Market Socialism

Socialism is an economic philosophy developed in 19th-century Europe that diagnosed many social ills—poverty, inequality, injustice, and unemployment—as consequences of the capitalist system's private ownership of the means of production. There are many forms of socialism, all of which eliminate private ownership of capital and replace it with collective ownership. These many forms, all focused on advancing distributive justice for long-term social welfare, can be divided into two broad types of socialism: nonmarket and market.

The historical collapse of nonmarket socialism in the 20th-century history of the Soviet Union, Eastern Europe, and China was due, in part, to their inefficiencies caused by information problems of centrally planned complex economies, motivational problems of self-interested people in societies purporting to transcend individualism, innovation problems of change-resistant bureaucracies, and ...