socialism advocates for the distribution of wealth produced by the economy according to an individual’s productivity. Workers earn wages that they can spend on whatever they want.This gives people an incentive to work harder. Under communism, wealth is distributed according to the government’s assessment of an individual’s needs. There is little incentive to achieve more or innovate. As a result, communism is often characterized by low production, limited advancement and mass poverty.Finally, socialism and communism differ based on their approach to ownership of property. Under socialism, the means of production are publicly owned, while individuals retain the right to own and enjoy personal property. For instance, an individual can own a television but cannot own a factory that produces televisions.Under communism, everything is publicly owned. Individuals are only given the right of usage, while ownership is ultimately retained by the state. You can think of it as living within a military barracks. You might be assigned a house to live in and a vehicle to commute with.While you have the right to use and take care of both items, they do not belong to you. If you leave the military, the military will take control of the house and car and assign them to another soldier.TYPES OF SOCIALISMThere are various types of s ocialism, each emphasizing different aspects of socialist ideology and each advocating for different methods of turning capitalism to socialism.However, all forms of socialism share social ownership as a common element. The major types of socialism include:Market SocialismThis is a type of socialism where the means of production is owned by workers. Goods produced are distributed among the workers, while any excess production is sold on the free market.In this kind of socialism, production and consumption are controlled and regulated by market forces instead of the state.Democratic SocialismThis type of socialism results from the merging of the democratic system with socialist goals. A government that is chosen through popular election manages the means of production.Authoritarian State SocialismThis is an extreme type of socialism where all means of production are owned and controlled by the state.Authoritarian state socialism advocates for strict obedience to state by the people, even if that means they should forego their rights. Marxism-Leninism is an example of authoritarian state socialism.Revolutionary SocialismThis is a socialist doctrine that believes that it is impossible to instill social change peacefully. Revolutionary socialism believes that the transition from capitalism to socialism can only be effected through a revolution.Utopian SocialismThis term is used to refer to the first wave of modern socialist thought as pushed by the works of people such as Robert Owen, Charles Fourier, Henri de Saint-Simon and Etienne Cabet.Their ideology is referred to as utopian because it is more of a vision than a concrete plan. Utopian socialism cannot be achieved in reality.Libertarian SocialismThis term refers to anti-authoritarian socialist philosophies that believe centralized state ownership and control of the economy is not necessary for socialism to be achieved.Religious SocialismThis refers to forms of socialist ideology that are based on religious val ues. Many religious values about human society are aligned with socialist ideas and have been used to advocate for socialism.Any form of socialism that developed within a religion can be termed as religious socialism.Green SocialismThis is a type of socialism that merges socialist thought with green politics. Green socialism advocates for preservation of natural resources.Fabian SocialismThis type of socialism advocates for achievement of democratic socialism through gradual reforms and other peaceful means, rather than through revolution.BENEFITS OF SOCIALISMSocialism has a number of benefits which made it an appealing economic system at a time when capitalism was rife with injustices and exploitation. Some of the benefits of socialism include:Social JusticeThis is perhaps the greatest advantage of socialism. Socialism advocates for elimination of economic inequalities and the even and equitable distribution of the national income. Under socialism, everyone gets their fair share of the national wealth. All the people are given equal opportunities and exploitation is eliminated.Production Based On NeedOne of the major downsides of capitalism is that production depends on the purchasing power of the tiny elite. The super-rich ride in Lamborghinis and travel in private jets while the poor cannot afford a meal. Socialism prevents such scenarios. Under socialist economies, production is directed to ensure that the basic needs of the masses are met first.Egalitarian Distribution Of Wealth And IncomeSocialist economies are dedicated to providing equal opportunities for all. There is no exploitation. Wealth is distributed to workers based on their input to the economy. This prevents situations where a few members of society piggyback on the efforts of workers to create and amass wealth for themselves.Rapid Economic DevelopmentUnder a socialist economy, there is a central authority in charge of planning for the use of resources and making quick decisions. Resources ar e used fully and there is minimal wastage. This leads to fast economic growth of socialist states. A good example of this is the development that was made by the USSR in its early years.Balanced Economic DevelopmentWith the economic planning that is central to socialism, development can be carried out in a balanced manner within the entire country. Instead of having development focused on certain areas, economic planning ensures that all regions are developed, including backward areas. Similarly, planning ensures that all sectors of the economy develop at par with each other.Economic StabilitySocialism also minimizes the risk of economic instability. Under capitalism, economies often undergo fluctuations, which can lead to wastage of resources and high levels of unemployment. This is very unlikely in a socialist economy. Since the economy is well planned, and owing to the fact that there is no private investment, economic fluctuations are a rare occurrence in socialist economies.Eco logical ConservationOne