It is a socio-economic system characterised by social ownership and democratic control of means of production, as well as political theories and movements associated with them. It is a form of society which resulted from the evils of the capitalist system. No society can be socialist before having gone through the stage of capitalism. Social ownership may be in terms of public ownership, collective or cooperative ownership, or citizen ownership.

Forms of Socialism

1. Utopian socialism

It showcases a perfect egalitarian and communist society that does not accommodate any revolutionary practices (such as industrial revolution or social revolution). It favours collective peace and prosperity and on similar basis tries to achieve the collective good and long-term happiness. Utopian socialism is the most idealist social condition, which is not feasible anywhere.

2. State socialism or collectivism

It believed in the supremacy of the State. State was a positive good which is necessary for bringing the people out of exploitation. The people have the capacity to improve their conditions as members of the State and within the aegis of the State and not outside the State. It wishes that State activities should be increased so that State becomes a welfare State and undertakes maximum welfare activities. It bitterly opposed to the capitalist system because in that the means of production are controlled by few persons and used for their own advantage. All means of production should be controlled by the State and used for collective welfare. The factories should be allowed by the produce only what is needed by the society. It, therefore, favour State controlled industry. There should be a just distribution of wealth and the State should not allow concentration of wealth just in few hands.

3. Marxist Communism

Classless, stateless social organisation based upon common ownership of means of production. It calls for elimination of all forms of leadership and govern with a commune where people themselves contribute to the social welfare and take all collective decisions.

Effect on Society

Positive effect:

  • In theory, based on public benefits, socialism has the greatest goal of commonwealth (individual benefits).
  • Equitable distribution: Since the government controls almost all of society’s functions, it can make better use of resources, labours and lands.
  • Socialism reduces disparity in wealth, not only in different areas, but also in all societal ranks and classes.
  • Excess or insufficient production can be avoided (discard social luxuries)
  • Socialism can tackle unemployment to a great extent with special focus to women in the society.

Negative effect:

  • Increased the economic suffering and political tyranny.
  • More easily substituted with democratic capitalism.
  • Involvement of state in the production process has raised the inefficiency in the society and economy.
  • Too much dependence on cooperative pooling against the social wishes.

Basic difference between Communism and Socialism

Ownership of Means of ProductionAll means of production are owned by the community as a whole.Means of production can be owned by the state, collective groups, or individuals.
Economic SystemA classless society with no private ownership and central planning of the economy.An economic system where the state or community controls key industries, but private ownership and market mechanisms may still exist.
Distribution of Wealth“From each according to their ability, to each according to their needs.” Resources are distributed equally among all members of society.Distribution of wealth is based on contribution and needs, with more emphasis on equality and reducing wealth disparities compared to capitalism.
Social StructureA society without social classes, where everyone is considered equal.A society with reduced social classes, but some degree of social stratification may still exist.
Political SystemA single-party system where the state holds significant control and power.Can have a multi-party system, with varying degrees of state intervention and control.
Transition to Ideal StateAchieved through a revolution and overthrow of the capitalist system.Achieved through democratic reforms and the gradual transition from capitalism.
Role of IndividualIndividual interests are subordinate to the collective interests of the community.Individual interests are considered within the framework of societal interests.
ExamplesHistorical examples include the Soviet Union, China under Mao Zedong, and Cuba under Fidel Castro.Examples include Scandinavian countries (e.g., Sweden, Norway) with their welfare states, and some mixed economies with social welfare programs.

Basic difference between Capitalism and Socialism

Economic SystemPrivate ownership of the means of productionPublic or collective ownership of the means of production
Distribution of WealthUnequal distribution of wealth and incomeEqual or more equitable distribution of wealth and income
Role of GovernmentLimited government intervention in the economyExtensive government intervention and control over the economy
CompetitionEncourages competition among businessesEmphasizes cooperation over competition
Profit MotiveProfit maximization is the primary driving forceProfit motive is deemphasized or eliminated
Market MechanismFree market determines prices and allocation of resourcesCentral planning determines prices and allocation of resources
Social ServicesLess emphasis on government-provided social servicesGreater emphasis on government-provided social services
InnovationEncourages innovation and entrepreneurshipInnovation is directed towards meeting societal needs
InequalityCan lead to income inequalityAims to reduce or eliminate income inequality
Individual FreedomEmphasizes individual freedom and choiceEmphasizes collective welfare over individual freedom
ExamplesUnited States, United KingdomCuba, China, North Korea
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