What, exactly, is “Socialism”?

Dictionary definitions of “Socialism” don’t seem to fit the way it’s often used. For example Merriam Webster tells us Socialism is “collective or governmental ownership and administration of the means of production and distribution of goods,” which sounds a lot like Communism.  The term “Socialism” is most often used to describe government support for and management of social programs, namely, disability insurance, education, mass transportation, roads, and health care,  all those services all people need but cannot be expected to pay for out of pocket because they require the pooling of community resources with democratically agreed-upon regulations.  The free market provides for the basic needs of the individual, and a government provides for the basic needs of collective civilized society that takes care of its own.

The question, What is Socialism? comes down to this: How does the government raise funds for social services? By owning the country’s natural resources outright, taxing corporations that own natural resources, taxing personal income, charging user fees or by creating the funds for that purpose?

Government Ownership of Natural Resources

Some Socialist governments use the income from owning natural resources to fund social programs; for example, Venezuela owns oil fields and uses profits to fund social services. In theory, this seems like a good strategy. The wealth of the country’s natural finite resources are, after all, owned collectively by the people, present and future. In practice, however, government-controlled lucrative industries like the oil business can become corrupted. It is difficult for a government to regulate itself. Dictators are born this way.

Corporate Tax on Private Ownership of Natural Resources

Alternatively, a country’s natural resources can be “owned” privately and taxed in order to raise funds for social programs. With this kind of ownership, the corporation is really “renting” the natural resources from the people. In this situation, ideally there is separation of business and state, such that government can regulate the industry, tax it, keep it from harming the environment and creating health hazards.

Unfortunately, in the U.S. the oil industry, for example, is so centralized and power so concentrated — and very, very wealthy — that it can wield power over the government by lobbying political representatives and writing regulations, and by getting oil industry people into high offices.  A Direct Democracy, wherein the people constrain the votes of the representatives in Congress and the Senate, would help create a better separation of business and state so that a fair tax on private ownership of natural resources could be levied.

Tax on the People

An income tax on the people might be levied to pay for, say, universal health care, but what happens when a person can’t afford to pay the tax? Will he/she be denied service? What if the tax for universal health care adds an additional burden on already overburdened poor and middle class?  What if one person has to pay a high tax and never uses health services because he/she takes good care of him/herself, while a person who pays low or no taxes drinks, smokes, uses drugs and eats nothing but junk food?

Charging Sliding Scale User Fees

Alternatively, those that use the services could pay for them. Those that don’t use the services would not pay for them. If a government provides services at cost, citizens may be able to pay out of pocket.  Sliding scale user fees could help make up for income disparity.  Consumption taxes on unhealthy products such as cigarettes and alcohol could help pay for health care. This is inherently more fair than taxing everyone.

Direct Treasury Funds

Because sliding scale fees and consumption taxes would not cover the full amount necessary for a first-class social service system,  a another solution is needed.  Fractional-reserve banking (the Federal Reserve) should be phased out, allowing the U.S. Treasury to create currency (only) to build and maintain public infrastructure projects — roads, mass transit, utilities, hospitals, parks, community centers and schools. The government would then operate like a non-profit co-operative providing services to members (all citizens) at low cost.

In conclusion, if we want to avoid robbing Peter to pay Paul, social programs would be best provided by a combination of corporate tax on private ownership of natural resources, sliding scale user fees, consumption taxes, and direct funds from the Treasury to build and maintain public infrastructure assets.

See What, exactly, is Capitalism?


3 Comments Add yours

    1. John Heaviside says:

      Hi Tori, see my post. Socialism is not a creative writing experiment. See my post below. AWSOME WORK. You have me thoroughly intrigued. I’ve been stuck in low level dialogue for years and wanting to move up and out of that narcissisticly abusive social context. I’ll look into the format and ideas here. I’m already VERY VERY impressed, but also heartened that many of the ideas that I came across on my own have been better designed by someone else and all I need do is contribute to the refinement process. I feel I have to contribute in the category of upgrading the process whereby raw materials are extracted from the earth on all this, lets talk further. Maybe we talk on the phone.


  1. John Heaviside says:

    Exactly. The Socialism word and how it’s used and manipulated is a very important topic these days. I’m thrilled at the idea of using evolution of cognitive functioning unto the topic. People not only don’t know the difference between Socialism and Marxism, ………….THEY REFUSE TO UNDERSTAND. That’s the problem. People who are willfully uninformed are willing pawns to anothers evil plans. The degree to which so many, otherwise smart individuals resign themselves to logically fallacious dialectics and related thought processes is alarming. Robert J. Lifton in his book “Psychology of Totalism and Thought reform in Communist China” chapter 22 spells it all out in terrifying detail. It kills me that the rest of the world should have so much professed Socialism, the Socialists decry “That wasn’t REAL Socialism” and the very topic of “What did we learn from the mistakes” is reduced to mindless repetitive arguments about corruption and Capitalism undermine it. In a relationship, which is what a Governments Economic system is, a relationship between consumers, producers and managers of terms of exchange, you follow arguments, disagreements, break ups, etc., with a discussion in which all sides of the issue articulate grievances unto the “other” own up to personal mistakes and establish terms of remedying the problem. If you’re in a relationship with someone who turns it all back on you, gaslight, redirects, etc., well than nothing gets worked out. This is the problem with the people behind the phonetic combination of words that form “Socialism”. I can accept failures only if those failures are part of a personal reflection and evolution format. Nothing Socialist is operating unto that terms at this present time. I was, and to this day still are a weird form of Socialist, yet the word has been co-opted by unrepentant addicts to ideology.


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