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What is socialism? Types, Advantages and Disadvantages

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Socialism is a political, economic, and social system based on collective ownership of means of production. Every person in the community has an equal share of the various elements of production. According to socialism, people live in cooperation with one another. In a socialist system, the ownership is acquired through a democratically elected government in which everyone owns a share of communal resources.

In a socialist economy, the government controls the means of production and also owns them. Private ownership is also allowed but in the form of a consumer of goods.

Origin and history of socialism

Socialism was founded to oppose the two other ideologies that were already in place. That is capitalism and liberal individualism. Its origin can be traced back to ancient times when Plato, a philosopher, talked about collective society in his dialogue. In the 19th century, Plato’s idea was greatly supported by an England philosopher, Thomas More, who drew on Plato’s ideals for his utopia. The idea of Thomas More advocated for people to live and work communally.

In the 18th century, the idea of socialism was further promoted by the advancement of the Industrial Revolution. The Industrial revolution promoted individualism and capitalism, where few individuals accumulated a lot of wealth while other workers lived in increasing poverty. Socialism was to be applied to curb and respond to the growing capitalist system in society. A great rise of socialism idea was seen in 1848 when the two European communists (Karl Marx and Friedrich Engels) wrote a socialism article, The Communist Manifesto. The article advocated the revolutionary clash between capital-labor. Marx’s idea awakened many socialist after his death in 1883. In 1899, the first world socialist party was formed, The Australian Labor Party, to promote the Marxism idea.

In the 20th century, there was the formation of many social democratic parties in European countries that promoted the ideology of socialism. The Soviet Union and communist parties were formed to represent socialism. Soviet model of economic development and the creation of centrally planned economies ensured all means of production were controlled by the state. Later, many other parties were formed to advocate the idea of socialism.

Types of socialism

Socialism occurs in many different forms. These forms differ from one another, but they are all target to end the capitalist system. Below are some of the types of the socialist system.

1. Democratic socialism

Under this type of socialism, a factor of production is under the management of the central government, and there is a greater willingness to use market forces. The tax system and free-market system are applied in this socialism. The free market system is used to distribute consumer products, while the tax system is used to distribute high taxes from privatized companies.

2. Christian socialism

This kind of socialism is aimed at providing an ethical background that facilitates socialism. It is also through this socialism that Christians learn to offer public services like health and education to all with equity.

3. Libertarian socialism

This kind of socialism help to prevent powerful state involved in the management of the economy. It works on the basic assumption that people are always rational and self-determining.

4. Market socialism

In this type of socialism, there exists a mixture of free-market enterprise and state control. However, the production process is under the control of workers, and therefore they decide how resources are distributed.

5. Anarchic socialism

This is another type of socialism that is against the state ownership of property. This socialism advocate that the production should be collectivized and therefore, no equity should be observed, and workers should be paid according to their inputs.

6. Revolutionary socialism

This type of socialism works only where there is no capitalism. In such a system, factors of production are owned and run by workers. However, workers have a well-developed and centralized structure.

Advantages of socialism

·         Social equality

Socialism plays a vital role in promoting social equity in society. It helps in reducing cases of wealth disparities, unemployment, and also helps in controlling inflation.

·         Economic planning

The public ownership of the method of production ensures good economic planning. Socialism ensures good use of factors of production, i.e., land labor and resources and hence avoiding wastage of these factors.

·         Curbs discrimination

The system of socialism in the society rejects discrimination of any kind to the member of the society. Each member has the right to do anything without any discrimination.

·         Redistribution of wealth

This is done through the tax system. Socialism ensures the tax obtained from the tax system is equally shared among members of the society equally. This is achieved through the building of public facilities like schools, health centers, etc.

Disadvantages of socialism  

·         Slow economic growth

A socialist government is associated with retardation in its growth. This is usually brought about by the lack of or less entrepreneurial competition. Also, lack of motivation to the hardworking workers as all are treated the same contributes to the slow growth rate of the economy in a country.

·         Socialism creates a high tax burden on individuals

The tax system applied in the socialist system may be disadvantageous to many individuals. For instance, where an economy has a high rate of progressive taxation, then this creates a high tax burden to individuals, and then there are more disincentives than benefits.

·         Reduces innovative levels

Due to the absence of competition in a socialist system, there are low levels of innovation, and hence this leads to a slow growth rate.

·         Excessive labor in the market

In a socialist government, there can be regulations that limit the number of employment opportunities. Excessive labor market regulations can lead to fewer employment opportunities.

·         Administrative burden

In a socialist government, there is a burden of administration. This is because the government interferes with every activity of its people.

·         Consumer sovereignty is limited

Under a socialist system, consumers are only required to produce the only goods decided by the planning authority and not any other good. These goods are further distributed to people through a rational system. The rational system is against consumers’ freedom.

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