Socialism refers to various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with a method of compensation based on the amount of labor expended.[1][2][3]

Most socialists share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximise their potentialities and does not utilise technology and resources to their maximum potential nor in the interests of the public.

Friedrich Engels, one of the founders of modern socialist theory, advocated the creation of a society that allows for the widespread application of modern technology to rationalise economic activity by eliminating the anarchy in production of capitalism.[4][5] This would allow for wealth and power to be distributed based on the amount of work expended in production, although there is disagreement among socialists over how and to what extent this could be achieved.

Socialism is not a concrete philosophy of fixed doctrine and programme; its branches advocate a degree of social interventionism and economic rationalisation (usually in the form of economic planning), sometimes opposing each other. A dividing feature of the socialist movement is the split between reformists and revolutionaries on how a socialist economy should be established. Some socialists advocate complete nationalisation of the means of production, distribution, and exchange; others advocate state control of capital within the framework of a market economy.

Socialists inspired by the Soviet model of economic development have advocated the creation of centrally planned economies directed by a state that owns all the means of production. Others, including Yugoslavian, Hungarian, German and Chinese Communists in the 1970s and 1980s, instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production).[6] Social democrats propose selective nationalisation of key national industries in mixed economies, while maintaining private ownership of capital and private business enterprise. Social democrats also promote tax-funded welfare programs and regulation of markets. Many social democrats, particularly in European welfare states, refer to themselves as socialists, introducing a degree of ambiguity to the understanding of what the term means. Libertarian socialism (including social anarchism and libertarian Marxism) rejects state control and ownership of the economy altogether and advocates direct collective ownership of the means of production via co-operative workers' councils and workplace democracy.

Modern socialism originated in the late 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private ownership on society. The utopian socialists, including Robert Owen (1771–1858), tried to found self-sustaining communes by secession from a capitalist society. Henri de Saint Simon (1760–1825), the first individual to coin the term socialisme, was the original thinker who advocated technocracy and industrial planning.[7] The first socialists predicted a world improved by harnessing technology and combining it with better social organisation, and many contemporary socialists share this belief. Early socialist thinkers tended to favour an authentic meritocracy combined with rational social planning, while many modern socialists have a more egalitarian approach.

Vladimir Lenin, perhaps influenced by Marx's ideas of "lower" and "upper" stages of socialism[8], and certainly by Hegel's concept of thesis vs antithesis leading to a synthesis, later used the word "socialism" as a transitional stage between capitalism and communism.[citation needed]


The English word socialism (1839) derives from the French socialisme (1832), the mainstream introduction of which usage is attributed, in France, to Pierre Leroux.[9] and to Marie Roch Louis Reybaud; and in Britain to Robert Owen in 1827, father of the cooperative movement.[10][11] Although socialist models and ideas espousing common ownership have existed since antiquity with the classical Greek philosophers Plato and Aristotle[12], the modern concept of socialism evolved in response to the development of industrial capitalism.

The first advocates of socialism favoured social levelling in order to create a meritocratic or technocratic society based upon individual talent. Count Henri de Saint-Simon is regarded as the first individual to coin the term socialism.[13] Simon was fascinated by the enormous potential of science and technology and advocated a socialist society that would eliminate the disorderly aspects of capitalism and would be based upon equal opportunities.[14] He advocated the creation of a society in which each person was ranked according to his or her capacities and rewarded according to his or her work.[15]

This was accompanied by a desire to implement a rationally-organised economy based on planning and geared towards large-scale scientific and material progress,[16] and thus embodied a desire for a more directed or planned economy. Other early socialist thinkers, such as Thomas Hodgkin and Charles Hall, based their ideas off of David Ricardo's economic theories and reasoned that the equilibrium value of commodities approximated producer prices when those commodities were in elastic supply, and that these producer prices corresponded to the embodied labor. The Ricardian socialists viewed profit, interest and rent as deductions from this exchange-value.[17]

West European social critics, including Robert Owen, Charles Fourier, Pierre-Joseph Proudhon, Louis Blanc, Charles Hall and Saint-Simon, were the first modern socialists who criticised the excessive poverty and inequality of the Industrial Revolution. They advocated reform, with some such as Robert Owen advocating the transformation of society to small communities without private property.

