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New Harmony, a model community presented by Robert Owen, 1838

Socialism is an economic system in which major industries are owned by workers rather than by private businesses. It is different from capitalism, where private actors, like business owners and shareholders, can own the means of production. The state can also act as a capitalist by owning the means of production and by directing the economy. Socialists believe that capitalists owning the means of production is a form of exploitation because it lets them own a majority of the labor that workers produce, even though the owners haven't done any work. By allowing capitalists to own a worker's labor, they can extract surplus value and generate profit. Socialists propose that workers themselves get to own and manage their labor.

Socialists believe that sharing ownership of the means of production equally among society would increase people's quality of life. Socialists want to give people free access to basic life necessities like food, housing, and healthcare. Some socialists also believe employment should be guaranteed as a human right. Socialists want to prevent problems that they believe come from unchecked capitalism, like poor treatment of workers and inequality. There are varying views among socialists as to how exactly the issues should be prevented. There are varying views among socialists as to how different issues should be approached. Most socialists would argue that capitalism, in its purest form, can inflict great harm.

There are lots of kinds of socialism. One big thing that splits socialists is how to make socialism happen. Reformists think people can get socialism by voting in elections and changing the government bit by bit. Revolutionaries believe that private owners are too powerful and will use their power to stop any reforms, so the only way to get socialism is to take their ownership by force.

Many groups have criticized socialism for a lot of different reasons. For example, some people think it goes against basic human nature, which they see as naturally greedy and competitive. Some are concerned about the amount of authoritarianism needed to implement socialist policies. They point to things like the lack of free speech in past or present socialist nations. And some think socialism will stifle innovation because people won't be able to profit from ownership of their inventions.

Forms of socialism

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There are many kinds of socialism. In all types, at least in principle, the state or workers own the means of production.[1] Means of production is originally a communist term which describes the tools that are needed to make goods. In a capitalist economy, these tools are normally owned by one person, and can range from a machine in a factory to an entire corporation. The one person hires workers for a wage, and keeps any profits made. The profit is not split up amongst the workers. This can create inequality as the owner of the mean of production may be able to become very wealthy.

The major differences between the different varieties are the role of the free market (market planning), how the means of production are controlled, the role of management of workers, and the government's role in the economy.


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One kind of socialism is "collectivization." In this system, money and goods are shared more equally among the people. In theory, this system results in the gap between classes getting smaller. The state helps the nation's poorest people. The richest are subjected to higher taxes and economic restrictions.

Communism as a goal

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Socialists with more radical views believe that socialism will evolve into what they see as a more advanced system: communism, with no state, money, hierarchy or social classes whatsoever. In Marxist theory, socialism is a temporary social state between capitalism and communism. Some socialists have no intention of transitioning to communism.

Many label these economic theories into one as "communism" when they mean the Marxist and Leninist ideas and beliefs of Russia's Bolshevik party. Marx believed that capitalism followed the economic and political system of feudalism. He also believed that capitalism would unfairly treat many people. He thought that those people would eventually revolt and switch to socialism. He thought that socialism could be another bridge on a path to communism. However, many people incorrectly use the term "Communist" to refer to a socialist state as a pejorative insult. Others call this 'State Socialism,' to distinguish it from the communist goal that does not need a state or any form of government. To non-communists, the word 'socialism' is now used mostly for attempts to come close to this goal in a capitalist state.

Democratic socialism

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Democratic socialism is the belief that socialism can be achieved through reform of what Marxists call Bourgeois Democracy[2]―as opposed to achieving socialism by a revolution. The goals of these reforms are aimed to achieve a more just society, so that ordinary people can participate in the many decisions that affect their lives, which should require voting.

Social democracy

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Social democracy is a type of socialism that attempts to mix parts of socialism with capitalism. In this system, despite there still being private property, the government generates tax revenue. Tax comes from the wealthiest in the society and corporations. It goes to the poor, or even everyone in the society in the form of social programs. These programs range from single-payer healthcare, to other welfare programs such as expanding SNAP benefits. The intentions of social democracy and socialism can be similar or shared. Social democracy keeps the capitalist system intact, and tries to reform it. Achieving socialism would mean completely getting rid of the capitalist system. Social democracy is often confused with democratic socialism due to the similar names and having the same short-term goals. The biggest difference is social democrats want to stop reforming capitalism when they think their reforms are good enough, but democratic socialists will not stop until capitalism is gone. Some examples of social democracies are the Scandinavian countries.

In social democracies, some services and industries are given subsidy money to help them run partly controlled by the government. Education, health care, housing, utility companies and public transportation are some industries that might be owned/supported by the government in a social democracy. For the most part, people working in these industries are paid by the government, with money paid by the people as taxes. A strong Welfare system is key to social democracy.

Utopian socialism

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Utopian socialism is the first form of modern socialism. Unlike other forms of socialism, utopian socialism doesn't include belief in the necessity of class struggle.


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Anarcho-socialism, also called anarchist socialism, libertarian socialism or free socialism is the idea of a socialist society where the state does not exist. Anarcho-socialists believe that both the state and the bourgeois class (the class that owns the means of production in capitalism) oppresses the workers and a stateless mutual aid society should be established through a revolution. Mutual aid is the belief that people in a community (for example city districts or towns and villages) should help each other when necessary.

Anarcho-socialism is very similar to anarcho-communism, and many anarcho-socialists are anarcho-communists

Many people and countries see socialism differently. The Socialist International is an organization dedicated to the cause of promoting socialist ideals, and has ties with many socialist parties, especially Social Democratic parties.

Map of Socialist and Communist Countries during the Cold War in 1985

The followers of a Welshman, Robert Owen, began calling themselves socialists in 1841.[3] Owen is seen as a founder of the Co-operative Movement in Britain. He said that workers should own the companies they worked for. The workers would then share the profits among themselves. He set up a new model factory in New Lanark, Scotland.[4]

Karl Marx is the most well-known creator of the theory of socialism, and of communism. He wrote a book about capitalism, socialism, and communism, called "A critique of the social economy". Friedrich Engels co-wrote the book, and paid for much of Marx's work and research.

Many socialist political parties were formed during the 19th century and early part of the 20th century. During the decolonization movement in the 20th century, many armies fighting for independence planned to establish socialist countries.

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  1. Lamb, Peter & J.C. Docherty. 2006. Historical dictionary of socialism. Lanham, Maryland, UK; Oxford, England, UK: Scarecrow Press. p. 1.
  2. "On Authority". www.marxists.org. Retrieved 2023-02-15.
  3. Gale (2001). "Socialism" . World of Sociology. Retrieved 15 June 2011.
  4. "Socialism". Encyclopedia of World Trade From Ancient Times to the Present. 2005. Retrieved 15 June 2011.