Market socialism
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
Market socialism combines social ownership with market allocation. Enterprises are owned by the public or by cooperatives, not by private capitalists. But markets and prices, not a central planner, decide what is produced and who gets it. The idea was developed by Oskar Lange in the 1930s. It tried to keep socialist ownership while avoiding the inefficiency of central planning.
Example
Yugoslavia's system of workers' self-management was market socialism in practice. Workers ran their own enterprises, and these enterprises sold goods in markets at market prices.
Don't confuse with
- State capitalism: here the state owns or controls big firms that run for profit inside a capitalist market economy. In market socialism the goal is social or cooperative ownership, with markets used only as a tool.
- Central planning: the Soviet model, where a planner, not the market, allocated resources.
Related concepts
- Marxian economics
- Historical materialism
- Class struggle
- Surplus value
- Reserve army of labour
- Fabian socialism
- Democratic socialism
- State capitalism