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Socialism is an economic system controlled and regulated by a whole community. Each individual in the community equally participates in the factors of production. Socialism encourages democratic ownership and distribution of means of production to reduce the widening gap between the rich and the poor.
This article lists the pros and cons of socialism to help you understand its benefits and challenges it may bring.
Pros:
1. Classless system: Socialism creates a system without class; no wealthy class or middle class because a community-based system ensures equal opportunities are being presented to everyone.
2. Improves standards of living: Resources are equally distributed to all and this helps in boosting the standards of living of the poor people in the community.
3. Eliminate monopolies: In socialism, the society governs the prices and regulation of commodities to ensure everyone can access them. Suppliers cannot alter the prices of items.
4. Creates balance: Socialism focus on creating a balance between people in the community and ensure no disparities where the wealthy receive better health care or better food. It ensures everyone is treated equally.
5. Reduce threat of economic cycles: Democratic socialism eliminates the threat of economic cycle and this makes it possible for every individual to take care of his basic needs and access other opportunities.
6. Efficient economy: Democratic socialism ensures more resources are spent on production, innovation and wage growth instead of marketing. This ensures an individual’s needs are met without any rebranding.
7. Encourage skill enhancement: People within the community cooperate with each and contribute their ideas and strength in improving the community. This enables individuals to improve their capabilities and skills as they promote community welfare.
8. No exploitation: Workers own shares in production and profits are equally distributed among workers thus, no exploitation.
9. Value judgment: Socialism creates a room for value judgment. Products are offered in the society based on value instead of profits.
10. Preserve resources: It ensures natural resources are preserved for the benefit of all.
Cons:
1. Encourage work incompetence: In socialism, jobs are assigned based on the needs of the society instead of allocating jobs based on the level of specialization. This creates professional incompetence among the workers.
2. Easily manipulated: Socialism is a political system and people in charge of distribution can not only manipulate the structure but also information disseminated so as to benefit a few.
3. Not implemented in its true form: Socialism cannot be implemented entirely. Some powers and responsibility are given to few people to distribute resources to others. The distribution lines can be manipulated to benefit a few people to the expense of others.
4. Limits innovation: Socialism focus on satisfying human needs first then satisfy economic demands. This can limit innovation since efforts are dedicated to ensuring there are equal opportunities for all.
5. More government control: As the government focuses on the distribution of resources to ensure equality it can exercise amount of control to people by dictating what to purchase, where to work, and other controls.
6. Creates race to the bottom: Creating a balance may lead to a redistribution of resources to the minority thus doesn’t improve the living standards of the majority. This increases level of poverty.
7. Net financial loss: To promote equality high-income earners pay higher taxes to compare to low-income earners. This put a tax burden on some people relative to available income.
8. Reduces workforce: It encourages laziness among individual in the community. Equal distribution of resources creates an incentive for laziness. Individuals will not be compelled to work and those who work feel demotivated.
9. Increases government spending: There should be balance between domestic spending and foreign trade. Reduced innovation will force the government to import more and increase its spending. This creates economic deficit.
10. Less entrepreneurial opportunities: Due to lack of motivation incentive and reward for being entrepreneurial, individuals are not willing to establish entrepreneurial opportunities.
