An Introduction To Socialist Economics

What is socialist economics?

The term social means together or public or general. When studying economics it is a system of joint rights of the ways of production. The main focus is on equal opportunity and not on accomplishments in socialism. The workers / staff are valued on the basis of time and effort put in the work by them and not by the quantum and value of product produced. This makes people rely on the state for all necessities. The best example in present is of countries like Cuba, China and Vietnam that are working under socialist environment. Socialism talks about centralized planning and general ownership whereas capitalism on the other is all about private ownership, market based price system and profit-loss. Socialism advocates impartiality and offers security unlike capitalism where staff is exploited for profit of the elite. However socialism is criticized for its fundamental flawed principles, not considering human nature and disregards the part incentives play in an economy.

Economic models & systems

Within socialist economics five different models have been identified by socialists Robin Hahnel and Michael Albert which are discussed as follows: (a) Public Enterprise Centrally Planned Economy – according to this all properties are State owned and are the authority to make important economic decisions centrally. (b) Public Enterprise State Managed Market Economy – it is a market socialism where an effort is made in applying the price system in order to enhance the economic competence, however all fruitful properties remain State owned. (c) Mixed Economy – in this economic system both ownerships, private and general prevail in mix. It is a capitalist economy where market share over powers industrial planning. Democratic socialists advocate mixed economy. (d) Public Enterprise Employee Managed Market Economies – this again is market socialism where in the ownership is general but the production units are managed by employees so are the transactions. (e) Public Enterprise Participatory Planning – in this model ways of production are social where distribution is established on a combination of decentralized and democratic arrangement.

Socialism in practice

There are numerous economic systems prevailing with socialist characteristics however all the systems contain a huge portion of capitalism in it for example paid labor. History states that most parts of socialist economy have been put to practice or tested frequently. Attribute of both socialism and capitalism coexists in economies in past history. Good examples are existence of cooperative businesses and peer-t o-peer production of software in information technologies.

Transition to market economics

It was a transition with new reforms by few remaining States that practiced socialist economy. This was after when USSR was dissolved, strong transformations in ideas casted economies away from centralization. The course of transition is distinguished building up private enterprises, alteration in the functioning of the State which in turn builds new governmental organizations. In this the private owned businesses are encouraged along with self governed financial organizations and private markets. The real meaning of transition is complete reformation of state organizations in terms of their functions where the contributor in growth becomes a facilitator. There is a change in the growth and practice process during transition. This is them evaluated on two different modes that are micro and macro levels. However different countries implement different transition models from socialist economies to market economies suited best to their initial conditions.

Conclusion

We can say that capitalism and socialism coexists in an economy. Planned and market economies are founded upon their main mode of how the resources are distributed. In this paper we have tried to discuss the elements of socialist economies however more literature can be procured upon research.

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