Answer to Question #28670 in Economics of Enterprise for fahad anwer

Question

what are the advantages and disadvantages of socialism

Answer 1

Socialism it is an economic system under which the majority of production resources are controlled by government in order their equal distribution.
The advantages of socialism are:
- Equal distribution of products among people and price control, which reduce the gap between different social classes;
- Employment securing, provision social welfare to vulnerable social groups;
- Due to economic planning socialism provides ability of better exploiting resources (labor, land etc), i.e. avoid insufficient or excess production;
- Since majority resources and their distribution are under government control there is no chance for producers’ monopoly and additional charges as a result.& &
However, socialism has the following disadvantages:
- Slow decision making process due to high level of bureaucracy;
- Lack of workers motivation to develop their skills and work harder;
- Lack of competition and entrepreneurship discourage economic growth and development of efficient technologies.