About the term Socialism


   For most of the post World War II period the eight EE countries of our concern defined themselves and were most frequently referred to as  socialist. This designation is somewhat controversial, because of different interpretations of the word socialism, as discussed bellow.  The Soviet Union was the first socialist country (from 1917) followed by Mongolia (1921). After the World War II in addition to East European countries three socialist countries emerged in Asia namely China, North Korea and North Vietnam . Cuba became socialist in 1959. During 1960s and 1970s several others Asian, African and Latin American countries converted to socialism (see Kornai: The Socialist System p. 6).

The term socialism applied to these countries means Soviet-type socialism. It is characterized by a combination of totalitarian political system dominated by the rule of Communist party with the centrally planned command economy in which most of the firms are owned by government and private ownership is almost nonexistent.

Many other countries - in Western Europe and elsewhere in the world - were, at least for a limited time, also ruled by "socialist" governments. The West European socialism, however, differs from the Soviet-type socialism significantly:

1) its political system has been consistently democratic (socialist parties came to power, or lost power, in free elections);

2) its economic system has been based on market coordination and private ownership, although frequently combined with partial nationalization (banks, some large industrial firms etc.), strong intervention of the government and some kind of "indicative" (nonobligatory) planning.

More generally, the term "socialism" has been traditionally used in three related but distinct meanings:

a) as a set of socialist ideas;

b) as a political movement;

c) as a socio-economic system.

Read more about:

a) Socialism as a set of ideas

b) Socialism as a movement

c) Socialism as a social and economic system.

d) How Socialism Emerged in Russia

e) Why the East European countries became socialist after WWII












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