Socialism and It’s Part in Economics
Some people have heard of socialism, but maybe don’t truly know what it means. Better yet, what exactly it has to do with economics. Well, socialism is an economic system in which everyone in society equally owns the factors of production. Socialism is usually in place under a democratically-elected government. The factors that make up production are entrepreneurship, labor, natural resources and capital goods.
Under socialism, they believe everyone in society receives a share of the production, based on how much they have contributed to it. Which they believe will, in turn, motivate those who want to receive more.
The workers receive their share after a set amount is deducted from what is called the common good. Such as care for those who are unable to contribute such as elderly, children and caretakers. As well as other things such as education, emergency services, defense, transportation and other things.
The Advantages of Socialism
Exploitation will no longer be a problem in the workplace. Since everyone has ownership in production. The all the profits are shared equitably among workers based on the amount of their contribution. The system realizes that those who cannot contribute still are entitled to have their basic needs met. It is needed for the good of the whole.
That would mean there would be no such thing as poverty, it would no longer exist. Everyone would have access to the healthcare and the education it needs. Taking out any discrimination issues as well, because no one would be discriminated against.
Everyone works at doing what they enjoy and are best at. Which in the long run benefits everyone all around? Jobs that is harder to find people to want to do, will pay higher to make those jobs worth doing. Natural resources are protected for the good of the whole as well.
The Disadvantages of Socialism
Even something that may sound so perfect for some, does have its disadvantages. Nothing is perfect, so now let’s go over some of those disadvantages. The biggest one being the whole system relies on the belief that humans can work together as a cooperative unit. Here is the problem with that, as we all know we are not all create equal. So, we do not all think or do the same things. So those that don’t want to fall into place into that type of society will cause disrupt.
It is just the way society is because everyone is different. So, it could cause problems with those that are highly competitive. Since they don’t see why they shouldn’t come out ahead of everyone else. Some also think that a socialist system would not reward the entrepreneurs. Since capitalistic society rewards for being competitive. Which will make a socialist economic society less innovative.
Another disadvantage believed by many is that the government that represents the masses causes a problem. In the fact that they may abuse the position and try to claim power themselves.
Countries Where Socialism Is Incorporated
There is not one country that can claim they are completely socialist. There are some that have mixed economies. Such as a mix of socialism and capitalism, socialism and communism or socialism and both.
The ones that do have the strongest socialist systems are Sweden, Denmark, and Norway. They provide healthcare, education, and pensions. When it comes to the wealth though that is still successfully capitalistic. Since a majority of the wealth is held by the top 10% of the people of the nation.
Why does this mix work in these countries? Probably because a majority of the people believe the government provides great quality of life and they have no interest in becoming the wealthiest. Which would make sense to many, not everyone wants to be at the top. Yet they should still be entitle to some of the basic things in life such as healthcare, education and something to retire on for all the years of working.
Then you have countries that have a mix of socialism and communism. Those are China, Cuba, Russia, North Korea and Vietnam. Some places say they are only socialist in their constitutions but economies are still run by the government. Then you have those that have a strong aspect government meaning everything is control by the government.
Ireland, Great Britain, Netherlands, France, New Zealand and Belgium have a high level of social support and strong socialist parties. While most businesses remain private, making them capitalist.
The Different Branches of Socialism
There are different types of socialism, actually, 8 to be exact. Each one differs as to how they think capitalism can be turning into socialism. They all focus on their own aspects of socialism.
You have the Democratic Socialism aspect. Which is where factors of production are handled by the Democratic run government. The central planning handles common goods. The free market is then allow to distribute consumer goods.
Revolutionary, which will only happen after capitalism has been completely destroyed. Factors of production would be owned by workers. As well as managed by them as well through central planning.
Libertarian, once structures of capitalism are remove they rely on the assumption that society will be looking for a socialist society that will take care of it all. Since it would be a self-interest situation.
The market, workers would own production. Then the workers would decide how to distribute between each other. Any excess would then be offer on the free market or could be turn over to society as a whole.
Green, an economy that values maintaining natural resources. Achieving it through ownership of the large corporations. It also highly promotes locally sourced food and use of public transportation. They would make sure people would have their basics but would shy away from things they really don’t need.
Christian, believe in teachings of brotherhood are the same expression by socialism. Utopian, a vision of equality without a set plan on making that happen. Last but not least there is the Fabian. It was a British organization in the late 1900’s stated a gradual change by several means over time would be the best.
Conclusion
Hopefully, this has given you an insight on socialism. Whether you are for it or against it, it is at least a better understanding of what it is. As well as how it relates to economics. So next time you hear it come up, you will be able to understand what the conversation is about.
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