Socialism

In a socialist economy, the state owns and controls the major means of production. In some socialist economic models, worker cooperatives own and operate the primary means of production. A worker cooperative is a firm that is owned and self-managed by its workers. Other socialist economic models allow individual ownership of enterprise and property, albeit with higher taxes and a higher degree of government controls.

The primary concern of the socialist model of economics is an equitable distribution of wealth An equitable distribution of wealth is meant to ensure that all members of a society have an equal opportunity to attain certain economic outcomes. To achieve this, the state intervenes in the labor market. In a socialist economy, the state is one of the primary employers. During times of economic hardship, the socialist state can order hiring, so there is close to full employment even if workers are not performing tasks that are particularly in demand from the market.

In addition to capitalism and socialism, the other major school of economic thought is communism. Many tenets of communism and socialism stand in opposition to capitalism, but there are important distinctions between socialism and communism .