There are some important characteristics of the socialistic economy. These are –
- State ownership
The main characteristics of the socialistic economy are the termination of private ownership of assets. There is private ownership over organization, land, and other materials of production. The state ownership is established overall assets of the country and all materials of production. The public of the country or state is the owner of these assets.
- Absent of personal profit
Another main characteristic of the socialistic economy is the end of personal profit. The ownership of personal property is created personal profit. But there is no scope of creating personal profit under a socialistic economy.
- Social welfare
The production and distribution systems n a country are aimed at social welfare under a socialistic economy. Earning profit is the primary concern for producers in the capitalistic economy. But social welfare is the primary concern for the socialistic economy.
- Economic planning
Economic planning is another characteristic of a socialistic economy. However, there are central planning authorities in the socialistic economy. The central planning authority sets how much to produce goods, how to produce, what to produce, where to produce, how to distribute etc. that’s why the socialistic economy is called planned economy.
- Production method
The production systems are playing important in solving problems under a socialistic economy. There is no personal ownership over production materials. Here, exists state ownership over production materials
- Distribution method
A fare distribution system is another characteristic of a socialistic economy. The basic principle socialistic economy is everyone gets a job on their qualities and gets wages according to it. That’s why; there is no scope of exploitation in this economy.
- Social security
To ensure social security for all is another characteristic of a socialistic economy. Besides, the basic needs of people also need to ensure.
- