The Ultimate Guide to Socialism: What is Socialism?

Socialism is a word that is thrown around an awful lot these days. Senator Bernie Sanders, Representative Alexandria Ocasio-Cortez, New York City Mayor Bill DeBlasio and many more prominent politicians have been described as socialists. Some, like Senator Sanders, will describe themselves with more nuance as “democratic socialists.”

Countries are sometimes described as socialist. Often, there is little in common between these countries despite being described as socialist. North Korea, Cuba and Venezuela are certainly socialist countries, but some would argue that Sweden and Denmark are as well.

 So what exactly is socialism? What are the core beliefs, and how are they applied in the modern world? One of the biggest problems in trying to craft an answer to this is that different groups and individuals may have very different definitions of exactly what socialism is.

Socialism and Capitalism and the Means of Production

One of the typical definitions of socialism is that the “means of economic production” is under the control of a democratic state. By contrast, capitalist economies generally place the means of production in the hands of private ownership. Largely due to the historical era in which these systems were defined, they often focus on the idea of a “factory owner.”

So, under a socialist system, a factory would be owned by the public. The workers get a share of the profits that the factory generates. By contrast, under a capitalist system, the factory is owned by a private individual. The individual pays a wage to the workers of the factory.

You might be asking, what is communism? Communism is certainly related to socialism, and is usually seen as the first step on the road to communism. The major difference is that communism is inextricably infused with the philosophy of Karl Marx, otherwise known as Marxism. Vladimiir Lenin is often described as a practitioner of Marxist socalism.

The Origins of Socialism

Socialism originated in opposition to capitalism. It’s not hard to understand why. In the 19th century, as technology revolutionized the manufacture of goods, large numbers of people transitioned from working in agriculture, to working in factories. Moral standards and class differences were very different than they are today. 

Often, factory owners would employ people to work in the factories for little pay over long hours. Working conditions were often dangerous. It was often easy to take advantage of the extreme poverty that people faced and pay them almost nothing. This continued well into the 20th century.

Here in America, one of the best examples of the dangers faced by workers was the Triangle Shirtwaist Factory Fire that took place in New York in 1911. 146 garment workers, mostly women, including 2 teenagers were killed when fire broke out in their factory. The doors of the factory were locked to prevent employees from taking breaks, those who weren’t burned or killed by smoke inhalation fell to their deaths after jumping out of the 9th floor window.

The poor conditions and low wages can be contrasted with factory owners who often lived lavish lives. They often seemed to care little about the fate of those who worked for them. 

The socialist movement gained strength in the wake of the 19th century Industrial Revolution. Early socialists like Robert Owen were factory owners themselves, and advocated for better conditions in theirs and other’s factories. Owen felt morally compelled to improve the condition of workers, and he hoped that doing so would make society more harmonious and healthy generally.

Shared Ownership

In a pure socialist system, any business would be state-owned. All decisions regarding the management of the business would be made by the government. The supposed benefit of this would be an egalitarian society where the needs of all individuals would be met. Some would work in the factory, some might work in the government, others in distributing goods, etc. 

It sounds like utopia, right? That’s no shock, since the famous 16th century work of Thomas More, “Utopia” certainly influenced early socialists, three hundred years later. What could possibly go wrong in a system like this? 

The benefit of state ownership heavily depends on the benevolence of the government itself. In order for the system to work and truly benefit everyone, you have to assume that the government will not favor one group over another. For example, imagine a government official who provides favorable treatment to the workers of a factory in his hometown.

Keep in mind that there are thousands of different Socialist philosophers. Some propose a complete, pure vision of complete state ownership and state provided meeting of human needs. Others have more nuanced views of maintaining some private ownership or private property in particular industries, or a free market subject to heavy regulation.

Providing for the Needs of Society

Because the state owns the means of production, it reaps the complete benefit of the economic activity those factories generate. It then has to redistribute those benefits to the populace in a completely egalitarian way to meet their needs.

In theory, every citizen of a socialist country is provided healthcare, without cost. They should have adequate food and shelter as well. Whether or not they actually are paid a wage depends on the specific definition of socialism you choose.

Again, this sounds totally utopian. No one is living in a lavish mansion feeling the warmth of a fireplace at the same time that a family huddles, homeless under the open sky in the rain. This of course depends on the actual ability and competence of the state to actually provide this housing.

Socialism: Freedom in Work

This is where things get interesting. Most socialist philosophy places a very high level of importance on the idea of freedom. When viewed in the historical context of the oppressed, impoverished factory worker this makes a great deal of sense. 

It could be fairly said that in a capitalist system, a worker isn’t really free. They may have extremely limited employment options, and are thus “wage slaves.” They could not take the job and starve, or take the job and live a meager life.

