An economic system based on public ownership of the means of production. The most overt examples of public or common ownership exist in strict communist societies. Small scale communes exist within which people own all physical assets commonly. Some communes even have common ownership of some clothing. Strict communism requires income equality, and is sometimes referred to as economic democracy.
Common ownership of the means of production implies that production is directed by 'society' rather than by entrepreneurs. Socialists tend to promote democratic government as the representative of society in directing production. Large scale production cannot be planned through direct democratic vote, and requires that bureaucrats and officials decide many issues in production.
Critics of socialism claim that socialism fails to match the performance of capitalism for three reasons. First the equalization of incomes eliminates the incentive to innovate and work hard. Second, bureaucrats and high officials do not posses the informational required to direct production in a complex society. Market prices are needed to solve the informational problems of directing production, and socialism will at best have pseudo-prices. The absence of financial markets is a major problem with socialism. Third, socialism tends to degenerate into oppressive dictatorship. The incentive, informational, and political problems of socialism are inescapable.
Many want socialism for ideological reasons. Egalitarian ethics drive the socialist movement. Marxists claim that capitalism is exploitative. Socialism is indefensible in terms of economic efficiency and natural rights ethics. Socialists envision a better world, but their dreams are unrealizable.
1. the USSR (Soviet socialism based on overt central planning)
2. Nazi Germany (national socialism based on comprehensive regulation)
3. Sweden in 1991 (before the backed off from the abyss)
4. England just before Thatcher (before the backed off from the abyss)