Socialism Explained

Redefining Socialism: Bringing Hope Back to the Democratic ...

I have written several articles on postings related to politics. A list of links have been provided at bottom of this article for your convenience. This article will, however address different aspects on these political events.

Unless you’ve been living under a rock the last few years, you’ve likely noticed that “socialism” has become increasingly popular in the United States, particularly among young people.At the base level, socialism simply means strict government control over the economy. Think government-run health care, government mandated wage requirements, and more restrictions and regulations on private businesses. Oh yeah–one more thing. All this government control also means a lot more taxes to pay for it. Although socialism and its programs are pursued in the name of promoting equality, the outcome is devastating for everyone it touches. Socialism’s sky-high taxes, poor health care, choice restrictions, supply shortages, lackluster innovation and more government rules will shackle individual freedom. A socialist economic system requires collective (i.e. usually government), rather than private, ownership and/or control over the major inputs to the production process.Socialism dismantles the very mechanisms of our current free market system that promotes progress and economic advancement: competition and individual freedom.

While socialists preached equality, the reality was, as George Orwell put it in Animal Farm, that some animals were more equal than others in socialist countries. Orwell’s point? The political elite in truly socialistic countries fare much better than ordinary citizens. Historians long ago discovered Karl Marx’s idea of equality always gets subverted by people who really just want power and, therefore, inevitably organize authoritarian regimes. How could our fellow Americans, most of whom are intelligent, self-reliant, caring people, want a socialist economic system?

While no single definition encapsulates many types of socialism, social ownership is the one common element. Socialist systems are divided into non-market and market forms. Non-market socialism substitutes factor markets and money with integrated economic planning and engineering or technical criteria based on calculation performed in-kind, thereby producing a different economic mechanism that functions according to different economic laws and dynamics than those of capitalism. A non-market socialist system therefore eliminates. the inefficiencies and crises traditionally associated with capital accumulation and the profit system in capitalism. The socialist calculation debate, originated by the economic calculation problem, concerns the feasibility and methods of resource allocation for a planned socialist system. By contrast, market socialism retains the use of monetary prices, factor markets and in some cases the profit motive, with respect to the operation of socially owned enterprises and the allocation of capital goods between them. Profits generated by these firms would be controlled directly by the workforce of each firm or accrue to society at large in the form of a social dividend.

Socialist politics has been both internationalist and nationalist in orientation; organized through political parties and opposed to party politics; at times overlapping with trade unions and at other times independent and critical of them; and present in both industrialized and developing nations.[32] Social democracy originated within the socialist movement, supporting economic and social interventions to promote social justice. While retaining socialism as a long-term goal, since the post-war period it has come to embrace a Keynesian mixed economy within a predominantly developed capitalist market economy and liberal democratic polity that expands state intervention to include income redistributionregulation and a welfare stateEconomic democracy proposes a sort of market socialism, with more democratic control of companies, currencies, investments and natural resources.

The socialist political movement includes a set of political philosophies that originated in the revolutionary movements of the mid-to-late 18th century and out of concern for the social problems that were associated with capitalism. By the late 19th century, after the work of Karl Marx and his collaborator Friedrich Engels, socialism had come to signify opposition to capitalism and advocacy for a post-capitalist system based on some form of social ownership of the means of production. By the 1920’s, communism and social democracy had become the two dominant political tendencies within the international socialist movement, with socialism itself becoming the most influential secular movement of the 20th century. Socialist parties and ideas remain a political force with varying degrees of power and influence on all continents, heading national governments in many countries around the world. Today, many socialists have also adopted the causes of other social movements such as environmentalismfeminism and progressivism (sic).

In practice, there are varying degrees of government ownership and control, but this is the margin or key indicator that measures how socialist a country is. The greater the degree of government ownership and control, the more socialistic a country. By that standard, there are really only three countries in the world today that can accurately be labeled as socialist and they are all hell holes: North Korea, Cuba, and Venezuela.

Wait, what? No Nordic countries? Nope, because the Nordic countries are mostly capitalist. The vast bulk of their economic activity is based on private ownership and their citizens have a high level of economic freedom. Nordic countries do have high taxes and big welfare states which makes them less than perfectly capitalist. Those high taxes have consequences. It has slowed their rates of economic growth and made their booze extremely expensive. But, at least, private ownership (as opposed to state ownership) of the means of production doesn’t impoverish a country the way socialism does.

Venezuela: A Case Study in Making the Wrong Choice

Venezuela was once an extremely prosperous country. Then they gradually chose socialism over capitalism. Today Venezuela is in shambles. They made the wrong choice. In 2017, the country was facing dire food and medical shortages, frequent power outages, the world’s highest inflation rate, violent crime, serious political unrest and was in a declared state of emergency.

