Paul studied Political Philosophy at Leicester University. Born and raised in the UK, he now lives in Florida, USA.
Back when I was first studying political philosophy, during the mid-1980's, the ideas associated with socialism were generally perceived to be on the wane.
However, since the 2008 economic crash, there has been a growing amount of interest. As well as concerns over the general stability of the capitalist economic system, there are also worries over the negative social effects of increasing wealth disparities.
This article gives a definition of socialism, and then looks at the main arguments that are used for and against socialism.
Socialism: Advantages and Disadvantages
Reduced wealth and earnings inequality
Greater rights for workers
Universal healthcare and education
Less consumer choice and individual freedom
A better regulated economy
Higher taxes and more government waste
Poverty and homelessness reduced or eliminated
Lack of innovation, especially in business sector
Better care for vulnerable groups, such as disabled and old people
Lower incentives and motivation
Greater achievement through a cooperative approach
Economic stagnation and other problems
Equal rights for ethnic minorities, women, LGBTQ
More labor disputes and less dynamic labor market
Definition of Socialism
The modern concept of socialism has been around since the nineteenth century. People generally define it in one of two ways:
- Firstly, as a way of organizing society in which the means of production (industry etc.) are commonly, or cooperatively controlled by everyone.
- Secondly, the term is sometimes used more generally to mean a political system that generates a more equal society with less divergence in wealth and income and with more equal power relationships between people such as workers and employers.
8 Advantages of Socialism
- Society is more equal in terms of wealth and earnings. Progressive taxes can be used to reduce income gaps between the richest and poorest and the money raised can also be used to create jobs and training for the poor and the unemployed.
- Workers and ordinary people have greater rights, giving them more control over their lives. Wealthier groups like bankers, on the other hand, are more strictly regulated.
- There is universal access to essential services like healthcare and education.
- A more controlled economy with less chance of the cycle of boom and bust that seems to always come with unregulated capitalism.
- Problems such as poverty and homelessness can be reduced or wiped out.
- Vulnerable groups such as the disabled, older people, and the long term sick are looked after better.
- More can be achieved by societies generally through co-operation, rather than competition.
- Equal rights for ethnic minorities, women, LGBTQ and increased human rights generally.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.
— Winston Churchill
8 Disadvantages of Socialism
- An increase in the power of the state and big government, who can end up controlling every aspect of people's lives, including workplaces and housing.
- More bureaucracy. Socialism often effectively means more and more political committees and groups to decide how things will be run. The system is slowed down or even stagnated, and special interest groups may dominate or distort with their agendas. Also without profits to be made, the incentive to make processes and services quick, efficient and relevant can disappear, leading to poorer goods and services for the public consumers.
- Less individuality and personal choice, especially in terms of products and services. State-controlled companies can be slow and inefficient when it comes to responding to consumer needs.
- Higher taxes for everyone and the subsequent increase in government spending means more waste and inefficiency.
- A lack of innovation. There is less, or no financial incentive for inventive people to develop new products and services, or for businessmen and entrepreneurs to set up new companies.
- Problems with low motivation. If someone’s life is comfy in an undemanding job, there is less incentive for them to seek to better themselves by working towards a more demanding but better paid job, or through them setting up their own business.
- Economic problems. Socialist economies often tend to be less dynamic and this can lead to stagnation. Alternatively, irresponsible public spending can lead to runaway inflation.
- Increased workers’ rights can lead to more labor disputes, spiraling wage increases that lead to high inflation, more unemployment because employers are less likely to hire, and ineffective workers being kept on in jobs, because it is difficult for employers to fire them.
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“The problem with socialism is that you eventually run out of other people's money.”
— Margaret Thatcher, British Conservative Party Leader
Socialism vs Communism: What's the Difference?
One difficult grey area that can cause confusion when looking at the pros and cons of Socialism concerns the difference between Socialism and Communism.
Although the distinction can sometimes be blurred and not helped by Marxist countries such as the old USSR labeling themselves as "Socialist", it is not true to say that the terms are completely interchangeable.
- "Communism" is better used to describe a one party political system where there is an aim of achieving absolute material equality and where state ownership of utilities, factories, and public institutions is pretty much complete.
- "Socialism" is better used to describe a mixed economy system where there is often only partial state ownership of utilities and manufacturing and while there is strong emphasis on the redistribution of wealth, private business and enterprises still exist.
A practical example of a key difference between Communism and Socialism might be found with trade unions. Under communist regimes, independent trade unions (i.e. those that are not under the control of the government) are usually effectively banned; whereas in socialist countries, trade unions often have a lot of power and operate independently from government.
Sources and Further Reading
- Zimbalist, Sherman and Brown, Andrew, Howard J. and Stuart (1988). Comparing Economic Systems: A Political-Economic Approach. Harcourt College Pub. ISBN 978-0-15-512403
- Socialism Britannica webpage (retrieved 12/26/2020)
- Bellamy, Richard (2003). The Cambridge History of Twentieth-Century Political Thought. Cambridge University Press. ISBN 978-0-521-56354-3
- How are Socialism and Communism Different? History.com (retrieved 12/26/2020)
- The Political Economy of Socialism, by Horvat, Branko
- Satyendra, Kush (2003), Encyclopaedic dictionary of political science, Sarup & Sons, ISBN 978-81-7890-071-1
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
Questions & Answers
Question: Why is socialism a better economic system?
Answer: Proponents argue that as well as being fairer, a socialist economy is more economically stable and less prone to the booms and busts of unrestrained free market capitalism. Higher levels of employment also lead to greater tax revenues. A bigger and stronger public sector can mean workers are getting better pensions, childcare, healthcare, and wages, all of which can contribute to a healthier economy. Planning means that an economy can be harnessed to maintain robust and vibrant communities, rather than just catering to the needs of corporation profits, which often has a negative social impact.
© 2011 Paul Goodman