Linguistically, the contemporary connotation of the words socialism and communism accorded with the adherents' and opponents' cultural attitude towards religion. In Christian Europe, of the two, communism was believed the atheist way of life. In Protestant England, the word communism was too culturally and aurally close to the Roman Catholic communion rite, hence English atheists denoted themselves socialists.[18]

In 1847, Friedrich Engels said "socialism was respectable on the continent, while communism was not." The Owenites in England and the Fourierists in France were considered socialists, while working-class movements that "proclaimed the necessity of total social change" denoted themselves communists. This latter branch of socialism was powerful enough to produce the communisms of Étienne Cabet in France and Wilhelm Weitling in Germany.[19]

Karl Marx

Karl Marx

The Marxist conception of socialism is that of a specific historical phase that will displace capitalism as a precursor to communism, the major characteristics being that in socialism the proletariat will control the means of production through the state apparatus; economic activity is still organised through the use of incentive systems and social classes would still exist but to a lesser extent than under capitalism.[20] For orthodox Marxists, socialism is the lower stage of communism based on the principle of "from each according to his ability, to each according to his work" while upper stage communism is based on the principle of "from each according to his ability, to each according to his need".

First InternationalEdit


Socialists made varying interpretations of The Communist Manifesto.

In 1864, the International Workingmen's Association (IWA)  – the First International  – was founded in London. Londoner Victor le Lubez, a French radical republican, invited Karl Marx to participate as a representative of German workers.[21] In 1865, the IWA had its preliminary conference, and its first congress, at Geneva, in 1866. Karl Marx was a member of the committee; he and Johann Georg Eccarius, a London tailor, were the two mainstays of the International, from its inception to its end; the First International was the premiere international forum promulgating socialism.

In 1869, under the influence of Marx and Engels, the Social Democratic Workers' Party of Germany was founded. In 1875, the SDW Party merged with the General German Workers' Association, of Ferdinand Lassalle, metamorphosing to the contemporary German Social Democratic Party (SPD). Since the 1870s, in Germany, Socialism was associated with trade unions, as the SPD constituted trade unions, while, in Austria, France, and other countries, socialist parties and anarchists did like-wise.

That ideologic development greatly contrasts with the British experience of Socialism, wherein politically-moderate New Model Unions dominated unionised labor from the mid–nineteenth century, and trade-unionism was stronger than the political labor movement, until appearance of the Labour Party in the early twentieth century. The first U.S. socialist party was founded in 1876, then metamorphosed to a Marxist party in 1890; the Socialist Labor Party exists today. An early leader of the Socialist Labor Party was Daniel De Leon, who had considerable influence beyond the United States as well.[citation needed].

The Swedish Social Democratic Party, (Template:Lang-sv, SAP, 'Social Democratic Labour Party of Sweden'), contests elections as 'Labour' Party – Social Democrats' (Arbetarepartiet-Socialdemokraterna), commonly referred to just as 'the Social Democrats' (Socialdemokraterna) or colloquially 'the Socials' (Sossarna); is the oldest and largest political party in Sweden. The party was founded in 1889. (In 1917, a schism occurred when the communists and other Revolutionary Left factions split from the Social Democrats to form what is now the Left Party).

Socialists supported and advocated many branches of Socialism – from the gradualism of trade unions to the radical revolution of Marx and Engels to the anarchists/libertarian socialists emphasising direct worker control and local power, all co-existing with the most influential Marxism and Social Democracy. The anarchists, led by the Mikhail Bakunin, believed Capitalism and State inseparable, neither can be abolished without abolishing the other.</font>

Second InternationalEdit

As the ideas of Marx and Engels gained popularity, especially in central Europe, socialists founded the Second International in 1889, the centennial of the French Revolution. Three hundred socialist and labor union organisations from 20 countries sent 384 delegates.[22] The Second International expelled member organisations that were on the left wing, most notably Swiss, Italian, and French anarcho-syndicalists such as Errico Malatesta and Mikhail Bakunin. This created a rift, lasting to this day in many parts of the world, between what anarchists describe as libertarian socialism and authoritarian socialism.

In 1890, The Social Democratic Party of Germany used the limited, universal, male suffrage to exercise the electoral strength necessary to compel rescission of Germany's Anti-Socialist Laws.[23] In 1893, the SPD received 1,787,000 votes, a quarter of the votes cast. Before the SPD published Engels's 1895 introduction to Karl Marx's Class Struggles in France 1848–1850, they deleted phrases that they felt were too revolutionary for mainstream readers.[24]

When World War I began in 1914, most European socialists supported the bellicose aims of their national governments. The British, French, Belgian, and German social democratic parties discarded their political commitments to proletarian internationalism and worker solidarity to co-operate with their imperial governments. In Russia, Vladimir Lenin denounced the Europeans' Great War as an imperialist conflict, and urged workers worldwide to use the war as occasion for proletarian revolution. The Second International dissolved during the war. However, Lenin, Leon Trotsky, Karl Liebknecht, Rosa Luxemburg and other anti-war Marxists conferred in the Zimmerwald Conference in September 1915.

Revolutions of 1917–1923Edit

Stalin Lenin jk

Vladimir Lenin (background) and Joseph Stalin.

