Socialist Economy
Collective Ownership of Means of Production
Socialist economy: Gov't owns means of production for people. No private property or wealth accumulation, but personal consumer goods are allowed.
Social Welfare Objective
The government makes decisions at the macro level with the goal of maximizing social welfare, rather than individual profit. In these decisions, the forces of demand and supply are not considered important. Instead, careful choices are made with the welfare objectives in mind.
Central Planning
In a socialist economy, the government makes all economic decisions regarding production, consumption, and investment. The Central Planning Authority allocates resources based on national priorities and availability and establishes targets for various sectors to ensure efficient utilization of resources.
Reduction in Inequalities
Private property and inheritance create income and wealth inequalities in a capitalist economy. A socialist system can reduce these inequalities by abolishing these institutions. But perfect equality in income and wealth is neither desirable nor practical.
No class conflict
Capitalism results in class conflict due to the differing interests of workers and management, who aim to maximize their individual profits. In socialism, everyone is a worker and there is no class conflict, as all work towards a common goal.