Central to the meaning of socialism is common ownership. This means the resources of the nation owned in common by the entire global population.
Socialism is an economic system in which the means of production are owned and managed by the State. Ownership of means of production is not allowed. People can have personal property which is transferable and inheritable. In socialism economic activities are carried on mainly for social gains and personal interest is of less significance.
In this economic system the anti-social activities like smuggling and hoarding find no place. Economic activities are planned with the motive of social benefit by a central planning authority.
The individuals in socialistic society surrender their economic freedom in exchange of assurance of freedom from wants by the State. It is the responsibility of the State to provide food, lodging and clothing besides other requirements, by assigning a suitable job to each one of them.
The ideology of socialism developed from the notion that capitalism creates inequality in society. Under capitalism, socialists argue, the wealthy few who own and control the resources and means of production are able to exploit the working masses. These elite capitalists can pay workers less than the value that they contribute, so the capitalists can keep larger profits for themselves to accumulate even greater wealth. The result, socialists say, is a society in which the wealthy are able to oppress the middle and lower classes.
Characters of Socialism
- In socialism means of production are owned by the State
- Economic activities are planned by the central planning authority
- Absence of competition
- Equal opportunities to all
- No economic freedom to the people
Merits of Socialism
- Social Benefit. Over production and concentration of wealth in the hands of few does not exist. Everyone is guaranteed of the basic requirements of life.
- Rational Allocation of Resources. There is always a rational allocation of available resources to meet various ends, well-adjusted to the national requirements.
- Full Employment of Manpower. Each one gets a job according to his ability. In socialistic economy everyone has to work and contribute to the national output.
- Absence of Anti-Social Activities. Personal gain in socialistic economy ceases to exist so anti-social activities like adulteration; hoarding and smuggling are not here.
Demerits of Socialism
- Loss of economic freedom
- Lack of incentive to work hard in socialism
- Compulsion and coercion in socialism
- It is against the human nature