Introduction

Socialism is an economic and political philosophy encompassing diverse economic and social systems characterized by social ownership of the means of production, as opposed to private ownership. It describes the economic, political, and social theories and movements associated with the implementation of such systems. Social ownership can take various forms, including public, community, collective, cooperative, or employee. As one of the main ideologies on the political spectrum, socialism is the standard left-wing ideology in most countries. Types of socialism vary based on the role of markets and planning in resource allocation, and the structure of management in organizations.

Socialist systems are divided into non-market and market forms. A non-market socialist system seeks to eliminate the perceived inefficiencies, irrationalities, unpredictability, and crises that socialists traditionally associate with capital accumulation and the profit system. Market socialism retains the use of monetary prices, factor markets and sometimes the profit motive. As a political force, socialist parties and ideas exercise varying degrees of power and influence, heading national governments in several countries. Socialist politics have been internationalist and nationalist; organised through political parties and opposed to party politics; at times overlapping with trade unions and other times independent and critical of them, and present in industrialised and developing nations. Social democracy originated within the socialist movement, supporting economic and social interventions to promote social justice. While retaining socialism as a long-term goal, in the post-war period social democracy embraced a mixed economy based on Keynesianism within a predominantly developed capitalist market economy and liberal democratic polity that expands state intervention to include income redistribution, regulation, and a welfare state.

The socialist political movement includes political philosophies that originated in the revolutionary movements of the mid-to-late 18th century and out of concern for the social problems that socialists associated with capitalism. By the late 19th century, after the work of Karl Marx and his collaborator Friedrich Engels, socialism had come to signify anti-capitalism and advocacy for a post-capitalist system based on some form of social ownership of the means of production. By the early 1920s, communism and social democracy had become the two dominant political tendencies within the international socialist movement, with socialism itself becoming the most influential secular movement of the 20th century. Many socialists also adopted the causes of other social movements, such as feminism, environmentalism, and progressivism.

The term socialism is understood and defined in various ways by different thinkers and schools of thought. C.E.M. Joad, in Introduction to Modern Political Theory (1924), observed that socialism varies with the temperaments of its advocates and the abuses prompting its advocacy. Joad famously compared socialism to a hat that has lost its shape because everyone wears it. This metaphor highlights the difficulty in pinning down a clear definition, as its meaning often changes depending on the user and context.

Many works on socialism have evaded the problem of defining it precisely, but a working definition is necessary to understand its applications. The Oxford English Dictionary defines socialism as a theory or policy advocating the ownership or control of the means of production—such as capital, land, and property—by the community, and their administration in the interests of all. This highlights both the method and goal of socialism but is not comprehensive.

A more detailed definition is provided by Joseph A. Schumpeter in Capitalism, Socialism and Democracy (1942). He describes socialism as the organization of society in which the means of production are controlled by public authority, which makes decisions on production and distribution instead of private firms. Many other definitions align with this view, emphasizing public control and social welfare over private profit.

In essence, socialism refers to an economic system where the major instruments of social production are owned and controlled by public authority to ensure they serve the public interest. It is based on the idea that liberty and equality in the political sphere are meaningless without a reorganization of economic life to make these substantive rights for citizens.

The varieties of socialism differ mainly in their answers to how socialism can be established in society. Understanding these distinctions helps clarify the true character of socialism and its diverse manifestations in political and economic thought.

Core Concepts of Socialism

Socialism is a concept that has its roots in the socio-economic doctrine. The term was coined by Saint Simon in early 19th century in the West. Although the attributes attached to socialism such as social cooperation, upliftment of the weaker sections in a society, struggle for social justice and so on, existed prior to 19th century but scholars argue that the current understanding of the term socialism evolved in the 19th century only. Generally, the term socialism is used in two different yet interdependent ways. One is that socialism denotes values, ethics and other principles of this sort of imagination. Socialism in this sense is characterised by the ideas of liberty, equality, fraternity, social justice, classlessness, cooperation, abundance, peace and so on (See: Narayan, 1936). Second is that it signifies the practical aspects of socio-political institutions that also symbolize the socialist principles. Socialism at the level of institutions contrasts the capitalist mode of economy by marking a shift from the capitalist modes of ownership and control of the production to the public or collective ownership of the production system. This shift which is based on the notions of social justice and equality has grabbed the attention of socialists as well as others involved in the welfarist activities but these two notions do not alone represent socialism. There are a variety of meanings attached to the term socialism however, in this unit, we will focus on socialism in terms of its economic aspects and the welfare of human beings.

Before we move ahead to discuss the allied issues of socialism, the need is to understand socialism through the definitions offered by various social science scholars from time to time. Narayan (1934) defined socialism as the ‘system of social reconstruction’. For him, socialism means reorganizing economic and social life through the process of socialization. This involves reorganization of the means of production and promoting collective means of ownership thus abolishing the private ownership. Russel (1938) defined socialism as ‘the advocacy of communal ownership of land and capital’. By communal ownership is meant the democratic mode of ownership by the state which is for the common interest of all. M.K. Gandhi (1951), socialism as a society in which ‘members of society are equal, none low, none high’. All the definitions offered thus focuses on who benefits, the nature of control and the ideas of equality. Socialism generally means the production of goods to fulfil the needs of people and not for trade to obtain profit which is an attribute of capitalism. Thus there is also a transition from competition to cooperation. Through this transition, the disparities that existed among various people in a given society are eliminated and people are provided with equal opportunities.