What is Socialism?

Socialism - this might be one of the most used and least understood words of the moment. Some people praise it, some fear it, others despise it. But how many can define it?

Could it be that one of the reasons why socialism is such a trigger word is that we are all thinking of different things when we use it? Tell me, when you think of socialism do you think of Denmark or Venezuela? Do you think of Stalin or Sanders? What about FDR?

The truth is, none of those answers are wrong. But neither of them offer the full picture either.

Lets start with the basics:

Socialism is both economic and political.

The most important thing to understand is that socialism is an economic system where the public owns the means of production - that’s it. Traditionally this means resources like the land, physical machinery and factories used to produce goods, but it can also include publicly owned companies (also referred to as State Owned Enterprises).

Social ownership can also mean the government takes a more active role in controlling the market, to varying degrees. If you think of a spectrum with extreme capitalism - a completely free, unregulated market- on one end, and communism - total state control and ownership over every aspect of economic life - on the other end, then socialism could be just about anything in between, depending on who you ask.

But, socialism is also a political philosophy - with various degrees of expression.

Revolutionary socialism emphasises the struggle between the working and ownership classes of society and calls for a revolutionary overthrow of the social order. The version you are more likely to hear about today is democratic socialism, which aims for reform rather than revolution, and supports ideas like universal access to public benefits such as health care and education as well as policies that protect workers.

For the most part, the revolutionary brand of socialism fell out of favor in the 20th century and today most nations are capitalist in some way. The central debate now is to what extent do we use socialist principles to regulate free markets? Let me give you an example: Social Security. When any of us start working and making money, a portion of our salary is withdrawn and deposited into a national social security fund. This money is invested so that the fund grows over time and, eventually, provides us with an income after we retire. Today, social security is a basic expectation from participating in the workforce, but when FDR first introduced it to Americans in the 1930s he was crucified by critics and accused of making America "socialist". Social security is a socialist principle - it is our money, in a fund managed by the government - but I think you’d have a hard time finding anyone who’d refer the US as a socialist country. This whole thing gets confusing because everyone has their own personal limits on what is an acceptable level of government involvement and what policy goes too far. Most American’s probably support free k-12 education, but people have differing views on whether or not college should be tax payer funded, for example.

So, the next time someone cries “socialist” press them to clarify what they mean. What is it about that particular politician or policy that makes it socialist? Do they view socialism as an ideology that is inherently good or evil, or do they understand it correctly as a spectrum of ideas?

Any productive conversation has to start with a basic understanding of what it is we are actually debating.