Socialism and Centralized Planning

In socialist economies , important economic decisions are not left to the markets or decided by self-interested individuals. Instead, the government—which owns or controls much of the economy's resources—decides the whats, whens, and hows of production. This approach is also called "centralized planning."

Advocates of socialism argue that the shared ownership of resources and the impact of social planning allow for a more equal distribution of goods and services and a more fair society.

Both communism and socialism refer to left-wing schools of economic thought that oppose capitalism. However, socialism was around several decades before the release of the "Communist Manifesto," an influential 1848 pamphlet by Karl Marx and Friedrich Engels. Socialism is more permissive than pure Communism, which makes no allowances for private property.