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Socialism is a term with conflicting definitions. In the West it generally denotes the view that the state is responsible for effecting an even or more equitable distribution of wealth and for taking control all or some of the means of production and distribution of resources in an economy.

In Chinese Marxism, it is a stage of history and class structure in which power has passed to the peasant and the proletariat. In the official ideology of the People's Republic of China, China is currently in the primary stage of socialism. However, unlike Western definitions of socialism, the Chinese definition does not exclude or encourage state policies regarding distribution of wealth, and hence Chinese economic reform allows for policies which most Westerners would regard as capitalistic, although Chinese would not.

Socialism and communism

Extreme forms of socialism are commonly called communism, though philosophers (particularly Marxist philosophers) reserve that to mean the final, stateless stage in the supposed progression of a socialist society. There are also mixed governmental forms sometimes called socialism; while many who support these forms are happy being called socialists, others consider themselves to be, not socialists, but moderate capitalists. Communism is at one extreme, and at the other are those who wish to permit some amount of (moderately regulated) private enterprise and are called, for example in Germany, Social Democrats. Indeed, there have been dozens of different terms for different kinds of socialism.

Socialism and capitalism

There is a continuum from pure capitalism to pure socialism. The point on the continuum where "socialism" becomes "capitalism" often varies, especially from country to country. Some who support a mixed economy are happy to be called socialists, while others who support a mixed economy would rather be called moderate capitalists. This is especially the case in the United States and some other countries, where the word "socialism" has extremely negative connontations it does not have in other parts of the world. (Asking whether a supporter of a mixed economy is a moderate capitalist or a moderate socialist is like asking "is the glass half empty or half full"?)

Support for a mixed economy can come from the socialist tradition; but it can also be derived from other points of views, e.g. Keynesianism. This is often not so much as a difference of policy, as a difference of political origins or means used to defend a viewpoint. Increasingly the socialist and liberal (in the American sense) traditions are merging, and so it increasingly makes little sense to distinguish socialist and non-socialist support for a mixed economy.

In addition to the Social Democrats parties of mainland Europe the Irish Labour Party, Britain's Labour Party, and the Social Democratic and Labour Party of Northern Ireland all are (or originated) as democratic socialist parties.

It is questionable whether there are any purely capitalist, as opposed to mixed, economies in the world today. Even the United States, which is often considered much closer to pure capitalism than most of the world's other mixed economies, has many socialist institutions, such as

• social security,
• environmental regulation,
• labor regulation,
• product safety regulation,
• progressive taxation and
• public education.

The cornerstone beliefs of communism, which stem from Karl Marx, are based around the notion that a capitalist society is a class society.

Mainstream British and Eutopean democratic socialists do not consider their beliefs to stem from Karl Marx, instead they promote a mixed economy where capitalist enterprises operate side by side with government enterprises and regulation. The goal of such government activity is to counteract the tendency of pure capitalism to produce income and wealth inequalities.

In America the 20th century the word "socialism" became more widely used to cover not only the revolutionary communist notion of a transitory state, but the more reformist social democratic tradition typified by parties such as the British Labour party. These parties felt that gradual reform within the democratic structures could also provide improvements in the circumstances of the working class. These parties typically support tax-funded services such as public education and infrastructure projects (which may parallel the Keynesian notion that large scale public spending can be used to "restart" an economy in recession), as well as measures such as welfare payments and medical care, which are considered to be controversial in some countries and among some people.

This form of democratic socialism grew during the first part of the 20th century, particularly after the depredations of World War II. It was at the height of its power in Europe in the 1960s. Since this time it has undergone a number of changes. The philosophies of many of the social democratic parties overlap or have become indistinguishable from the American liberal tradition which suggests that social reform and improvement in the conditions of the working class can take place despite, or even helped by, the presence of an active capitalist economy.

See also:

• Anarchism (including Libertarian Socialism)
• Communism
• Post-Communism
• Liberalism
• Social Democrats
• Syndicalism
• The purpose of government
• Welfare State
• Karl Marx
• Friedrich Engels
• Georg Hegel

• Opposing ideology: classical liberalism
• Criticism of socialism: Economic Calculation Problem