Socialism is a political and economic system of state where the mass people have the power to control the means of production - distribution - exchange and there is no owner of that. It’s regarded as the opposite system of pure capitalism.
When a state is created, first it decides its constitution which is the fundamental law and foundation of all the sectors which are essential in running the state. When it comes to the ownership of resources, in every country the property is owned either by the private persons or by the government. This is determined by the economic system which the government chooses to incorporate in the sector of trade and industry.
Socialism is a strategy by which an economy operates. In order to fully understand socialism let’s look into two illustrations:
- In Country A, a private organization XXX Pvt. Ltd supplies electricity to the entire city. It invests in the reforms, develops the plants, bills the people and earns the profits, keeping all earnings to itself like any other private business.
- In Country B, the YYY is a state-owned company that supplies electricity to the whole country. All the people who work in the company are state employees and the state is responsible to pay them the salaries. Even the topmost officials of the company don’t get any share in the income that the company generates from the supply of electricity.
In the above two illustrations, the common thing is ownership of the electricity company. The only point distinguishing the both is the governmental control and the right over the income. The former country involves a capitalist economy and the latter is a socialist economy.
Centralized economic planning
The system on which a socialist economy is based is called socialism. All the resources, properties, lands and industries are owned by the government. This economic system entails centralized economic planning, in which the center or state holds rights over all the financial resources with zero participation of people in economic matters.
In socialism, there’s no concept of private businesses and jobs. People work only for the state. The state keeps all the financial matters to itself for serving the purpose of public welfare.
Socialism disapproves of the concept of concentration of wealth. Nobody has the right and authority to accumulate more wealth than others and all the resources are equally distributed among the masses.
Socialism is in fact aimed at providing citizens with maximum benefits, like free health, education, and other facilities but at the same time, there is a number of loopholes in this economic system. It kills the efficiency and extraordinary skills in the people who can otherwise prove to be great assets for the development of their State on a global level. The reason is that in socialism all people get the same benefits even if some of them invest more energy, effort, expertise and efficiency than others. No matter how better a person performs than others if they don’t get the compensation that they deserve then they wouldn’t be motivated to make an extra effort ever again. Despite lack of poverty, inequality, and stability, the system has the least chances of growth due to lack of motivation and freedom in people. Besides, excessive governmental intervention in all fields of life makes it impossible to work for a positive change. With this level of discouragement, ultimately people are at the end of their tether and the socialist system ultimately turns out to be failure.
Facts About Socialism
- Frenchman Pierre Leroux used the term “socialism” for the first time in his journal Le Globe in 1832.
- The disciples of Robert Owen mentioned the same term for the first time in England.
- François-Noël Babeuf, Jean-Jacques Rousseau, and Henri de Saint-Simon were the personalities to support the theory of socialism.
- French Revolution (1789) is also known as a Socialist Revolution.
- The “metaphysical egalitarianism” is the core of the concept of socialism.
- Socialism has nothing to with atheism; rather it has a distinct conflict.
- Socialism is generally categorized into two ideologies: Marxist-Leninist and non-Marxist-Leninist.