Socialism can be defined as a social, political and economic system in which the state owns and controls the means of production, exchange and distribution of goods and services. The main aim of socialism is to ensure equal distribution of the nation’s wealth. The state, acting on behalf of the people is seen as impartial and can adequately control all productive and distributive activities in the state. This theory originated as a protest against the evils of capitalism. Karl Marx, a German (1818-1883) propounded this theory.
Russia was the first country to embrace socialism. Other countries that at one time or the other practised this system include: China, Romania, Poland etc. In Africa, Tanzania, Ethiopia etc also practised socialism.
Features or characteristics of Socialism
- Means of production: There is the state ownership and control of the means of production.
- Nation’s wealth: Equal distribution of nation’s wealth is maintained.
- Employment: There is gainful employment for all citizens.
- Free education and free medical services: Free medical services and free education are provided for all citizens.
- One sole party: There is the existence of only one political party.
- Uniformity in price: Prices of all state produced goods and services are uniform.
- Competition: Competition in the areas of production and price is absent.
- Private enterprise: Individuals are not allowed to engage in the production and distribution of goods and services.
- Production: Production is mainly embarked upon to satisfy the needs of the people and not for profit.
- Prevention of waste: There is one central planning economic system.
Merits of Socialism
- Job security: There is no fear of undue loss of job, since it is the government that creates jobs and employs all.
- Industrial harmony: There is industrial harmony because the conditions of service of workers are uniformly determined by the state.
- Exploitation: The tendency to exploit is eliminated in the system.
- Welfare: The welfare of the people is adequately taken care of by the state (government).
- Issue of class: There is no class distinction in the system. In fact, such act is highly discouraged.
- Unity: People are brought together under one central authority. It gives the people a sense of belonging.
- Resources: Resources are equitably distributed among the citizens.
- Unhealthy rivalry: There is no unhealthy rivalry in the area of production. The state is only involved.
Demerits of Socialism
- No competition: The absence of competition has virtually affected the quality of goods produced. Most of the goods are of low quality.
- Control of the economy: The government controls all aspects of the economy. It does not give room for personal initiatives.
- The economy may not grow fast: The reason is that individuals are not allowed to take part in running the economy on a large scale.
- Absence of choice: Since almost all goods are produced by the government, the consumer may have no alternative in the choice of goods.
- Division of labour: Socialism does not encourage division of labour and specialization.
- Creativity: The sense of creativity is out of question in the life of an individual, since the state does not encourage such.
- Dictatorship: Most socialist states are one-party states and can possibly become oppressive and dictatorial.
- Economic development: Economic development is very low.
- Inefficiency: As the state alone monopolises the means of production of goods and services, it can lead to inefficiency.
- Monopoly: In socialism the state gains control of means of production, and this reduces competition among entrepreneurs.