Socialism is an economic and political philosophy based on the idea that the benefits of economic activity should be equally distributed throughout a society. Socialist nations are often democratic; still, they must rely on centralized planning to achieve their goals. Socialists reject the stress on individualism and competition for profit that lie a the heart of capitalistic practice. Instead they emphasize cooperation and social responsibility as ways to achieve a more equal distribution of both income and opportunity, so reducing differences between rich and poor.
Countries with a socialist government enact one or more public policies to achieve the aims of socialism. Theses public policies include nationalization, public services, taxation, and a centrally planned economy. Nationalization is placing enterprises under government control, often by taking over privately owned industries. Socialist governments usually want to control certain sectors with many workers and a few dominant firms, such as utilities, transportation, and steel. A goal of each socialist governments is to give each company’s workers a say in deciding how the company is run. socialists aim to guarantee the public welfare by providing for the equal distribution of necessities and services. Countries that provide extensive social services at little or no cost to the users are called welfare states. All governments in capitalist and socialist states get their funds from taxation because social welfare services are expensive, however, taxes in socialist countries tend to be high.
In a socialist government, economic decision making is more centralized. In a centrally planned economy, government bureaucrats plan how an economy will develop over a period of years. They set goals for production and direct investment into specific industries.