By the year 1917, the patriotism propelling the First World War metamorphosed to political radicalism in most of Europe, the United States (cf. Socialism in the United States), and Australia. In February, popular revolution exploded in Russia when workers, soldiers, and peasants established soviets (councils) wielding executive power in a Provisional Government valid until convocation of a Constituent Assembly. In April, Lenin arrived in Russia from Switzerland, calling for "All power to the soviets." In October, his party (the Bolsheviks) won support of most soviets while he and Trotsky simultaneously led the October Revolution. On 25 January 1918, at the Petrograd Soviet, Lenin declared "Long live the world socialist revolution!"[25]

On 26 January, the day after assuming executive power, Lenin wrote Draft Regulations on Workers' Control, which granted workers control of businesses with more than five workers and office employees, and access to all books, documents, and stocks, and whose decisions were to be "binding upon the owners of the enterprises".[26] Immediately, the Bolshevik Government nationalised banks, most industry, and disavowed the national debts of the deposed Romanov royal régime; it governed via elected soviets; and it sued for peace and withdrew from the First World War. Despite that, the peasant Socialist-Revolutionary (SR) Party won the Constituent Assembly against the Bolshevik Party, who then acted resolutely the next day.[27]

The Constituent Assembly convened for 13 hours (16.00 hrs 5 Jan – 4.40 hrs 6 Jan 1918). Socialist-revolutionary leader Victor Chernov was elected President of a Russian republic and the next day, the Bolsheviks dissolved the Constituent Assembly.[28] The Bolshevik Russian Revolution of January 1918 engendered Communist parties worldwide, and their concomitant revolutions of 1917-23. Few Communists doubted that the Russian success of socialism depended upon successful, working-class socialist revolutions effected in developed capitalist-economy countries.[29][30] In 1919, Lenin and Trotsky organised the world's Communist parties into a new international association of workers – the Communist International, (Comintern), also denominated the Third International.

In November 1918, the German Revolution deposed the monarchy; as in Russia, the councils of workers and soldiers were comprised mostly of SPD and USPD (Independent Social Democrats) revolutionaries installed to office as the Weimar republic; the SPD were in power, led by Friedrich Ebert. In January 1919 the left-wing Spartacist uprising challenged the SPD government, and President Ebert ordered the army and Freikorps mercenaries to violently suppress the workers' and soldiers' councils. Communist leaders Karl Liebknecht and Rosa Luxemburg were captured and summarily executed. Also that year, in Bavaria, the Communist régime of Kurt Eisner was suppressed. In Hungary, Béla Kun briefly headed a Hungarian Communist government. Throughout, popular socialist revolutions in Vienna, Italy's northern industrial cities, the German Ruhr (1920) and Saxony (1923) all failed in spreading revolutionary socialism to Europe's advanced, capitalist countries.

In Russia in August 1918, assassin Fanya Kaplan shot Lenin in the neck, leaving him with wounds from which he never fully recovered. Earlier, in June, the Soviet government had implemented War Communism to manage the foreign economic boycott of Russia and invasions by Imperial Germany, Imperial Britain, the United States and France (interfering in the Russian Civil War beside royalist White Russians). Under war communism, private business was outlawed, strikers could be shot, the white collar classes were forced to work manually, and peasants could be forced to provide to workers in cities.

By 1920, as Red Army commander, Trotsky had mostly defeated the royalist White Armies. In 1921, War Communism was ended, and, under the New Economic Policy (NEP), private ownership was allowed for small and medium peasant enterprises; industry remained State-controlled, Lenin acknowledged that the NEP was a necessary capitalist measure for a country mostly unripe for socialism, thus the existence of NEP businessmen and NEP women (NEP Men) flourished and the Kulaks gained capitalist power as rich peasants.[31]

In 1923, on seeing the Soviet State's greatly coercive power, the dying Lenin said Russia had reverted to "a bourgeois tsarist machine... barely varnished with socialism."[32] After Lenin's death (January 1924), the Communist Party of the Soviet Union  – then controlled by Joseph Stalin  – rejected the theory that socialism could not be built solely in the Soviet Union, and declared the Socialism in One Country policy. Despite the marginal Left Opposition's demanding restoration of Soviet democracy, Stalin developed a bureaucratic, authoritarian government, that was condemned by democratic socialists, anarchists and Trotskyists for undermining the initial socialist ideals of the Bolshevik Russian Revolution.[33][34]

Inter-war era and World War IIEdit

The Russian Revolution of October 1917 brought about the definitive ideological division between Communists as denoted with a capital "С" on the one hand and other communist and socialist trends such as anarcho-communists and social democrats, on the other. The Left Opposition in the Soviet Union gave rise to Trotskyism which was to remain isolated and insignificant for another fifty years, except in Sri Lanka where Trotskyism gained the majority and the pro-Moscow wing was expelled from the Communist Party.

