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system of government where the means of production are socially owned
New Harmony, a model community presented by Robert Owen, 1838

Socialism is an economic and political system. It is an economic theory of social organization. It believes that the means of making, moving, and trading wealth should be owned or controlled by the government as a whole. This means the money made belongs to the people who make the things, instead of a group of private owners. People who agree with this type of system are called socialists.[1]

How can a society own the means of making wealth? There are two ways socialists answer this question:state (government of the country) or worker-owned cooperatives important belief is that management and sharing are supposed to be based on public interests. Socialists believe that everything in society is made by the cooperative efforts of the people and citizens.[2]


Flavors of socialismEdit

There are many kinds of socialism. But in all types, the workers own the means of production.[3] The major differences between the different varieties are the role of the free market (market planning), how the means of production are controlled, the role of management of workers, and the government's role in the economy.


Another kind of socialism is "collectivization." In this system, money and goods are shared more equally among the people, with the government in control. In theory, this system results in the gap between classes getting smaller, with the state helping the nation's poorest people, while the richest agree to higher taxes and economic restrictions.

Communism as a goalEdit

Some socialists believe that socialism will evolve into what they see as a more advanced system: communism, with no state, money, or social classes.[source?] In Marxist theory, socialism is a temporary social state between capitalism and communism, although some socialist nations now exist that have no intention of transitioning to communism (like western European states).[source?]

Most non-communist people say "communism" when they mean the Marxist and Leninist ideas of Russia's Bolshevik party. Marx believed that capitalism followed the economic and political system of feudalism. He also believed that capitalism would treat unfairly many people and that those people would eventually revolt and change to socialism. Then he thought that socialism can be another bridge, but to communism. However, many people incorrectly use the term "Communist" to refer to a socialist state. Others call this 'State Socialism,' to distinguish it from the communist goal that does not need a state or any form of government. To non-communists, the word 'socialism' is now used mostly for attempts to come close to this goal in a democratic state.

Social democracyEdit

Social democracy is a kind of socialism that tries to mix parts of socialism with capitalism. In this system, the government takes money from the rich and gives it to the poor like in a Communist state, but despite there being more government control and less chance to make a very large amount of money, people can still run their own businesses and own private property. Unlike communism, where all private property is owned publicly, in social democracy people and businesses pay taxes on their property, and this money is spent on public services, after taking out the costs of running the government and collecting the taxes. The main method of democratic socialism is changing society through slow reform rather than a quick revolution.

In social democracies, some services and industries are subsidized (given money to help them run), or partly controlled by the government, or both. For example, education, health care, housing, utility companies and public transportation are some industries that might be owned/supported by the government in a socialist system. For the most part, people working in these industries are paid by the government, with money paid by the people as taxes. Welfare is also likely offered under socialism.

Democratic socialismEdit

Today many democratic socialists, especially in Western Europe, Australia, and New Zealand want industries to be guided both by representatives of shareholders (people who own part of the business) as well as the workers working together in what is known as an industrial democracy because both groups want the business to do well. This would be a more direct democratic way of organizing, rather than control by central government. Trade unions and workers councils would represent the interests of the employees.


Many countries see socialism differently. Socialist International is an organization dedicated to the cause of promoting socialist ideals, and has ties with many socialist parties, especially Social Democratic parties.


A Welshman, Robert Owen, was the first socialist. His followers began calling themselves socialists in 1841.[4] He is still regarded as a pioneer of the Co-operative Movement in Britain. He said that workers should own the companies they worked for. The workers would then share the profits among themselves. He set up a new model factory in New Lanark, Scotland.[5]

Karl Marx is the most well-known creator of the theory of socialism, and of communism. He wrote a book about capitalism, socialism, and communism, called "The Communist Manifesto". Friedrich Engels co-wrote the book, and paid for much of Marx's work and research.

Many socialist political parties were formed during the 19th century and early part of the 20th century. Left-wing political parties are mostly newer than right-wing ones.[source?]

Socialism with "Chinese characteristics"Edit

Socialism with Chinese characteristics applies socialism and Marxism to the actual conditions of China.[6] One example is Deng Xiaoping's Chinese economic reform.[source?] The ideology consists of:

  1. Economically, China has different types of ownership but in accordance with socialism, public ownership takes the leading role.[6]
  2. Politically, China sticks to one party rule (the People's Congress). Some authors claim it is "a system of multiparty cooperation". Regardless, it seeks political consultation and regional ethnic autonomy.[6]
  3. Culturally, China uses socialism as the base for social trends, but also respects differences in local culture, while finding what is common.[6]

Related pagesEdit


  1. Durlauf, Steven N.; E. Blume, Lawrence. "socialism". DICTIONARY OF ECONOMICS. Palgrave Macmillan 2013.
  2. Nove, Alec. 2008. "Socialism". New Palgrave Dictionary of Economics, 2nd ed.
  3. Lamb, Peter & J.C. Docherty. 2006. Historical dictionary of socialism. Lanham, Maryland, UK; Oxford, England, UK: Scarecrow Press. p. 1.
  4. Gale (2001). "Socialism" . World of Sociology. Retrieved 15 June 2011.
  5. "Socialism". Encyclopedia of World Trade From Ancient Times to the Present. 2005. Retrieved 15 June 2011.
  6. 6.0 6.1 6.2 6.3 Chi, Liu. "socialism with Chinese Characteristics". CRIENGLISH.