1) An economic system where the means of production (large machinery, equipment and land) are organized to directly produce goods and services for use as opposed to being owned and operated for private profit. It entails some form of public, cooperative or collective ownership in the either autonomous cooperatives or a network of public entities or a centralized state.
There are many models of socialism that vary in three ways: the coordinating mechanism for making economic decisions (economic planning or market socialism); the type of ownership; and how firms are managed (self-management, democratic management, etc).
The fundamental difference between socialism and capitalism is the elimination of private property in socialized production under socialism (i.e; in highly collective and mechanized industries) so no idle class can live off profits, rent and interest. Instead of going to a class of capitalists, the profit might go to all the workers in a firm (in cooperative types of socialism) or to the public at large (in public/state ownership types of socialism) - potentially eliminating the need for taxation as a source of public revenue.
2) Political movements that advocate a socialist economic system; but sometimes it is used to refer to the policies of self-described Communist or Social democratic parties regardless of whether or not these policies have anything to do with socialism as a different economic system than capitalism.
"I am a socialist; I think capitalism is unjust and becoming inefficient for providing for society as a whole."
"Soo... you think we should tax the rich to pay for social programs and regulate businesses to make them work for 'society'?"
"That is not socialism... socialism means changing the ownership of enterprises. In fact, socialism would mean we don't need to rely so much on taxes because the profits made by enterprises could be used to replace the role of taxes in financing public services. And regulation is just an attempt to correct market failures in capitalism, socialism would not require inefficient regulation because we would directly own and run enterprises."
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