In 1922, the fourth congress of the Communist International took up the policy of the United Front, urging Communists to work with rank and file Social Democrats while remaining critical of their leaders, who they criticised for "betraying" the working class by supporting the war efforts of their respective capitalist classes. For their part, the social democrats pointed to the dislocation caused by revolution, and later, the growing authoritarianism of the Communist Parties. When the Communist Party of Great Britain applied to affiliate to the Labour Party in 1920 it was turned down.

After World War IIEdit

JStalin Secretary general CCCP 1942

Joseph Stalin

In 1945, the world’s three great powers met at the Yalta Conference to negotiate an amicable and stable peace. UK Prime Minister Winston Churchill joined USA President Franklin D. Roosevelt and Joseph Stalin, General Secretary of the Communist Party of the Soviet Union's Central Committee. With the relative decline of Britain compared to the two superpowers, the USA and the Soviet Union, however, many viewed the world as "bi-polar" – a world with two irreconcilable and antagonistic political and economic systems.

Many termed the Soviet Union "socialist", not least the Soviet Union itself, but also commonly in the USA, China, Eastern Europe, and many parts of the world where Communist Parties had gained a mass base. In addition, scholarly critics of the Soviet Union, such as economist Friedrich Hayek were commonly cited as critics of socialism. This view was not universally shared, particularly in Europe, and especially in Britain, where the Communist Party was very weak.

In 1951, British Health Minister Aneurin Bevan expressed the view that, "It is probably true that Western Europe would have gone socialist after the war if Soviet behaviour had not given it too grim a visage. Soviet Communism and Socialism are not yet sufficiently distinguished in many minds."[35]

In 1951, the Socialist International was re-founded by the European social democratic parties. It declared: "Communism has split the International Labour Movement and has set back the realisation of Socialism in many countries for decades... Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition. It has built up a rigid theology which is incompatible with the critical spirit of Marxism."[36]

The last quarter of the twentieth century marked a period of major crisis for Communists in the Soviet Union and the Eastern bloc, where the growing shortages of housing and consumer goods, combined with the lack of individual rights to assembly and speech, began to disillusion more and more Communist party members. With the rapid collapse of Communist party rule in the Soviet Union and Eastern Europe between 1989 and 1991, the Soviet version of socialism has effectively disappeared as a worldwide political force.

In the postwar years, socialism became increasingly influential throughout the so-called Third World. Countries in Africa, Asia, and Latin America frequently adopted socialist economic programmes. In many instances, these nations nationalised industries held by foreign owners. The Soviet Union had become a superpower through its adoption of a planned economy, albeit at enormous human cost. This achievement seemed hugely impressive from the outside, and convinced many nationalists in the former colonies, not necessarily communists or even socialists, of the virtues of state planning and state-guided models of social development. This was later to have important consequences in countries like China, India and Egypt, which tried to import some aspects of the Soviet model.

Social Democracy in powerEdit

Attlee BW cropped

Clement Attlee, U.K. Prime Minister, Labour Party government, 1945–51

In 1945, the British Labour Party, led by Clement Attlee, was elected to office based upon a radical, socialist programme. Social Democratic parties dominated the post-war French, Italian, Czechoslovakian, Belgian, Norwegian, and other, governments. In Sweden, the Social Democratic Party held power from 1936 to 1976 and then again from 1982 to 1991 and from 1994 to 2006. Labour parties governed Australia and New Zealand. In Germany, the Social Democrats lost in 1949. In Eastern Europe, the war-resistance unity, between 'Social Democrats and Communists, continued in the immediate postwar years, until Stalin imposed Communist régimes.

At first, Social Democracy held the view of having begun a serious assault against want, disease, ignorance, squalor, and idleness, the five "Giant Evils" afflicting the working class, identified by the British social reformer William Beveridge.[37] However, from the Labour Party's left wing, Aneurin Bevan, who had introduced the Labour Party’s National Health Service in 1948, criticised the Attlee Government for not progressing further, demanding that the "main streams of economic activity are brought under public direction" with economic planning, criticising the implementation of nationalisation for not empowering the workers, in the nationalised industries, with democratic control of operations.

In Place of Fear, the most widely read socialist book of the period, Bevan begins: "A young miner in a South Wales colliery, my concern was with one practical question: Where does the power lie in this particular state of Great Britain, and how can it be attained by the workers?" [38][39] The Frankfurt Declaration of the re-founded Socialist International stated:

1. From the nineteenth century onwards, Capitalism has developed immense productive forces. It has done so at the cost of excluding the great majority of citizens from influence over production. It put the rights of ownership before the rights of Man. It created a new class of wage-earners without property or social rights. It sharpened the struggle between the classes.
Although the world contains resources, which could be made to provide a decent life for everyone, Capitalism has been incapable of satisfying the elementary needs of the world’s population. It proved unable to function without devastating crises and mass unemployment. It produced social insecurity and glaring contrasts between rich and poor. It resorted to imperialist expansion and colonial exploitation, thus making conflicts, between nations and races, more bitter. In some countries, powerful capitalist groups helped the barbarism of the past to raise its head again in the form of Fascism and Nazism.| The Frankfurt Declaration 1951[36]

