Socialism is a political theory. It is also an economic theory. This structure advocates for production, distribution, and other economic exchanges to be owned or regulated as a whole by a community. If employed as a government structure, Socialism would have all businesses owned by the government, have all property owned by the government, and all resources owned by the government.
Then the government would distribute those resources throughout the population so that basic needs could be met.
Socialism is often confused with Communism, but the two structures are very different. Socialism encourages the democratic ownership and distribution of society’s means of production, attempting to balance the scales so the poor have access to the same resources as the rich.
Here is a Socialism pros and cons list to take a look at the various potential benefits and challenges that this structure provides.
List of the Pros of Socialism
1. It creates a system without classes.
How many different classes are in a capitalistic society? There is a wealthy class. There’s the Middle Class. There are the elites. In 2017, the Trump Administration even began referring to the “Educated” class. In Socialism, all of that goes away. Because it is a community-based system, equal opportunities are presented to everyone. It doesn’t matter how wealthy they are, what their skin color happens to be, or whatever other label might be used to create division. It strives for equality by any means necessary.
2. It eliminates the socioeconomic gaps.
Have you ever heard the phrase, “It takes money to make money?” In Socialism, the community takes over the governing of production units and distribution. These units are then presented to the workers. As distribution needs increase, work needs increase, and that allows profits to increase for everyone on an equal basis instead of a trickle-down basis from the top.
3. It creates balance.
Many of the disparities that are seen in society today come from communities that are out of balance. People with more wealth can access better healthcare options than those who are poor. Households with high annual incomes can eat better foods than households with low annual incomes. Socialism strives to reinforce the idea that everyone is created equally and deserves a community that with treat them with equality. This creates a greater balance between people within the same community.
4. It improves the standard of living.
Because resources are distributed in an equal fashion, there is no poverty in Socialism unless there are no resources to distribute. The goal is to raise the living standards for those who are struggling. It is true that this comes at the expense of those who are well-off, but is it truly ethical to be living in comfort and luxury when right down the street someone else is living in deplorable conditions?
5. It encourages skill enhancement.
People within Socialism are commodities because of their ability to work and produce. Each person can contribute their strengths to the betterment of the general society. That allows for more people to work, which encourages economic growth, with the goal of improving personal circumstances by promoting the community’s welfare first.
List of the Cons of Socialism
1. It has never been implemented in its true form.
The issue with Socialism is that implementing it as imagined is virtually impossible. Someone must supervise the distribution of resources, which means there is a lot of power and responsibility placed in that position. It is easy enough to manipulate the distribution lines to benefit a few at the expense of many. That is essentially how Communism works: having the people work to improve the government while being given only the basics for survival.
2. It can be easily manipulated.
The people in charge of distribution are not the only ones who can manipulate the structure of Socialism. The news can be manipulated to create certain political leanings. The law can be manipulated to prevent people from confronting corruption within the system. Each area of manipulation takes a person further away from having control over their own life and puts them into a position where they must defend it to keep it.
3. It creates a race to the bottom.
When implemented historically, those who have pursued Socialism have redistributed wealth in an attempt to create balance. That wealth never really makes it to those who are living in poverty. The primary criticism of Socialism is that it doesn’t improve living standards for the majority. It simply lowers the living standards of those who have means to have them come closer to living in poverty without raising the poor up.
4. It encourages worker incompetence.
In a perfect scenario, a community would utilize the natural skills and strengths of each worker, assigning them to the job that they are most capable of performing at high production levels. In reality, jobs are often assigned in a system of Socialism based on the greatest needs of the society. That means if there is a food shortage, you’re going to be a farmer, even if you kill everything you try to grow. This creates a level of professional incompetence in some industries that can be difficult to overcome.
5. It can reduce the workforce.
The bottom line for many critics of Socialism is this: that it encourages laziness. If a person knows that they will receive payments for food, housing, and clothing, then there is no incentive to keep working. They can collect the payments, have their basic needs met, and enjoy life without the worry of a work day. This can affect the morale of those who do work, since those who don’t work earn the same amount as those who do. That is why Socialism tends to negatively impact economic growth unless there is a requirement to work.
6. It limits innovation.
Under a system of Socialism, the goal is to meet the basic human needs first. Then the goal of satisfying the local economic demands is implemented. Only then, after these two areas of concern have been addressed, will trade with other communities be considered. Because of this structure, innovation is discouraged in Socialism because the work efforts are dedicated to distributing output for essential, self-survival purposes only. There is no incentive to innovate because there is no guarantee of success, which Socialism demands.
Socialism is a planned economy that can be implemented with several variations. At its core, however, it is a structure that wishes to satisfy human needs, meet economic demands, and create true equality. It may not be a top-down structure, but it can easily be turned into that type of format, which is why there is such a hesitation to implement this type of community structure.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.