What is socialism? definition and examples (2023)

Socialism is an economic, social and political theory that advocates collective or state control and management of a country's economic means of production. The means of production include all the machines, tools, farms, factories, natural resources, and infrastructure used to produce and distribute the goods needed to directly meet people's needs. Under socialism, any surplus or profit derived from these means of production owned by the citizens is shared equally by the same citizens.

Key finding: What is socialism?

  • Socialism is an economic, social and political system based on public rather than private ownership of a country's means of production.
  • The means of production include the machines, tools, and factories used to produce the goods necessary to meet human needs.
  • In a socialist system, all decisions regarding production, distribution and pricing are made by the government.
  • Citizens in socialist societies depend on the government for everything, including food, housing, education, and health care.
  • While socialism is seen as the opposite of capitalism, most modern capitalist economies today, including the United States, exhibit some aspects of socialism.
  • The main goal of socialism is the elimination of socio-economic classes through equal distribution of income.

Although there are different forms of socialism, in a pure socialist system all decisions about the legal production and distribution of goods and services, including production and price levels, are made by the government. Individual citizens depend on the government for everything from nutrition to health care.

history of socialism

Socialist concepts that envisioned common or state ownership of production go back in timeMosesand formed an important part of the ancient Greek philosopherPlatotheory ofutopianism. However, socialism as a political doctrine developed in the late 18th and 19th centuries in opposition to the abuses of uncontrolled capitalist individualism that resulted infrench revolutionand itIndustrial Revolutionin Western Europe. While some individuals and families quickly amassed vast fortunes, many others fell into poverty as a resultincome inequalityand other social concerns.

utopian socialism

Outraged by the poverty of so many workers, radical critics of industrial capitalism tried to persuade the working-class "bourgeoisie" to peacefully create a new "perfect" society based on a completely fair distribution of goods. The term socialist was first used around 1830 to describe the more influential of these radicals, who later became known as "utopian" socialists.

Among the most prominent of these utopian socialists were the Welsh industrialist Robert Owen, the French writer Charles Fourier, the French philosopher Henri de Saint-Simon, and the French socialist Pierre-Joseph Proudhon, who famously declared, "Property is theft."

These utopian socialists believed that the working class would eventually unite against the "idle rich," inclusiveAdel, in creating a "fairer" society based on small collective communities rather than a centralized state. While these utopian socialists made a significant contribution to the critical analysis of capitalism, their theories, while profoundly moral, failed in practice. The utopian communes they founded, like OwensThe Lanarkin Scotland eventually developed into capitalist societies.

marxist socialism

Arguably the most influential theorist of communism and socialism, Prussian political economist and activist,Karl Marx, rejected the visions of utopian socialists as unrealistic and dreamy. Instead, Marx argued that all productive societies would eventually be divided into socioeconomic classes, and that once the upper class controlled the means of production, it would use that power to exploit the working class.

What is socialism? definition and examples (1)

In his 1848 bookThe Communist ManifestoMarx not only provided an early critique of capitalism, but also put forward the theory of "scientific socialism", which rested on the belief that scientifically quantifiable historical forces - economic determinism and class struggle - determined the achievement of socialist goals mostly by violent means . In this sense, Marx argued that all history is a history of class struggle and that true "scientific socialism" is only possible after a revolutionary class struggle in which the working class inevitably triumphs over the capital controlling class and takes control of the means of production succeed in establishing a truly classless society.

Marx's influence on socialist theory only grew after his death in 1883. His ideas were picked up and developed by influential leaders such as the Russian revolutionaryVladimir Leninand father of modern ChinaMao Zedongand various political parties, such as today's Social Democratic Party in Germany.

Marx's original belief in the need for a revolutionary struggle between capital and the working class dominated socialist thought throughout the rest of the 19th century. However, other varieties of socialism continued to develop. Collective societies based on Christian religious principles emerged under Christian socialism.anarchismcondemned both capitalism and government as harmful and unnecessary. Democratic socialism believed that instead of revolution, gradual political reforms based on full state ownership of production could lead to the establishment of socialist societies.

modern socialism

Especially after thatThe Russian Revolution of 1917and the formation ofUnion of Soviet Socialist Republics(USSR) under Russian revolutionary Vladimir Lenin in 1922,

Democratic socialism and communism established themselves as the most dominant socialist movements in the world. In the early 1930s, Lenin's moderate socialism was replaced by the Communist Party of the Soviet Union and its use of absolute government powerJosef Stalin. In the 1940s, Soviet and other communist regimes fought alongside other socialist movementsfascismIWorld War II. This tenuous alliance between the Soviet Union and theirThe Warsaw PactAfter the war, satellite states disintegrated, allowing the USSR to establish communist regimes throughout Eastern Europe.

