What Type of Economic System Does Socialism Advocate?

Socialism advocates an economic system based on common or state ownership of industry.

Socialism seeks to replace what it considers the exploitation and inequality of capitalism with an economic system based on public or worker ownership of the means of production, including land and capital goods.

Identification

In contrast to capitalism, which is based on free enterprise and private ownership of the means of production, such as land and capital, socialism favors what it calls common ownership of these resources.

Theories/Speculation

Socialists contend that the capitalist economic system concentrates a disproportionate share of wealth into the hands of a small elite that exploits the larger working classes, by whose labor such wealth is created.

Prevention/Solution

Socialism advocates replacing the capitalist system with what it considers a democratic economic system based on public or common ownership of the means of production.

Significance

Socialism's advocacy of common ownership of the means of production often takes the form of state ownership of industries.

Types

Pure socialism favors public or worker ownership of the economy's means of production. Social democracy seeks a compromise between capitalism and socialism by advocating state ownership of certain industries, such as health care, transportation and utilities.

Features

Besides public or worker control of industry, a socialist economic system favors equalization of incomes and supports organized labor.

References

• World Socialist Party: Declaration of Principles

Resources

• Socialist International
• Democratic Socialists of America