of the biggest problems with capitalistic economies is that there is great disregard for natural resources. Private enterprises care more about profits than the future of the world. Socialism, on the other hand, is not driven by profit. Since the economy is controlled by a central authority, this authority can plan for the future and put in place measures to ensure that the country’s natural resources are conserved and utilized efficiently.Minimal Exploitation And Class StrugglesOne of the main objectives of socialism is to create a classless society where all members are equal. There is no rich class that can exploit the poor. There is no discrimination and no favors accorded to some members of the society because everyone is equal. This eliminates the class struggles that are a major part of capitalistic economies.Social WelfareAnother advantage of socialism is that it caters for the needs of all members of society. All the basic needs of an individual ar e catered for by the state. Imagine a situation where the state provides you with food, a house, clothing, healthcare, education and employment. If you get involved in an accident while performing your duties, the state cares and provides for your family as you recover. In such an economy, people can dedicate themselves to work without a lot of worry about tomorrow, which leads to increased productivity. Compare this to capitalist societies where a person might be employed yet doesn’t earn enough to get house to sleep at night or to pay for healthcare when he falls sick.DISADVANTAGES OF SOCIALISMDespite its numerous advantages, socialism is not all virtue. Socialism also has its disadvantages, some of which ultimately led to the fall of some economies that were purely socialistic. Some of the disadvantages of socialism include:No Suitable Basis Of Cost CalculationIn a capitalistic economy, the cost of production and the subsequent pricing of products is determined by market forces . In socialistic economies, on the other hand, market forces are not at play. Since the means of production are owned by the government, which also doubles as the sole entrepreneur, the means of production do not have a market price. This creates a situation where there is no suitable basis of calculating the production costs for goods and services.Lack Of IncentiveSocialism advocates for communal wellbeing over personal gain or self-interest. Since socialism is against the accumulation of wealth for yourself, it gets to a point where additional effort on your part does not result in any gain for yourself. Without the motive for profit, workers lack the incentive to work hard and be innovative. This ultimately leads to low productivity and decreases the rate of economic development.Lack Of Economic FreedomThrough social ownership, socialism takes away people’s freedom to enterprise, which in turn takes away people’s free choice of occupation. Unlike in capitalistic economies whe re you are free to choose your occupation, workers are assigned jobs by the planning authority in a socialistic economy. The workers cannot change their jobs without the consent of the planning authority.Lack Of Consumer FreedomCapitalistic economies provide consumers with choice. You don’t like Coca-Cola? You can drink Pepsi. Feel like a Ferrari is too expensive for you? Well, you can go ahead and buy a Mercedes, or a Chevy. Basically, you have freedom of choice. Under a socialist economy, you don’t have such choice. The planning authority determines the products that will be produced as well as the prices for this products. If you don’t like a product or its price, there is not much you can do. It’s a take-it-or-leave-it situation.EXAMPLES OF SOCIALISMToday, it would be hard to point to countries that are purely socialist. Still, there are countries that identify as majorly socialist, though they also incorporate some little forms of capitalism or communism.Some examples o f such communist countries include:Before its collapse in 1991, the U.S.S.R was a socialist state. All the means of production were controlled by the state. If you wanted milk in the morning, you got it from the government. The cow and the land were owned by the state. Owning a cow for commercial purposes would be treated as a crime.Cuba is another prominent example of a socialist nation. The government controls the economy, all levels of education, the national health education, housing, subsidized food programs, utilities, and even entertainment. The country does not have a stock exchange, which is a major indicator that the country is not capitalistic. 80% of the workforce in Cuba works in state facilities.North Korea is another country that is majorly socialist. Its economy and several social programs are ran by the state. Just like Cuba, North Korea does not have a stock exchange.China cannot be termed as purely socialist, though it still has some aspects of socialism. While th e country has abolished state-run healthcare, many regions in China are socialist. Capitalism is only allowed in specific geographic zones known as Special Economic Zones. Anyone who wants to own their own business in China has to move to these Special Economic Zones.Countries like Turkmenistan, Laos, Zambia, Belarus, Venezuela, Vietnam, and Syria are also considered to be socialist, since their governments are strongly involved in different sectors like healthcare, social programs and the media.WRAPPING UPLately, the term socialism has become increasingly popular, though many have been misusing the term without a proper understanding of its real meaning. Socialism is an economic system of social organization where the means of production are socially owned, rather than being privately owned.Socialism was brought into mainstream popularity by the writings of Karl Max. There are various types of socialism, each emphasizing different aspects of socialist ideology and each advocating f or different methods of turning capitalism to socialism.Like all other economic and political philosophies, socialism has its benefits and disadvantages.Today, while socialism has lost its place as a major economic ideology in the world, we still have a number of countries that practice socialism, either fully or partially, including countries like Cuba, Chin, North Korea, Venezuela and Vietnam.