With the gradual disintegration of this Eastern Bloc regime during theCold Warand the ultimateThe fall of the Soviet UnionIn 1991, the spread of communism as a global political force was drastically reduced. Today, only China, Cuba, North Korea, Laos and Vietnam are still communist states.

democratic socialism

What is socialism? definition and examples (2)

The rest of the 20th century saw a new, less strict application of democratic socialism, which emphasized state regulation rather than ownership of production, and greatly expanded social programs. Adopting this more centrist ideology, democratic socialist parties took power in many European countries. Democratic socialism is a growing political movement in the United States today that emphasizes social reforms such as free public education and universal health care to be achieved through democratic processes of government and administered in cooperation with the largest capitalist economy.

basic principles

While socialism has historically produced a variety of views and theories, the five common characteristics that define a socialist system include the following:

Collective property:In a purely socialist society, the factors of production are owned equally by all members of society. The four factors of production are labour, capital goods, natural resources and today entrepreneurship - the activity of starting a business. This collective property can be acquired by a democratically elected government or by a public company in which everyone owns shares. The state or cooperative uses these factors of production to meet people's basic needs. The net product produced by the collective means of production is shared equally by all members of society. In this way, collective ownership is essential to the principle of socialism itself, which states that the means of production must be used for the welfare of society and not for the growth of individual wealth.

The belief that people in a socialist society are not allowed to own personal property is a common misconception. While socialism prohibits or at least discourages private ownership of the factors of production, it does not prohibit ownership of personal effects.

Central financial planning:Unlike capitalist economies, socialist economies do not make decisions about how they are managed by the governmentThe laws of supply and demand. Instead, all economic activities, including the production, distribution, exchange and consumption of goods, are planned and controlled by a central planning authority, typically the government. Rather than being dependent on the whims of capitalist market forces, the distribution of wealth in purely socialist societies is dictated by the central planning authority.

No competition in the market:Because the government or state-controlled cooperative is the sole entrepreneur, there is no competition in the markets of true socialist economies. The state controls the production, distribution and pricing of all goods and services. While this allows for limited consumer choice, it allows the government to focus on using market revenues to provide people with essential goods.

As theorized by Marx, socialists assume that the basic nature of human beings is to work together. But they believe that this basic human nature is being suppressed because capitalism forces people to be competitive in order to survive.

Socio-economic equality:Alongside collective ownership of production, social equality is another defining goal of socialism. The socialist faith arose out of rebellion against the economic inequality caused by feudalism and early capitalism. In a purely socialist society there are no income groups. Instead, all people in a socialist economy should have full economic equality.

By eliminationincome equalityAlthough equality has long been the motto of socialists in capitalist states, its meaning of equality is often misunderstood. Socialists advocate a fairer distribution of wealth and income in society. This is in stark contrast toLiberaland some advancedConservativesthat requires needs-based policy-makingEquityin the possibility of achieving prosperity, such aspositive actionin education and employment.

Provision of basic needs:The main advantage of pure socialism, often touted, is that all people's basic needs - food, housing, education, health care and employment - are provided by the government without any discrimination, free or at minimal cost.

Socialists believe that whatever people produce is a social product and that everyone who contributes to that production is entitled to an equal share of it. Or as Marx put it in 1875: "From each according to his abilities, to each according to his needs."

Critics, however, argue that by satisfying basic needs, socialist governments risk leading people to believe that they cannot survive without government, thus creating an environment that promotes upward mobility.totalitarianorautocraticgovernments.

Socialism vs. communism

The basic principles of socialism are often seen in contrast and comparison with those of communism. In both ideologies, the government assumes a greater role in economic planning, investment and institutional control. Both also remove the private sector as a producer of goods and services. While socialism and communism are similar schools of economic thought, both are at odds with the free market ideals of capitalism. There is alsoimportant differencesbetween them. While communism is a strictly exclusive political system, socialism is primarily an economic system that can work in a variety of political systems, including democraciesmonarkier.

In a sense, communism is an extreme expression of socialism. While there are dominant socialist political parties in many modern countries, very few are communist. Even in the highly capitalist United States, there are social assistance programs such as SNAP, Supplemental Nutrition Assistance Programs or "footsteps"is rooted in socialist principles.

Both socialism and communism advocate more equal societies without socioeconomic class privileges. But while socialism is compatible with democracy and individual freedom, communism creates an "equal society" by establishing an authoritarian state that denies basic liberties.

As practiced in Western countries, socialism seeks to reduce economic inequality through participation in the dominant democratic process and the cooperation between both government and private enterprise. Unlike communism, socialist economies reward individual effort and innovation.

Socialism and other theories

Although the ideologies and goals of socialism and capitalism appear incompatible, the economies of most modern capitalist economies exhibit some socialist aspects. In these cases, a free market economy and a socialist economy merge into a "mixed economy", where both the state and private individuals influence the production and distribution of goods.

In 1988, the economist and social theorist Hans Hermann Hoppe wrote that any viable economic system, regardless of its self-identification, functions as a combination of capitalism and socialism. But because of the inherent underlying differences between the two ideologies, mixed economies are forced to constantly balance socialism's predictable obedience to the state with the unpredictable consequences of capitalism's largely unrestrained individual behavior.

