what is socialism? advantages and it’s features
SOCIALISM Definition of Socialism, also called centrally planned or controlled economic system, is defined as the type of system in which the means of production and distribution are collective; owned and controlled by the state (the government).
Companies and industries corporations that are responsible for production of goods and services required in the country are owned and controlled government.
The major aim of socialist economic is to produce goods and services for the general welfare of the citizen. Thus, profit maximization is not a feature of the socialist economic system
Socialist economic system has a restricted market.
It is a centrally planned economy which there is no private ownership of mea production.
In this system also, individuals or cit work collectively for the advancement of: country, while the government on the other hand caters for the citizens.
Goods and services produced are shared to individuals accord to their needs and their contributions to the advancement of the country.
But where pr individuals may want to produce goods services, they do so in trust and under very close and strict supervision by the state.
Examples of countries that operated socialist economic system in the past are the former Soviet Union China, Czechoslovakia, Romania, Poland; Bulgaria.
In Africa, they include Ethiopia, Angola Burkina Faso and Mozambique.
Features of Socialism
- Joint decision-making: A greater number of the citizens takes collective decision on what to produce, how to produce and for whom to produce.
- State ownership of means of production: All means of production and distribution are owned and controlled by the state.
- Non-market economy: Means of production are not purchased in the market and not all goods produced are meant for sale.
- Non-profit motive: The motive of socialist economic system is not to make profits.
- Promotion of welfare: The primary aim of socialism is to provide goods and services for the welfare of citizens.
(6) Equitable distribution of income: Income is equitably distributed to all citizens in the state.
(7) Absence of economic rivalry: Rivalry in a socialist economy is reduced to the minimum level as resources belong to the government.
(8) Non-price competition: Prices of commodities are fairly stable unlike price competition in a capitalist economy
(9) Optimum utilization of factors of production: The factors of production are optimally utilized to produce the desired goods and services.
(10) Freedom of choice: As a result of abundant goods and services provided, the consumers have a wide range of choice.
Advantages of Socialism
- Equitable distribution of resources: Resources within the state are equitably
distributed among the citizens.
- Absence of exploitation: There is always absence of exploitation since government provides all goods and services required by the citizens.
- Centrally planned market: Government takes decisions on goods and services produced and their markets. This makes it to be centrally controlled by the government.
- Choice of production: The consumers have a wide choice as to what to produce.
- Employment opportunity: Employment opportunities are readily available in a socialist economic system.
- Prevention of private monopoly: Private monopoly that exists in capitalist economy is prevented because means of production are controlled by the government.
- Economic security: Jobs and employment for the citizens are guaranteed and secured.
- Absence of economy rivalry: Economic rivalries among private individuals are absent in a socialist economy system.
- Provision of more goods: Goods and commodities are produced in large quantities for general citizenry.
- Equitable distribution of income: Since everybody in a socialist economy is gainfully employed, income is evenly distributed among the citizens.
Disadvantages of Socialism
Absence of alternative choice:
Consumers have no alternative choice of commodities produced. They must have to accept whatever is produced.
- It reduces individual initiative: Socialism reduces individual initiatives as the citizens depend solely on government for everything.
- It creates room for laziness: Since government provides everything for the people, it breeds laziness among citizens.
- It slows down economic development: As a result of the fact that government alone provides means of livelihood, it tends to reduce or slow down the pace of economic development.
- Lack of specialization: Socialism does not encourage division of labour and specialization
- Absence of competition: There is complete absence of competition in a socialist economy as all goods and services are provided by the government.
- It leads to state monopoly: It leads to state monopoly as the state provides all essential goods and services for the citizens
- Absence of creativity and innovation: Creativity and innovations in a socialist economic system are completely absent as citizens rely solely on government for all their needs.
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