This was largely due to the income inequalities and other social issues that cropped up as consequences of industrialization. The excesses and abuses that resulted from capitalism and liberal individualism in these economies led to the rise of socialism. This economic and political system is characterized by collective or common ownership.

Under the socialist system, there’s public ownership of the means of production. They include factories, machinery, and tools that are used for producing goods with the aim of satisfying people’s needs. It is the government that takes all the legal decisions related to production and distribution in a purely socialist economy. The common people rely on the state for fulfilling their needs, right from food to healthcare.

It is the government that takes decisions on matters related to output and prices of goods and services. Socialism aims to ensure central planning and shared ownership of resources. The intention is to achieve equality in the distribution of goods and services for the society’s benefit. The major features of socialism are detailed below:

1. State plans the economic activities

The laws of demand and supply don’t operate in a socialist economic system. This makes it possible for a socialist country to enjoy speedy economic growth. Besides, the responsibility of distributing wealth is solely of the state, the society prospers as a whole. The state plans all the economic activities such as production, distribution, exchange, and consumption under a socialist economy.

2. Government ownership

Many would also like to describe this as public ownership or collective ownership. Under socialism, the ownership of all the means of production and distribution lies with the state. Here, the basic motive of the government is to meet its objectives of equal wealth distribution and public welfare. The state owns, controls, and regulates all the economic activities under the socialist economic system.

3. Non-existence of classes

In a pure socialist society, everyone is equal with regards to economic status. There’s no upper, middle, and lower classes under socialism unlike a capitalist economic system. As far as capitalism is concerned, the financial positions of individuals determine the country’s social structure.

4. State meets the basic needs of people

The basic needs of people in modern times are food, clothing, shelter, health, education, and employment. In a socialist economic system, these six basic needs are the responsibility of the state. So, the government meets all these basic needs of the public without any form of discrimination.

5. Absence of competition and limited choices in consumer products

Competition doesn’t exist in a socialist economy. This is because the government has total control over the production and distribution of goods and services. If you’re living in a socialist country, you’ll have limited choices in consumer products. As a socialist economy focuses only on life’s necessities, mostly the essential items are available as consumer products.

6. Equal opportunities for every individual

Socialism aims to provide equal opportunities to every individual who has the required abilities. It gives importance to the skills and talents of an individual and they also determine his or her success. The duties of individuals automatically protect their economic rights. Thus, socialism meets the basic needs of all individuals and ensures that no one suffers from deprivation.

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Socialism also focused more on the betterment of working class, and common ownership of key productive resources. Very few among socialism’s adherents of today understand its true meaning. Besides, there are many who completely reject the ideology citing the historical examples of failed socialist economies.

Nevertheless, there are some countries that call themselves socialist and have been quite successful in recent times. Here are some of the top socialist countries in the world today:

1. China

One can’t forget the great famine of China that caused the death of millions. Despite this, socialism eventually won in this country. This happened when Deng Xiaoping came to power in the late 1970s. He was instrumental in introducing a Chinese-style socialism. During his rule, the farmers could sell the crops they grew. The country’s enterprising individuals were able to start their own business.

Foreign companies were given permission to invest in the Chinese economy. Many criticized that these things were not in line with China’s ideals of socialism and communism. However, Deng Xiaoping was able to convince most of them that he was right in his actions.

2. Cuba

Socialism was declared as ‘irrevocable’ in the referendum of 2002 in Cuba. The first referendum happened in 1976. It approved the Cuban constitution enshrining the socialist system. Many from the local population see the Cuban Communist Party as the vanguard of the nation. It works towards organizing and directing common efforts. All of these efforts aim towards achieving the country’s objectives through socialism.

The greater goal is to advance towards a strong communist society. This is why many consider Cuba as the greatest example of socialism in action. It is a socialist republic with the Cuban Communist Party as the only political force. The state employs most of the Cubans and gives them subsidized food, housing, and healthcare.

3. Vietnam

In Vietnam, the Communist Party allows markets to exist in the country. However, they must operate through enterprises with state ownership or under strict supervision of the state. Thus, Vietnam is, in a way, a market economy with a socialist orientation. Although the country has been officially communist, it had to adopt capitalist elements.

This was for building the economic infrastructure for enhancing Vietnam’s wealth producing capabilities. In this process, private capital had the opportunity to grow. This was only to the extent in which the capital helped in developing the country.

4. Laos

It was only after the Soviet Union’s fall that this country began opening up to the world. The only disappointment is that Laos still remains poor and depends greatly on foreign aid. This is despite the economic reforms that were brought about in the country.

Until the mid-20th century, it was a French colony. The communist forces were instrumental in overthrowing its monarchy in the 1970s. Today, this socialist country controls its media, including the print media.

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There are many in the United States who question whether a socialist system would improve the existing conditions. The reason that they give is that socialism would help everyone in meeting the basic needs. It will prevent massive rewards going only to certain sections of the society.

