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Updated February 26, 2019

Socialism is an economic system where everyone in society equally ownsthefactors of production. The ownership is acquired through a democratically elected government. It could also be a cooperative ora public corporation where everyone owns shares. The four factors of production arelabor, entrepreneurship,capital goods,andnatural resources.

These factors are valued only for their usefulness to people.

Socialists take into account both individual needs and greater social needs. They allocate resources using central planning, as in acommandeconomy.

Examples of the greater social needs includetransportation, defense, education, health care, and preservation of natural resources.Some also define the common good as caring for those who can't directly contribute to production. Examples include the elderly, children, and their caretakers.

A mantra of socialism is, "From each according to his ability, to each according to his contribution." Everyone in society receives a share of the production based on how much each has contributed. This system motivates them to work long hours if they want to receive more. Workers receive their share of production after a percentage has been deducted for the common good.

Socialists assumes that the basic nature of people is cooperative. They believe that this basic nature hasn't yet emerged in full becausecapitalismor feudalism has forced people to becompetitive.

Socialists argue that the economic system must support this basic human nature before these qualities can emerge.

Under socialism, workers are no longer exploited becausethey own the means of production. Profits are spread equitably among all workers according to their individual contribution.

But the cooperative system also provides for those who can't work. It meets theirbasic needs for the good of the whole society.

The system eliminates poverty. It providesequal access to health care and education. No one is discriminated against.

Everyone works at what one is best at and what one enjoys. If society needs jobs to bedone that no one wants, it offers higher compensation to make it worthwhile.

Natural resources are preserved for the good of the whole.

The biggest disadvantage of socialism is that it relies on the cooperative nature of humans to work. It ignoresthose within society who are competitive, not cooperative. Competitive people tend to seek ways to overthrow and disrupt society for their own gain. Capitalism harnesses this "Greed is good" drive. Socialism pretends it doesn't exist.

As a result, socialismdoesn't reward people for being entrepreneurial. It struggles to be as innovative as a capitalistic society.

A third disadvantage is that thegovernment has a lot of power. This works as long as it represents the wishes of the people. But government leaders can abuse this position and claim power for themselves.

Socialists believe their system is the next obvious step for any capitalistic society. They see income inequality as a sign of late stage capitalism. They argue that capitalism's flaws mean it has evolved past its usefulness to society. But capitalism's flaws are endemic to the system, regardless of the phase it is in.

America's Founding Fathersincluded promotion of the generalwelfare in the Constitution to balance capitalism'sflaws. It instructed thegovernment to protect the rights of all to pursue their idea of happiness as outlined in theAmerican Dream. It's the government's role to create a level playing field to allow that to happen. That can happen without throwing out capitalism in favor of another system.

There are no countries that are 100 percent socialist, according to the Socialist Party of the United Kingdom.

Most havemixed economiesthat incorporate socialism with capitalism,communism,or both.

The following countries have strong socialist systems:

Norway, Sweden, and Denmark: The state provides health care, education, and pensions. But these countries also have successful capitalists. Thetop 10 percentof each nation's peoplehold more than 65 percentof the wealth. That's because most people don't feel the need to accumulate wealth since the government provides a great quality of life.

Cuba, China, Vietnam, Russia, and North Korea: These countries incorporate characteristics of both socialism and communism.

Algeria, Angola, Bangladesh, Guyana,India,Mozambique,Portugal,Sri Lanka, andTanzania: These countries all expressly state they are socialist in their constitutions. Their governments run their economies. All have democratically-elected governments.

Belarus, Laos,Syria, Turkmenistan, Venezuela,and Zambia: These countries all have very strong aspects of governance, ranging from health care, the media, or social programs run by the government.

Many other countries, such as Ireland, France, Great Britain, Netherlands, New Zealand, and Belgiumhave strong socialist parties. Their governments provide ahigh level of social support. Butmost businesses are privately owned. This makes them essentially capitalist.

Manytraditionaleconomies use socialism, although many still use private ownership.

There are eight types of socialism. They differ on how capitalism can best be turned into socialism. They also emphasize different aspects of socialism. Here are the major branches, according to"Socialism by Branch."

Democratic Socialism:The means of production are managed by the working people, and there is a democratically elected government. Central planning distributes common goods, such as mass transit, housing, and energy, while the free market is allowed to distribute consumer goods.

Revolutionary Socialism:Socialism will emerge only after capitalism has been destroyed. "There is no peaceful road to socialism." The factors of production are owned by the workersand managed by them through central planning.

Libertarian Socialism:Libertarianism assumes that the basic nature of people is rational, autonomous, and self-determining. Once the strictures of capitalism have been removed, people will naturally seek a socialist society that takes care of all, free of economic, political, or social hierarchies.That's because they see it is the best for their own self-interest.

Market Socialism:Production is owned by the workers. They decide how to distribute among themselves. They would sell excess production on the free market. Alternatively, it could be turned over to society, which would distribute it according to the free market.

Green Socialism:This type of socialistic economy highly values the maintenance of natural resources. Public ownership of large corporations achieves this. It also emphasizes public transitand locally sourced food. Production focuses on making sure everyone has enough of the basics instead of consumer products one doesn't really need. This kind of economy guarantees a livable wage for everyone.

Christian Socialism:Christian teachings of brotherhood are the same values expressed by socialism.

Utopian Socialism:This was more a vision of equality than a concrete plan. It arose in the early 19th century, before industrialization. It would be achieved peacefully through a series of experimental societies.

Fabian Socialism:This type of socialism was extolled by a British organization in the late 1900s. It advocated a gradual change to socialism through laws, elections, and other peaceful means.

Continued here:
Socialism: Definition, Pros, Cons, Examples, Types