Socialism - in theory and in practice

 
Socialism - ( in theory ) an economic system based on individuals' good will toward others, not on their own self-interest; in principle, society decides what, how, and for whom to produce.

In theory, socialism is an economic system that tries to organize society in the same way as most families are organized, trying to see that individuals get what they need. Socialism tries to take other people's needs into account and adjust people's own wants in accordance with what's available. In socialist economies, individuals are urged to look out for the other person; if individuals' inherent goodness won't make them consider the general good, government will make them.

Socialism in practice. However the economic systems based upon people's goodwill have tended to break down. This is certainly true of the major countries that tried socialism starting in the 1900s. In practice socialist governments had to take a strong role in guiding the economy. Socialism became an economic system based on the government ownership of the means of production, with an economic activity governed by the central planning. Soviet-style socialism - an economics system that uses administrative control or central planning to solve the coordination problems: what , how, and for whom.

Capitalism's and Soviet-style Socialism Solutions to the Three Economic problems.

Central economic problem Capitalism's solution Soviet-style socialism's solution. What to produce? What firms believe people want and will make the firm profit. What central planners believe socially beneficial. How to produce? Businesspeople decide how to produce efficiently, guided by their desire to make profit. Central planners decide, guided by what they believe is good for the country (ideally ) For whom to produce? Distribution according to ability and inherited wealth Distribution according to individual's need (as determined by central planners)

I received a very interesting letter from Gwenael Delaine and I think it should be mentioned here:

"However, I find that your description of socialism is a bit restrictive to "Hard Core" socialism, as it was applied in the ex-USSR, or in other countries. However, there are many social democracies in the world, in particular in Western Europe that have worked and still work very well. The term commonly used is, I believe, "social democracies with free market economies".

In those cases, socialism is the belief that the market forces alone will not ensure equality and equity among the citizens, and thus, the government must play a role in redistributing the revenues. In countries like France, Germany, Sweden, etc. the government does not own the means of production, but tries however to guarantee the basic services (water, electricity, health care) are given to everybody, despite their income or background. Those "Socialist" countries do work. In France, for example, although the government can oscillate between right wing and left wing, the premises and the basic services (social security, health care, education) are still guaranteed by the government. This does not mean, of course, that those services are government monopolies. If someone wants private education, they can have it.

Socialism, I believe, can be very different than the model found in the ex-USSR, and can work, even in a free market economy, which is why I find your definition a bit restrictive."

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