Socialism is an economic and political system based on collective, common, or public ownership of the means of production. This means that property and resources are owned in common or by the state. Socialists believe in production for use, rather than for profit, and an equitable distribution of wealth and material resources among all people. They also believe in no more competitive buying and selling in the market and free access to goods and services. Socialism contrasts with capitalism, which is based on private ownership and the maximizing of profits.
Socialist economic thinkers consider many private economic activities to be irrational, such as arbitrage or leverage, because they do not create immediate consumption or use. Socialism includes the collective ownership of the means of production, central planning of the economy, and the emphasis on equality and economic security with the goal of reducing class distinctions.
Most modern nations dont believe in toppling the current capitalistic order but rather instituting socialist practices. Socialism has also been demonstrated through a cooperative system in which each member of the society owns a share of communal resources. Under market socialism, the production process is under the control of ordinary workers.
Socialism does not reward entrepreneurial ventures or competitiveness. Consequently, a socialistic system does not encourage innovation as much as capitalism. Capitalism and socialism differ based on their rational underpinning, implied or stated goals, as well as the framework of ownership and the production process.