Public ownership of resources

Under socialism, there’s no incentive given to anyone for managing things. This prevents certain ‘privileged’ individuals or organizations from pocketing additional revenues. The government decides how the resources would be managed. Every individual’s essential needs is taken care of and there’s public ownership of all resources.

Socialism gives state the right to own all sorts of businesses, means of production, and property. There’s no presence of private investors and stock market. So, there’s effective prevention of all the distortions that come with them.

Significant dominance of market forces

In capitalist economies, you need to pay for anything that you want. Theoretically speaking, it’s the market demand and supply that determine the price. Capitalism relies greatly on market forces. They call it ‘the invisible hand’. There’s a great dependence on market forces for allocation of resources.

Under the capitalist models, the government need not make plans for private enterprises. If an entrepreneur comes up with an idea, he or she can work towards putting it to practice. The entrepreneurs thus build their businesses based entirely on their plans and hard work.

If the business succeeds, it will give the business owner outsized rewards. Such rewards also act as a compensation for all the risks that the entrepreneur has taken. On the other hand, if the businesses fails, it is the business owner who bears the loss.

The existence of socialism in the United States

Currently, there’s a presence of certain socialist elements in the American system. The intention behind their inclusion is to enable the government to provide certain benefits for the citizens’ welfare. Let’s take the Social Security system as an example.

It makes payments to the American workers after the age of their retirement. The government gives back a certain amount of the taxes it has collected from them when they were working. When workers lose their jobs during situations like an economic downturn, the government pays them unemployment benefits.

The United States also has a healthcare system that the government manages. The United States government also provides other essential facilities, such as public education and national security. This makes the society function smoothly and much more efficiently.

Pure socialism might harm the United States

After the detailed discussions on capitalism and socialism, one can conclude that pure socialism is not for the United States. Socialism might sound like an ideal system in theory, but its practical application may be disastrous in the long run. You might be aware of countries that tried out pure socialism and failed miserably. One big example would be the Soviet Union.

It seemed that everyone was equal in the former U.S.S.R., but the reality was quite different. The nation suffered under the rule of corrupt politicians occupying the government’s top positions. Of course, capitalism hasn’t been able to ensure equal distribution of wealth in the United States. Despite this, the government has been successful to a great extent in providing certain facilities to the country’s citizens.

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Every individual in the society contributes according to his or her ability and receives the benefits in return. This motivates everyone to work hard and get fair rewards for the efforts that they put in. There are several benefits that make socialism an appealing system for many across the globe:

1. Need-based production

In the socialist economies, production depends on the basic needs of the people. This ensures that production benefits everyone in the country. This is not the case with capitalist economies. In capitalist countries, production is based on the purchasing power of a certain section of people. These are mostly the ones who enjoy great privileges.

As a result, you’ll see members of the elite living an ultra-luxurious life while the poor continue to live under terrible conditions. Socialism, if properly followed, can prevent such scenarios from happening.

2. Social justice

There’s a fair distribution of national wealth among people in a socialist economy. This is, perhaps, one of the biggest advantages of socialism. It provides equal opportunity to every individual and thus prevents exploitation. The advocates of socialism see it as a highly effective tool for elimination of economic inequalities. Socialism also ensures that everyone benefits from the fair share of national wealth.

3. Rapid economic growth

A central authority plans the use of resources in a socialist economy. The quick decision-making and optimum utilization of resources in these economies ensure minimal wastage. One of the greatest examples in this regard would be the Soviet Union in its early years.

Owing to its socialist approach the USSR made rapid development. In socialist economies, development can happen in a much more balanced manner. This can only be possible with effective economic planning. Under socialism, the focus of development is on all regions, including the backward ones.

4. Equitable distribution of wealth

As the socialist economies are committed to providing equal opportunities, there’s no exploitation. Wealth is distributed to the workers according to their contribution to the economy. This is unlike the capitalist economies, where a few members of the society amass vast fortunes.

They create wealth with the help of workers. The business owners keep a large portion of the profits and workers are paid only a small fraction of it.

5. Economic stability

Planning is of great importance in socialist countries, which leads to a more stable economy. There’s no private investment, which prevents economic fluctuations to a considerable extent. Capitalist economies often experience economic fluctuations.

Due to such upheavals, there are higher levels of unemployment and wastage of resources in these countries. So, it won’t be wrong to say that socialism minimizes the risk of economic instability.

6. Social welfare

A socialist state takes care of all the basic needs of its people. The state provides food, clothing, housing, healthcare, education, and employment to every individual. Let’s say you meet with an accident at work, the state will care and provide for your family. You won’t have to worry about anything while you’re recovering.

In such countries, people can work without any worries about their future. This makes them highly productive. In capitalist countries, you might be employed and yet your income might not be enough to get a house. You might even struggle to pay for healthcare.

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