The post-war social democratic governments introduced social reform and wealth redistribution via state welfare and taxation. The new U.K. Labour Government effected the nationalisations of major public utilities such as mines, gas, coal, electricity, rail, iron, steel, and the Bank of England.[40] France claimed to be the world's most State-controlled, capitalist country.[41]

In the UK, the National Health Service provided free health care to all of the British population. Working-class housing was provided in council housing estates, and university education available via a school grant system. Ellen Wilkinson, Minister for Education, introduced free milk in schools, saying, in a 1946 Labor Party conference: Free milk will be provided in Hoxton and Shoreditch, in Eton and Harrow. What more social equality can you have than that? Clement Attlee's biographer says this contributed enormously to the defeat of childhood illnesses resulting from bad diet. Generations of poor children grew up stronger and healthier, because of this one, small, and inexpensive act of generosity, by the Attlee government.[42]

In 1956, Anthony Crosland said that 25 per cent of British industry was nationalised, and that public employees, including those in nationalised industries, constituted a like percentage of the country's total employed population.[43] Yet Labour did not seek ending capitalism; national outlook and dedication to the "post-war order" prevented nationalisation of the industrial commanding heights, as Lenin put it. In 1945, they were denominated socialist, but, in the UK, even when Labour were the parliamentary majority, The government had not the smallest intention of bringing in the ‘common ownership of the means of production, distribution, and exchange’ as written in Clause 4 of the Labour Party Constitution;[44] nevertheless, Crosland said Capitalism had ended: To the question, ‘Is this still capitalism?’, I would answer ‘No’.[45] In 1959, the German Social Democratic Party adopted the Godesberg Program, rejecting class struggle and Marxism.

In 1980, with the rise of conservative neoliberal politicians such as Ronald Reagan in the U.S., Margaret Thatcher in Britain and Brian Mulroney, in Canada, the Western, welfare state was attacked from within. As education secretary of the Conservative Government, 1970–1974, Margaret Thatcher abolished free milk for school children. Monetarists and neoliberalism attacked social welfare systems as impediments to private entrepreneurship at public expense.

In the 1980s and 1990s, western European socialists were pressured to reconcile their socialist economic programmes with a free-market-based communal European economy. In the UK, the Labour Party struggled much; Neil Kinnock made a passionate and public attack against the Party's Militant Tendency at a Labour Party conference, and repudiated the demands of the defeated striking miners after a year-long strike against pit closures. In the 1990s, released from the Left's progressive pressure, the Labour Party, under Tony Blair, posited policies based upon the free market economy to deliver public services via private contractors.

In 1989, at Stockholm, the 18th Congress of the Socialist International adopted a Declaration of Principles, saying that

Democratic socialism is an international movement for freedom, social justice, and solidarity. Its goal is to achieve a peaceful world where these basic values can be enhanced and where each individual can live a meaningful life with the full development of his or her personality and talents, and with the guarantee of human and civil rights in a democratic framework of society.[46]
The objectives of the Party of European Socialists, the European Parliament's socialist bloc, are "to pursue international aims in respect of the principles on which the European Union is based, namely principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law." Today, the rallying cry of the French Revolution  – "Egalité, Liberté, Fraternité"  – now constitute essential socialist values.[47]

In 1995, the British Labour Party revised its political aims: "The Labour Party is a democratic socialist party. It believes that, by the strength of our common endeavour we achieve more than we achieve alone, so as to create, for each of us, the means to realise our true potential, and, for all of us, a community in which power, wealth, and opportunity are in the hands of the many, not the few."[48] Cabinet minister Herbert Morrison said, "Socialism is what the Labour Government does."[44]

21st centuryEdit

Main article: Socialism of the 21st century

Hugo Chávez

In some Latin American countries, socialism has re-emerged in recent years, with an anti-imperialist stance, the rejection of the policies of neoliberalism, and the nationalisation or part nationalisation of oil production, land and other assets. Venezuelan President Hugo Chávez, Bolivian President Evo Morales, and Ecuadorian president Rafael Correa for instance, refer to their political programmes as socialist.

Chávez has coined the term "21st century socialism" (sometimes translated more literally as "Socialism of the 21st century"). After winning re-election in December 2006, President Chávez said, "Now more than ever, I am obliged to move Venezuela's path towards socialism."[49]

In the developing world, some elected socialist parties and communist parties remain prominent, particularly in India and Nepal. The Communist Party of Nepal in particular calls for multi-party democracy, social equality, and economic prosperity.[50] In China, the Chinese Communist Party has led a transition from the command economy of the Mao period to an economic program they term the socialist market economy or "socialism with Chinese characteristics."