What is socialism? definition and examples (3)

This fusion of capitalism and socialism in mixed economies has historically proceeded according to one of two scenarios. In the first case, individual citizens have constitutionally protected rights to property, production and commerce - the basic elements of capitalism. Socialist elements of state intervention develop slowly and openly throughoutrepresentative democraticProcess, typically in the name of consumer protection, supporting industries essential to the common good (eg energy or communications) and providing welfare or other elements of a social "safety net". Most Western democracies, including the United States, have followed this path to a mixed economy.

In the second scenario, purely collectivist or totalitarian regimes slowly integrate capitalism. As the rights of the individual take a backseat to the interests of the state, elements of capitalism are adopted to promote economic growth, if not survival. Russia and China are examples of this scenario.


This is due, among other things, to today's increasing competitivenesscapitalist world economyThere are no purely socialist countries. Instead, most developed countries have mixed economies that combine socialism with capitalism, communism, or both. While there are countries that have embraced socialism, there is no official process or criteria for designating a socialist state. Some states that claim to be socialist or whose constitutions state that they are based on socialism may not follow the economic or political ideologies of true socialism.

Today, elements of socialist economies—health insurance, pension plans, and access to free higher education—are present in several countries, especially in Europe and Latin America.

socialism and Europe

The socialist movement in Europe is represented by the inclusive Party of European Socialists (PES).28 member statesofEuropean Unionplus Norway and Great Britain. PES also includes the Social Democratic Party of Germany, the Socialist Party of France, the British Labor Party, the Democratic Party of Italy and the Socialist Workers Party of Spain.

As a socialist and social democratic electoral bloc in the European Parliament, PES' current aim is to "pursue international objectives in accordance with the principles on which the European Union is founded, namely the principles of freedom, equality, solidarity and democracy.", respect for human rights and fundamental freedoms and respect for the rule of law."

The most socialist systems in Europe are found in the five Nordic countries - Norway, Finland, Sweden, Denmark and Iceland. On behalf of the people, these states own a large part of the economy. Much of their finances are spent on providing free housing, education and public welfare. Most workers are members of unions, which gives them more power. Most importantly, all five countries are democracies, which gives the general population a large influence on decision-making. Since 2013 UNWorld Happiness Reporthas ranked the northern European countries that use the Nordic states' model of socialism as the happiest nations in the world, with Denmark at the top of the list.

Socialism in Latin America

Perhaps no region in the world has such a long history of populist, socialist and communist movements as Latin America. For example, the Socialist Party of Chile under the later Chilean president,Salvador Allende, the National Liberation Army that has existed in Colombia since 1964, and the regimes of the Cuban revolutionariesChe GuevaraAndFidel Castro. AfterThe collapse of the Soviet UnionBy 1991, however, the power of most of these movements had declined sharply.

Argentina is now considered one of the most socialist countries in Central and South America. In 2008, for example, Argentina's government under President Cristina Fernández de Kirchner responded to inflationary problems by confiscating private pension plans to shore up the country's strained social security fund. Between 2011 and 2014, the Kirchner administration introduced more than 30 new restrictions on the free movement of capital and currency, including higher taxes on the purchase of foreign products, restrictions on the purchase of foreign currency, and new taxes on the sale of airline tickets to foreign destinations.

Other Latin American countries strongly associated with socialist movements are Ecuador, Cuba, Bolivia and Venezuela. Others, such as Chile, Uruguay and Colombia, are considered less socialist.

Much of the spread of socialism across Latin America is attributed to the failure of well-intentioned efforts by multinational organizations such as the International Monetary Fund and the IMF to strengthen the region's economy. In the 1980s and 1990s, many Latin American countries relied on foreign credit, printed large amounts of money, and shifted the focus of their economic activity from serving the common good to improving their trade balances.

This policy was blamed for the decline in economic outputInflationand increased social inequality. In Argentina, for example, average annual inflation peaked in 1990 at over 20,000%. Forced to default on its foreign loan obligations, the country has left its people in poverty. The backlash against this irresponsible economic policy played an important role in the rise of the Latin American socialist movement.


  • "Socialism."Stanford Encyclopedia of Philosophy, 15. july 2019, https://plato.stanford.edu/entries/Socialism /#SociCapi.
  • Rapport, Angelo."Dictionary of Socialism."London: T. Fischer Unwin, 1924.
  • Hoppe, Hans Hermann."A Theory of Socialism and Capitalism."Kluwer Academic Publishers, 1988, ISBN 0898382793.
  • Roy, Avik. "European Socialism: Why America Doesn't Want It."Forbes, 25. October 2012,
  • ttps://www.forbes.com/sites/realspin/2012/10/25/european-socialism-why-america-doesnt-want-it/?sh=45db28051ea6.Iber, Patrick. „Der Weg zu
  • Democratic Socialism: Lessons from Latin America."Dissent, Spring 2016, https://www.dissentmagazine.org/article/path-democratic-socialism-lessons-latin-america.
  • Gornstein, Leslie. "What is socialism? And what do socialists really want in 2021?" CBS News, 1 Apr. 2021, https://www.cbsnews.com/news/what-is-Socialism/.


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