Criticisms of Socialism

Criticisms Of Socialism

Criticism of socialism refers to a critique of socialist models of economic organization, their efficiency and feasibility; as well as the political and social implications of such a system. Some criticisms are not directed toward socialism as a system, but are directed toward the socialist movement, socialist political parties or existing socialist states. Some critics consider socialism to be a purely theoretical concept that should be criticized on theoretical grounds; others hold that certain historical examples exist and that can be criticized on practical grounds. Because socialism is a broad concept, some criticisms presented in this article will only apply a specific model of socialism that may differ sharply from other types of socialism.

Economic liberals, pro-capitalist libertarians, and some classical liberals view private enterprise, private ownership of the means of production, and the market exchange as a natural and/or moral phenomena, central to their conceptions of freedom and liberty. Contrawise, members of these three groups may perceive public ownership of the means of production, cooperatives, and state-sponsored economic planning as infringements on liberty.

Critics from the neoclassical school of economics criticize socialist theories that promote state-ownership and/or centralization of capital on the grounds that there is a lack of incentive in state institutions to act on information as efficiently as managers in capitalist firms do because they lack a hard budget constraint (profit and loss mechanism), resulting in reduced overall economic welfare for society. Critics from the Austrian school of economics argue that socialist systems based on economic planning are unfeasible because they lack the information to perform economic calculation in the first place due to a lack of price signals and a free price system, which they believe are required for rational economic calculation. Critics of the socialist political movement often criticize the internal conflicts of the socialist movement as creating a sort of "responsibility void."

The criticisms presented below may not apply to all forms of socialism as some forms of socialism advocate state ownership of capital in a market economy, while other forms advocate state-directed economic planning and state-ownership of capital. Other strands of socialist thought reject state ownership altogether and instead argue for participatory economics and non-governmental worker-cooperative ownership of the means of production. It is important to note that many socialist theories and models are opposed to, and often criticize, other types of socialism for various reasons.