A socialism economy is one whereby the ownership of the means of production is collective or public. In this kind of economy, the means of production is socially owned and targeted at meeting human needs rather than the creation of profits. The concept of socialism emphasizes on the aspect of equality instead of achievement. In this type of political and economic system, workers are valued by the amount of time that they invest rather than the value of their production.
The means of production that are referred to in this context include tools, buildings, technology among other materials that are used in the creation of goods and services in an economy. Social ownership of the means of production can take different forms like autonomous state enterprises, direct public ownership, common ownership or cooperative enterprises.
The means of production in a socialist economic system can be used in the direct satisfaction of economic demands as well as human needs.
As a result of the collective of ownership of the means of production, socialism economy leads to dependence of individuals on the state for almost all their needs ranging from basics like food to healthcare. Some of the nations that operate under socialism ideologies include China, Vietnam and Cuba. The ideologies of socialism are based on bureaucratic collective ownership of property and central planning. To those who embrace socialism, it creates equality and offers economic security to all.
According to the adherents of socialism economy, socialism gives forth the opportunity for wealth distribution based on how much one contributes to the society. The primary goal of socialism is to create equality in social circles and distribution of resources depending on one’s contribution. Accounting to determine what each person earns based on their contribution to the economy can be based on the physical quantities or a direct measurement of the labor time instead of profits or expenditure.
From the time of Karl Max who has been widely associated with socialism, the concept has undergone numerous stages of evolution to bring forth various forms that are evident today. From a political perspective, socialism includes a variety of political philosophies that range from revolutionary socialism to reformism, planned economy to market socialism. In a planned economy, the government is charged with the coordination and distribution of the means of production while ownership is by the public.
Market socialism on the other hand, refers to a case whereby the means of production may be owned publicly or cooperatively but operate in a market economy. This means that the market and monetary prices are relied upon for the allocation and accounting of the means of production and the products that are created from them.
Just like in capitalist economy, profit can be generated from the means of production in a social economy. However, the profit is offered as remuneration for employees or used in financing public institutions, instead of benefiting private owners. Socialism is geared towards the benefit of the society at large and not a few select individuals.
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