Under Deng Xiaoping, the leadership of China embarked upon a programme of market-based reform that was more sweeping than had been Soviet leader Mikhail Gorbachev's perestroika program of the late 1980s. Deng's programme, however, maintained state ownership rights over land, state or cooperative ownership of much of the heavy industrial and manufacturing sectors and state influence in the banking and financial sectors.

In South Africa the ANC abandoned its partial socialist allegiances on taking power and followed a standard neoliberal route. But from 2005 through to 2007 the country was wracked by many thousands of protests from poor communities. One of these gave rise to a mass movement of shack dwellers, Abahlali baseMjondolo that, despite major police suppression, continues to advocate for popular people's planning and against the creation of a market economy in land and housing. Communist candidate Dimitris Christofias won a crucial presidential runoff in Cyprus, defeating his conservative rival with a majority of 53%.[51] The Left Party in Germany has also grown in popularity.[52]

African socialism continues to be a major ideology around the continent. The People's Republic of China, Cuba, North Korea, Laos and Vietnam are states remaining from the first wave of socialism in the 20th century. States with socialist economies have largely moved away from centralised economic planning in the 21st century, placing a greater emphasis on markets, in the case of the Chinese Socialist market economy and Vietnamese Socialist-oriented market economy, worker cooperatives as in Venezuela, and utilising state-owned corporate management models as opposed to modeling socialist enterprise off traditional management styles employed by government agencies. Social democratic in Western European countries have embraced third way policies, with some going so far as promoting privatisation and market liberalisation.


Economically, socialism denotes an economic system of state ownership and/or worker ownership of the means of production and distribution. In the economy of the Soviet Union, state ownership of the means of production was combined with central planning, in relation to which goods and services to make and provide, how they were to be produced, the quantities, and the sale prices.

Soviet economic planning was an alternative to allowing the market (supply and demand) to determine prices and production. During the Great Depression, many socialists considered Soviet-style planned economies the remedy to capitalism's inherent flaws – monopoly, business cycles, unemployment, unequally distributed wealth, and the economic exploitation of workers.

In the West, neoclassical liberal economists such as Friedrich Hayek and Milton Friedman said that socialist planned economies would fail, because planners could not have the business information inherent to a market economy (cf. economic calculation problem), nor would managers in Soviet-style socialist economies match the motivation of profit. Consequent to Soviet economic stagnation in the 1970s and 1980s, socialists began to accept parts of their critique. Polish economist Oskar Lange, an early proponent of market socialism, proposed a central planning board establishing prices and controls of investment. The prices of producer goods would be determined through trial and error. The prices of consumer goods would be determined by supply and demand, with the supply coming from state-owned firms that would set their prices equal to the marginal cost, as in perfectly competitive markets. The central planning board would distribute a "social dividend" to ensure reasonable income equality.[53]

In western Europe, particularly in the period after World War II, many socialist parties in government implemented what became known as mixed economies. In the biography of the 1945 UK Labour Party Prime Minister Clement Attlee, Francis Beckett states: "the government... wanted what would become known as a mixed economy".[54] Beckett also states that "Everyone called the 1945 government 'socialist'." These governments nationalised major and economically vital industries while permitting a free market to continue in the rest. These were most often monopolistic or infrastructural industries like mail, railways, power and other utilities. In some instances a number of small, competing and often relatively poorly financed companies in the same sector were nationalised to form one government monopoly for the purpose of competent management, of economic rescue (in the UK, British Leyland, Rolls Royce), or of competing on the world market.

Also in the UK, British Aerospace was a combination of major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders was a combination of the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, and Yarrow Shipbuilders Typically, this was achieved through compulsory purchase of the industry (i.e. with compensation). In the UK, the nationalisation of the coal mines in 1947 created a coal board charged with running the coal industry commercially so as to be able to meet the interest payable on the bonds which the former mine owners' shares had been converted into.[55][56]

Some socialists propose various decentralised, worker-managed economic systems. One such system is the cooperative economy, a largely free market economy in which workers manage the firms and democratically determine remuneration levels and labour divisions. Productive resources would be legally owned by the cooperative and rented to the workers, who would enjoy usufruct rights.[57]

Another, more recent, variant is participatory economics, wherein the economy is planned by decentralised councils of workers and consumers. Workers would be remunerated solely according to effort and sacrifice, so that those engaged in dangerous, uncomfortable, and strenuous work would receive the highest incomes and could thereby work less.[58]

Some Marxists and anarchy-communists also propose a worker-managed economy based on workers councils, however in anarchy-communism, workers are remunerated according to their needs (which are largely self-determined in an anarchy-communist system). Recently socialists have also been working with the technocracy movement to promote such concepts as energy accounting.[citation needed]

Social and political theoryEdit

"Socialism cannot exist without a change in consciousness resulting in a new fraternal attitude toward humanity, both at an individual level, within the societies where socialism is being built or has been built, and on a world scale, with regard to all peoples suffering from imperialist oppression."

