Different types of socialism

Socialism is an economic and political ideology concerned with greater equality of distribution and proposing solutions which involve greater co-operation and social solutions. Socialism is often associated with the concept of state ownership of the means of production. The aim is to run industry in the interests of society rather than in the interests of a few property owners. However, there are many variants of socialism from the Command economy of State-Communism (e.g. Soviet Union) to libertarian socialism which advocates voluntary councils of workers taking responsibility for their local business.

Traditional economic theory is based on principles of individual ownership of property and a free market, where individuals and business are free to take actions to maximise their utility. From an economic perspective, this is considered to be a method which leads to an efficient allocation of resources. Different types of socialism all offer a critic of this free-market economy, arguing that it leads to inequality and abuse of monopoly power. Socialism is a challenge to this market economy.



This is a form of socialism that rejects the state, religion and ownership of property. It grew out of a philosophy of Mikhail Bakunin. Bakunin proposed that the means of production should be collectivised and workers paid according to their input. This is in contrast to Marxist Socialism which advocated a much greater role for the state in overseeing the means and products of labour.

Utopian socialism

Anarcho-socialism is a close relation to utopian socialism. In utopian socialism, adherents downplay the role of class warfare and argue people of all classes can voluntarily come together to promote socialist ideals of shared ownership and working for the common good. cooperative socialism. It is based on the work of Henri de Saint-Simon, Charles Fourier, and Robert Owen.

Utopian socialism is a type of ethical socialism which requires a certain ethics of those living in the community. Utopian socialism is a challenge to the conventional economic model of rational choice – the idea that individuals seek to maximise their individual utility. Under utopian socialism, it assumes that individuals will be able to put selfish ends to one side to consider the common good.

Aspects of Utopian-socialism

  • No state ownership of means of production
  • Advocates co-operation between owners and workers – rather than adversarial workers vs capitalist /trade unions
  • Local decentralisation of decision-making process.
  • Market forces harnessed but emphasis on considering common good rather than selfish ends


Under state communism (e.g. Marxist-Leninist) , the Communist State gains control over the means of production and decides – what to produce? How to produce? and for whom? Examples include the Soviet Union and Eastern European states. Under state communism, there is a high degree of centralisation with production targets set by central committees and local officials being responsible for meeting these targets. States with a Centrally planned economy have frequently involved considerable degrees of political control. In the 1930s and 40s, the Soviet Union had periods of rapid industrial expansion and economic growth. However, the system increasingly became bureaucratic, wasteful and lacking in incentives. Towards the end of the Soviet Union, the economic system was increasingly broken with major shortages of key goods and services.

Aspects of state communism

  • Political control/censorship
  • State ownership of all major industries
  • Production decided by central committees
  • Prices set by government committees
  • Limited or no role for private enterprise and free-market forces

Democratic socialism

Democratic socialism differs from state communism in that the state is not all-powerful, and the political system remains democratic. Democratic socialism is associated with the Socialist parties of western Europe. They generally propose a mixed economy – with state ownership of key industries, like coal, electricity, water and gas, but allow private enterprise to operate in the rest of the economy. Democratic socialism proposes a progressive tax system to redistribute wealth from the rich to the poor – through the provisions of a welfare state. Democratic socialism is often associated with the Nordic countries – where the government takes approximately 50% of GDP, but also there is a thriving market economy, giving a high standard of living.

Aspects of Democratic socialism

  • Advocates nationalisation of key industries (often the natural monopolies, like electricity, water)
  • Prices set by the market mechanism, except public goods, such as health and education.
  • Provision of a welfare state to provide income redistribution
  • Support for trade unions in wage bargaining
  • Use of minimum wages and universal income to raise low-income wages
  • Progressive tax and provision of public services. For example, marginal income tax rates of 70%. Tax on wealth

Social democratic socialism

Under social democratic socialism, there is a greater willingness to use market forces. For example, under social democracy, certain state-owned industries may be privatised because it is more efficient. But, then the tax system may be used to distribute high profits from the privatised companies. Social democracy is related to more right-wing socialist parties, such as the Labour Party under Tony Blair. For example, under Labour, the party didn’t renationalise privatised industries, but they did implement a ‘windfall tax’ on the privatised utilities who had made high profits.

Aspects of social democratic socialism

  • Greater willingness to harness market-forces
  • No commitment to nationalisation of industries.
  • Use of minimum wages and universal income to raise low-income wages
  • Socialist aims achieved through progressive tax and provision of public services

Libertarian socialism

Libertarian socialism rejects a powerful state involved in the management of the economy and labour market relations. Instead, it prefers local collectives voluntarily coming together to promote socialist values of co-operations.

Christian socialism

Christian socialism aims to provide an ethical background to socialism. It gives a Christian motive to redistribution and offering public services such as health and education. It also retains political and economic liberty and avoids the excess of Communism

Market Communism

e.g. China

  • The economy mixture of free-market enterprise and state control
  • Communist party is a one-party political state
  • e.g. China


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