But only several years before, Venezuela was held up as an example of successful “democratic socialism” by many celebrities, social media sites, news publications and the like. In 1998 Hugo Chavez was democratically elected, in what international observers classified as a fair election, promising his version of “Bolivarian socialism.” Venezuela sits on the world’s largest proven oil reserves and, for a while, the government was able to sell oil on the international market and import enough stuff to make it appear to be prosperous. But there’s a difference between appearances and reality. The socialist policies were destroying the ability of Venezuelans to produce at home. When oil prices plummeted, the country was unable to feed itself. Even its beer producer, Polar, even had to cease beer production for lack of Barley. Venezuela’s democratic freedoms have vanished. Socialism requires centralized control over the economy. With that control comes the power to punish political rivals and undermine democratic opposition.

Nobel Prize winning economist F.A. Hayek long ago argued in his 1944 book The Road to Serfdom that it is impossible to maintain a large degree of democratic freedom without also maintaining a large degree of economic freedom. Simply put, that’s why all socialist economies soon become totalitarian dictatorships. Venezuela is the most recent to fall prey to the promise of an economic nirvana and a large degree of economic freedom only to plunge down the road to serfdom.

So not to overwhelm the reader, I have included a much more indepth analysis of Socialism in the Addendum. I briefly touched on communism in this article, I will discuss it much more indepth in separate article strictly on communism. So I will conclude this article with my take on socialism. I have never been one for a large government. We obviously need an infrastructure, and that cost money. We need roads, street lights, waste disposal and drinkable water to name a few. We also need to feel secure, both individually and as a country. That means police and a military to protect us from aggressors both inside and outside our country. We also need a justice system to settle disputes. And to control all that we need a governing party. The basic premise behind capitalism, is that economic competition drives it. The people are responsible for fulfilling most of their basic needs. While we do have access to public funded schools, we also have access to other alternatives. We pay a minimum of taxes just to cover the bare necessities discussed above. I like it this way. It works for us as a country. We have been doing it for over 200 years, while we have had problems, what society hasn’t, and we have worked through them. Our Constitution provides a solid foundation for our country. If people want another flavor of government go someplace else. Socialism, is frankly too much government. I don’t want to have 70% of my income taken out for taxes. I don’t believe that criminals and illegal aliens should get as much as hard working citizens do. I believe if you want to succeed in this country you need to work for it. So now you know where I stand on the subject. I hope you found this article informative.

Resources:, “Democratic Socialism: Straight Talk about Twisted Facts,” By Benjamin Powell;, “socialism;”, “What Is Socialism? And How Is It Different Than Democratic Socialism?” By Samantha Vicenty;, “Socialism and Its Characteristics: Pros, Cons, Examples, and Types,” By Kimberly Amadeo and Janet Berry-Johnson;, “What Is Democratic Socialism and Why Is It Growing More Popular in the U.S.?” By Samuel Arnold;, “The Meaning of “Socialism” to Americans Today,” By Frank Newport;, “What is Socialism;”


What is Democratic socialism?

Since the term is often misunderstood, it’s simplest to start with what Democratic socialism isn’t: It is not a political party. It’s also not completely interchangeable with the beliefs and practices of socialism. According to Mark A. Peterson, a professor of public policy, political science, and law at UCLA, Democratic socialism is “a call for the democratically-elected to use the public sector to promote greater equality and opportunity.” Those who identify as Democratic socialists believe in giving everyone the chance to find equal economic footing, and see free or low-cost health care, tuition-free public education, and universal child care as means to that end. “Democratic socialists believe that both the economy and society should be run democratically—to meet public needs, not to make profits for a few,” the Democratic Socialists of America (DSA) website states. The DSA stands for restructuring our government and the U.S. economy “so that ordinary Americans can participate in the many decisions that affect our lives.”

Merriam-Webster principally defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.” In short, that means that in a fully socialist country, the workers—be it in a factory, a corporation, etc.—all hold a share of ownership of whatever is being produced. This can mean that workers literally own shares of their company, or maybe they’re members of a board, sharing an equal say in decisions that affect every employee. In the ideal socialist scenario, all decisions are made for the good of all, with the members of society holding equal access to that nation’s resources and social services. “Collective” and “cooperative” are popular buzzwords within socialist circles for this reason. Socialism’s second dictionary definition, “a system of society or group living in which there is no private property,” is what alarms the segment of Americans who fear it means their hard-earned money and resources could be repossessed by the state. 