Che Guevara, Marxist revolutionary, 1965 [59]

Marxist and non-Marxist social theorists agree that socialism developed in reaction to modern industrial capitalism, but disagree on the nature of their relationship. Émile Durkheim posits that socialism is rooted in the desire to bring the state closer to the realm of individual activity, in countering the anomie of a capitalist society. In socialism, Max Weber saw acceleration of the rationalisation started in capitalism. As a critic of socialism, he warned that placing the economy entirely in the state's bureaucratic control would result in an "iron cage of future bondage".

In the middle of the twentieth century, socialist intellectuals retained much influence in European philosophy; Eros and Civilisation (1955), by Herbert Marcuse, explicitly attempts to merge Marxism with Freudianism. The social science of structuralism much influenced the socialist New Left in the 1960s and the 1970s.


Main article: Criticisms of socialism

Criticisms of socialism range from claims that socialist economic and political models are inefficient or incompatible with civil liberties to condemnation of specific socialist states.

In the economic calculation debate, classical liberal Friedrich Hayek argued that a socialist command economy could not adequately transmit information about prices and productive quotas due to the lack of a price mechanism, and as a result it could not make rational economic decisions. Ludwig von Mises argued that a socialist economy was not possible at all, because of the impossibility of rational pricing of capital goods in a socialist economy since the state is the only owner of the capital goods. Hayek further argued that the social control over distribution of wealth and private property advocated by socialists cannot be achieved without reduced prosperity for the general populace, and a loss of political and economic freedoms.[60][61]

Hayek's views were echoed by Winston Churchill in an electoral broadcast prior to the British general election of 1945:

. . . a socialist policy is abhorrent to the British ideas of freedom. Socialism is inseparably interwoven with totalitarianism and the object worship of the state. It will prescribe for every one where they are to work, what they are to work at, where they may go and what they may say. Socialism is an attack on the right to breathe freely. No socialist system can be established without a political police. They would have to fall back on some form of Gestapo, no doubt very humanely directed in the first instance.[62]