So, socialists would say they are making this individual free by providing for their needs and improving their conditions. We can then imagine the utopian result of workers happily going off to work, knowing they’ll return to a clean, safe house and a hot meal.

Many ask, what would happen in a socialist system if a person simply did not want to work. Would their needs still be provided for? There is no one answer to this question. Some socialists simply state that the desire to work is an innate human quality, so it just wouldn’t happen.

In a centrally planned and executed economy, there’s also the issue of the freedom to work in the fields that one wants to work in. The most efficient way to employ a national workforce is to apportion workers wherever they are needed. If agricultural workers are in short supply, then the next person entering the workforce should be sent to the farms. If tire factories are short on workers, then when your number is up, you’ll be sent there.

What if you’d rather teach school, or learn a different trade? Are you free to do it? Again, with so many various definitions and visions of socialism, it's difficult to answer. It's hard to imagine that in the most pure utopian view of socialism that workers would be given a great deal of choice in their employment. 

Ironically, for the socialist economy to be sustainable, it's only driven by its need to produce and distribute. If too many idiosyncratic employment requests are honored, there will be over-served and underserved sectors, leading to gross inefficiency, economic insufficiency and the whole thing might collapse!

Socialism: Freedom of Speech

Socialism certainly places a high value on freedom of expression. Oftentimes, artists flourish without having to worry so much about supporting themselves on little to no income. Mass demonstrations and rallies are a common feature of the socialist state. The thing to remember is that expression in socialism is encouraged, as long as it is supportive and beneficial to the system of state ownership.

There’s a funny joke I heard when I was a kid. The joke went like this: “An American and a Soviet were comparing each other’s countries. The American said to the Soviet, ‘In America, I’m so free that I can stand in front of the White House and scream, F*** Reagan!’ The Soviet responded, ‘Oh that’s nothing, comrade! I can go to the Kremlin, and stand right in front and scream F*** Reagan too!”

This reminded me of an article in a Marxist publication about freedom in Socialism and its close cousin, communism. The article praised loud and often violent rallies in support of workers' rights and against “fascism.” It argued that no one should ever be deprived of their right to speak out against the evils of capitalism. 

It plainly stated though that fascists should never be allowed to speak, and depriving them of their rights was a benefit to all. The question I had when reading the piece was, “who are these fascists?” It seems that fascists to them are anyone who does not share their enthusiasm for state-control of society.

Art too suffers a similar fate in socialism. The Soviet Union produced prolific painters, writers and musicians. When their works were felt to support the state, they were encouraged and lauded. When they didn’t, they were often diminished in brutal ways. Artists are known to have censored themselves, rather than be publicly ridiculed.

What Countries Are Actually Socialist?

Since the term socialist is used so often, and the true definition of the system depends on who you ask, it is confusing what countries are socialist and what aren’t. Here are some common countries that can be called, to some degree, socialist.

North Korea

The DPRK, or “Democratic People’s Republic of Korea” is unmistakably a socialist country. Though there are some situations where a private market exists, it has “the world’s most centrally directed and least open econom[y]...” according to the CIA World Factbook. “Freedom” to praise the deified Kim family leaders is abundant. Criticism is deadly.


Private ownership of companies is limited in China, but it does exist. In theory, the human needs of the populace are met, but in actuality, many remain impoverished. Certain groups of people are favored, and despite the aims of socialism, there is a growing wealthy class.


Soviet-style socialism came to Cuba in the late 1950’s and the economy has largely remained as it was when the Batista government was deposed by Castro and his followers. As the economy falls further and further behind the rest of the world, pressure has built on the Castro government to allow some entrepreneurship, under the close supervision of the state.


A true success story of socialism! Despite having a wealth of oil, Venezuela has seen the exodus of nearly everyone who has the means to leave. Those who stay are subject to shortages of food, medicine and other goods. The production and distribution of goods has now become the duty of the military. Industry is collapsing rapidly due to lack of investment.


Largely the opposite of Venezuela, and with good reason. Calling Sweden “socialist” is largely a misnomer. The country relies on a free market economy. In fact, many highly successful and innovative companies have come out of Sweden. Among them:

What Sweden does have is an extensive and generous system of social welfare. Tax rates are high, but so is the standard of living. Citizens are free to speak their minds for or against the government and economic system. Sweden can be called a welfare state in some regards, but it does use a form of socialism.


What is Socialism? It largely depends on who you ask. The key point is some level of state ownership of the economy, whether in law or in practice. Many of the aims of socialism were goodhearted, but the implementation became problematic. 

Socialists often choose to minimize examples like North Korea, Cuba, and Venezuela by saying they aren’t “real” socialist countries. This leads one to wonder: if that is fake socialism, I’d hate to see the real thing!