What democratic socialism isn’t

This definition of socialism as economic democracy will surprise many people. It is at odds with three popular but deeply mistaken ways of understanding modern democratic socialism. The first confuses democratic socialism with statism; it says that socialism just means state control of the economy, even if the state in question is profoundly undemocratic. This view regards dictatorships like the Soviet Union, Venezuela, and North Korea as socialist, precisely because they achieved total state control over the economy. But many would argue that these examples are not at all socialist; contemporary socialists believe that socialism requires robust political and economic democracy — the very antithesis of these authoritarian regimes. A second mistaken conception of democratic socialism conflates socialism with social democracy; it says that countries like Denmark and Sweden, which tax citizens heavily and spend generously on social programs like unemployment insurance, education, and health care, are socialist. (Arguably, this is the conception of socialism advanced by Bernie Sanders, who, when pressed to explain what he means by socialism, tends to refer to northern European countries with ample social spending supported by high levels of taxation.) But socialism isn’t, at root, about taxation or social spending; it’s about who controls the means of production. You can’t prove that a country is socialist by referring to its tax rate or unemployment benefits. A third mistaken conception of democratic socialism assumes that socialism must oppose not merely private ownership of the means of production, but also markets and profits. Under this conception, socialism seeks to replace market production for profit (e.g., Walmart makes socks in order to make money) with planned production for use (e.g., government planners tell the sock factory to make socks because people need them).

Is democratic socialism the same thing as social democracy?

Not quite, though democratic socialism’s most prominent advocates point to the latter’s success in other countries as proof that it could work in the United States. “Social democracy is typically associated with robust, tax-financed welfare states that provide a range of inclusive government programs to promote greater equality and opportunity,” Peterson explains. Those programs, he says, include universal health care, free or more financially-attainable education, child care, job training, and pensions. “Note that ‘welfare’ here means general social welfare in which all are included, not the ‘public assistance for the poor’ that’s associated with the word welfare in the U.S.,” says Peterson. Some social democracies pay for public health care and other programs with what’s called social insurance. Social insurance is, in some cases, tax-financed, meaning citizens in those countries may pay a tax rate Americans would consider high—but the counterargument is that they’re not paying out of pocket for private insurance and education. Other countries, like Germany, chiefly finance their public welfare programs through payroll contributions.

How does democratic socialism fit into capitalism?

Well, one certainly doesn’t cancel out the other. Many of the social democracies that Sanders and Ocasio-Cortez cite as inspiration for their economic plans—Sweden and Finland, for example—are thriving capitalist countries. “These are decidedly capitalist economies with private ownership of property, private corporations, and fairly large numbers of wealthy entrepreneurs and families.”

Socialism and Its Characteristics: Pros, Cons, Examples, and Types

What Is Socialism?

Socialism is an economic system in which the factors of production are valued in relationship to their usefulness to people. Socialists take into account both individual needs and greater social needs. They allocate resources using central planning, as in a command economy. 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.

  • Socialism is a system that shares economic output equally throughout the population.
  • It values the collective well-being of the community, rather than individuals.
  • The government distributes resources, giving it greater control over its citizens.
  • There are eight different kinds of socialism, each with their own priorities and economic styles.

Pros of Socialism

Under socialism, workers are no longer exploited because they own the means of production. Profits are spread equitably among all workers according to their individual contributions. But the cooperative system also provides for those who can’t work. It meets their basic needs for the good of the whole society. The system eliminates poverty. It provides equal 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 be done that no one wants, it offers higher compensation to make it worthwhile for people to take them. Natural resources are preserved for the good of the whole. 

Cons of Socialism

The biggest disadvantage of socialism is that it relies on the cooperative nature of humans to work. It ignores those within society who are competitive and focus on personal gain. Those people tend to seek ways to overthrow and disrupt society for their own benefit. Capitalism harnesses this “Greed is good” drive. Socialism pretends it doesn’t exist. As a result, socialism doesn’t reward people for being entrepreneurial. It struggles to be as innovative as a capitalistic society. A third disadvantage is that the government 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. 

Differences Between Socialism, Capitalism, Communism, and Fascism

Factors of production are owned by:EveryoneIndividualsEveryoneIndividuals
Factors of production are valued for:Usefulness to peopleProfitUsefulness to peopleNation building
Allocation decided by:Central planDemand and supplyCentral planCentral plan
From each according to their:AbilityMarket decidesAbilityValue to the nation
To each according to their:ContributionWealthNeedValue to the nation

What Is Your Understanding of the Term “Socialism”?

Sep 4-12Sep 3-8
Equality – equal standing for everybody, all equal in rights, equal in distribution2312
Government ownership or control, government ownership of utilities, everything controlled by the government, state control of business1734
Benefits and services – social services free, medicine for all102
Modified communism, communism66
Talking to people, being social, social media, getting along with people6
Restriction of freedom – people told what to do31
Liberal government – reform government, liberalism in politics21
Cooperative plan11
Derogatory opinions (non-specific)62
No opinion2336

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