See alsoEdit


  1. Newman, Michael. (2005) Socialism: A Very Short Introduction, Oxford University Press, ISBN 0-19-280431-6
  2. "Socialism". Oxford English Dictionary. "1. A theory or policy of social organisation which aims at or advocates the ownership and control of the means of production, capital, land, property, etc., by the community as a whole, and their administration or distribution in the interests of all. 2. A state of society in which things are held or used in common."
  3. "Socialism".Merriam-Webster Unabridged Dictionary
  4. Socialism: Utopian and Scientific at
  5. Frederick Engels. Socialism: Utopian and Scientific. p. 92-11. Chapter III: Historical Materialism
  6. "Market socialism," Dictionary of the Social Sciences. Craig Calhoun, ed. Oxford University Press 2002; and "Market socialism" The Concise Oxford Dictionary of Politics. Ed. Iain McLean and Alistair McMillan. Oxford University Press, 2003. See also Joseph Stiglitz, "Whither Socialism?" Cambridge, MA: MIT Press, 1995 for a recent analysis of the market socialism model of mid–20th century economists Oskar R. Lange, Abba P. Lerner, and Fred M. Taylor.
  8. Marx, Karl, Critique of the Gotha Program
  9. Leroux: socialism is “the doctrine which would not give up any of the principles of Liberty, Equality, Fraternity” of the French Revolution of 1789. "Individualism and socialism" (1834)
  10. Oxford English Dictionary, etymology of socialism
  11. Russell, Bertrand (1972). A History of Western Philosophy. Touchstone. p. 781
  18. Williams, Raymond (1976). Keywords: a vocabulary of culture and society. Fontana. ISBN 0006334792. 
  19. Engels, Frederick, Preface to the 1888 English Edition of the Communist Manifesto, p202. Penguin (2002)
  21. MIA: Encyclopaedia of Marxism: Glossary of Organisations, First International (International Workingmen’s Association), accessed 5 July 2007
  22. The Second (Socialist) International 1889–1923 accessed 12 July 2007
  23. Engels, 1895 Introduction to Marx's Class Struggles in France 1848–1850
  24. cf Footnote 449 in Marx Engels Collected Works on Engels' 1895 Introduction to Marx's Class Struggles in France 1848–1850
  25. Lenin, Meeting of the Petrograd Soviet of workers and soldiers' deputies 25 January 1918, Collected works, Vol 26, p239. Lawrence and Wishart, (1964)
  26. Lenin, Collected Works, Vol 26, pp. 264–5. Lawrence and Wishart (1964)
  27. Caplan, Brian. "Lenin and the First Communist Revolutions, IV" (HTML). George Mason University. Retrieved on 2008-02-14. 
  28. Payne, Robert; "The Life and Death of Lenin", Grafton: paperback pp. 425–440
  29. Bertil, Hessel, Introduction, Theses, Resolutions and Manifestos of the first four congresses of the Third International, pxiii, Ink Links (1980)
  30. "We have always proclaimed, and repeated, this elementary truth of Marxism, that the victory of socialism requires the joint efforts of workers in a number of advanced countries." Lenin, Sochineniya (Works), 5th ed. Vol. XLIV p. 418, Feb 1922. (Quoted by Mosche Lewin in Lenin's Last Struggle, p. 4. Pluto (1975))
  31. Soviet history: NEPmen
  32. Serge, Victor, From Lenin to Stalin, p. 55.
  33. Serge, Victor, From Lenin to Stalin, p. 52.
  34. Brinton, Maurice (1975). "The Bolsheviks and Workers' Control 1917–1921 : The State and Counter-revolution" (HTML). Solidarity. Retrieved on 2007-01-22. 
  35. Bevan, Aneurin, In Place of Fear, p 63, p91
  36. 36.0 36.1 The Frankfurt Declaration
  37. cf Beckett, Francis, Clem Attlee, Politico, 2007, p243. "Idleness" meant unemployment, and hence the starvation of the worker and his/her family. It was not then a pejorative term. Unemployment benefit, as well as national insurance and hence state pensions, were introduced by the 1945 Labour government.
  38. Crosland, Anthony, The Future of Socialism, p52
  39. Bevan, Aneurin, In Place of Fear p.50, pp.126–128, p.21 MacGibbon and Kee, second edition (1961)
  40. British Petroleum, privatised in 1987, was officially nationalised in 1951 per government archives [1] with further government intervention during the 1974–79 Labour Government, cf 'The New Commanding Height: Labor Party Policy on North Sea Oil and Gas, 1964–74' in Contemporary British History, Volume 16, Issue 1 Spring 2002 , pages 89–118. Elements of these entities already were in public hands. Later Labour re-nationalised steel (1967, British Steel) after Conservatives denationalised it, and nationalised car production (1976, British Leyland), [2]. In 1977, major aircraft companies and shipbuilding were nationalised
  41. The nationalised public utilities include CDF (Charbonnages de France), EDF (Électricité de France), GDF (Gaz de France), airlines (Air France), banks (Banque de France), and Renault (Régie Nationale des Usines Renault) [3].
  42. Beckett, Francis, Clem Attlee, p247. Politico's (2007)
  43. Crosland, Anthony, The Future of Socialism, pp.9, 89. Constable (2006)
  44. 44.0 44.1 Beckett, Francis, Clem Attlee, Politico, 2007, p243
  45. Crosland, Anthony, The Future of Socialism p46. Constable (2006)
  46. Socialist International - Progressive Politics For A Fairer World
  47. R Goodin and P Pettit (eds), A to contemporary political philosophy
  48. Labour Party Clause Four
  49. Many Venezuelans Uncertain About Chavez' '21st century Socialism' , Voice of America, Washington 9 July 2007. Accessed 12 July 2007
  50. Communist Party of Nepal'
  51. Christofias wins Cyprus presidency'
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  53. John Barkley Rosser and Marina V. Rosser, Comparative Economics in a Transforming World Economy (Cambridge, MA.: MIT Press, 2004).
  54. Beckett, Francis, Clem Attlee, (2007) Politico's.
  55. Socialist Party of Great Britain (1985) (PDF). The Strike Weapon: Lessons of the Miners’ Strike. London: Socialist Party of Great Britain. Retrieved on 2007-04-28. 
  56. Hardcastle, Edgar (1947). "The Nationalisation of the Railways". Socialist Standard (Socialist Party of Great Britain) 43 (1). Archived from the original. You must specify the date the archive was made using the |archivedate= parameter. Retrieved on 2007-04-28. 
  57. Vanek, Jaroslav, The Participatory Economy (Ithaca, NY.: Cornell University Press, 1971).
  58. Michael Albert and Robin Hahnel, The Political Economy of Participatory Economics (Princeton, NJ.: Princeton University Press, 1991).
  59. "At the Afro-Asian Conference in Algeria" speech by Che Guevara to the Second Economic Seminar of Afro-Asian Solidarity in Algiers, Algeria on February 24 1965
  60. Hayek, Friedrich (1994). The Road to Serfdom (50th anniversary ed.). University of Chicago Press. ISBN 0-226-32061-8. 
  61. Hans-Hermann Hoppe. A Theory of Socialism and Capitalism. Kluwer Academic Publishers. page 46 in PDF.
  62. Alan O. Ebenstein. Friedrich Hayek: A Biography. (2003). University of Chicago Press. ISBN 0226181502 p.137

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