Advantage and Disadvantages of Socialism: Socialism is one of the two economic systems that is most practiced in the world today. It has numerous advantages and that is why countries like China, Lao People’s Democratic Republic, Republic of Vietnam and even the Republic of Cuba practices it.
It should however be noted that Socialism is not without its disadvantages too. If this economic and political system was perfect I am sure the whole world would have chosen it. Consequently, in this article, we will be looking critically at the advantage and disadvantages of Socialism. This work will also give you a comprehensive knowledge of what socialism is all about. I therefore enjoin you to read carefully so that you won’t miss out any part of this article.
Socialism is an economic and political system which advocates that the means system of production should be owned and managed by the community or by a central authority. It is an ideology that evolved as a result of the inherent problems that abound in capitalism or free market economy. Such problems include, marginalization, inequality, unhealthy competition etc.
Because of these inherent problems, socialists started to advocate for an economy that would be in the hands of an experienced few who will be in charge, to ensure the fair management and equal distribution of the resources.
Origin of Socialism
The term socialism was formulated by sir. Henri de Saint-Simon, one of the founders of what was later called utopian socialism. Socialism finds its root in the Latin word “sociare”, which means to combine or to share. Simon contrasted it with the liberal doctrine of individualism, which emphasized the moral worth of the individual while stressing that people act or should act as if they are in isolation from one another. The early utopian socialists presented socialism as an alternative to liberal individualism based on the shared ownership of resources.
The first self-conscious socialist movements developed in the 1820s and 1830s. Fourierists, owenities, and saint –simonians provided series of analyses and interpretations of society. But most importantly, leaders in the movements called for a more equitable distribution of income and better living conditions for the working classes.
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Features of Socialism
1. Collective ownership:
In socialism, property and all the means of production are owned by the community and administered by the government for the general welfare of everyone in the society. In this system, the people look up to the government to provide for them, and everyone receives according to his or her needs
2. Lack of competition:
Unlike capitalism which supports lots of competitions because of the profit maximization policies, socialism does not encourage competition because, every major sector of the economy is in the hands of the government.
3. Defined objective:
Here, the economy operates within definite socio-economic goals. These purposes like full employment of satisfaction of communal demand, allocation of factors of production, distribution of national income, are always clear in the mind of the government and they try to actualize them.
4. Equality among the people:
In a socialist economy where the government provides for the masses, there are no rooms for individual amassing of wealth nor for class structure, because everybody receives free services and equitable income.
5. Price control:
In socialism, the forces of demand and supply do not control the prices of goods; rather, a central authority which is the government fixes the prices of goods & services thereby preventing exploitation.
Now that you have known the features of socialism, lets quickly look into the advantages and disadvantages of socialism as an economic and political theory. This is crux of this work.
ADVANTAGES OF SOCIALISM
Socialism has certain advantages that countries which practices it benefit.
One major reason why capitalism is criticized, and what led to the emergence of socialism is the fact that the masses are exploited and manipulated by the few rich. Thus, socialism handles the production and distribution of resources in such a way that the interest of everyone is accommodated; the central authority maximizes the resources to provide social amenities such as free education, medical services, etcetera.
2. The absence of monopolistic practices:
Due to the fact that the means of production are owned by the central authority and not private individuals, there is what is known as state monopoly as opposed to private monopoly. This state monopoly gives no room for competition and charging of higher prices for less qualitative products as is done in private monopolies because the state always has the interest of the citizens at heart.
3. Absence of business fluctuations:
Here, there is economic stability, because production and consumption of goods and services are regulated in accordance with the already stated objectives by the central authority. Thus, there is neither over nor under production.
4. Provision of employment:
Socialism also tackles unemployment in the sense that the central authority through the management of the means of production, makes profit that it uses in establishing schools, hospitals, and other parastatals that employ people to provide services.
DISADVANTAGES OF SOCIALISM
Everything that has advantages has disadvantages, and some of the disadvantages of socialism are:
1. Lack of innovation:
A socialist economy does not encourage competition and profit making which usually leads to innovativeness. Thus, it makes the economy stagnant with little or no improvement.
2. High levels of bureaucracy:
In situations where government manages every major sectors of production, there would be wastage of time and energy because, decisions will need to pass through many tables before it can be made, thus leading to setbacks.
4. It creates high tax burdens:
Due to the fact that the government provides everything for its citizens, they have to devise the means of getting revenue for their work and this in turn places the masses at the risk of paying higher taxes.
Socialism in most cases places the means of the production in the hands of the corrupt few. The central authority instead of utilizing the means of production for the benefit of everyone uses public resources for their individual pockets.
In conclusion, it has been argued that it is usually hard for only one economic system to be practiced; its practicability is only feasible in theory. Generally, it can be seen that most countries of the world practice mixed economy in the sense that some areas of the economy are placed into the hands of the citizens while the major areas are controlled by the government.