View FREE Lessons!
Definition of Socialism:
is a government with varying degrees of common ownership and control of a nation’s most vital resources and enterprises; but private ownership of many businesses is also encouraged.
A country that relies on socialism will have common ownership and control of many of the nation’s most vital resources and enterprises, but the government encourages private ownership of many businesses. Socialist governments favor either a mixed or command economy. Socialists believe a capitalist system distributes power and wealth unfairly. In some socialist countries, the government uses revenue from very high taxes to redistribute income. In other places, the government believes common ownership of certain important industries best serves society. In these countries, the government owns and operates vital industries such as communications, utilities, and transportation.
There is a tremendous difference between socialist governments. The former Soviet Union was the Union of Soviet Socialist Republics. As the name of the USSR indicates, the government viewed itself as socialist even though it behaved more as a non-democratic command economy. Other countries practice democratic socialism. These countries are democracies that impose many government regulations and may operate some of the industries. For example, many people consider Denmark a democratic socialist government. Tax rates are very high, but they help pay for universal health care and a marvelous education system.
Dig Deeper With These Free Lessons:
Economics - Managing Our Scarce Resources
Supply and Demand - Consumers and Producers Reach Agreement