Briefly explain important characteristics of socialist economy
Following are the main characteristics of socialism
- Public Ownership
- Planned Economy
- Classes of Society
- State is responsible for basic necessities of life
- Equal Opportunity to all
- Non-existence of competition and limited choice of consumer products
- Pricing Mechanism
It has the public ownership of all the means of production and distribution. This is also known as collective ownership whereby all means are owned, controlled and regulated by the state. In socialist economic system the basic motive of government is not profit but to get targeted objectives.
State is responsible to plan all the economic activities like production, exchange, distribution and consumption which have great importance in socialism. Since the laws to demand and supply do not operate in this system, the country is more likely to incur speedy economic growth and since the state is solely responsible for the distribution of wealth, the society as a whole prospers.
In a capitalist economic system there are different living standards like upper, middle and lower class. Structure of capitalist society is determined through financial and economic position of members. However in a true socialist society everyone is equal as far as economic status is concerned.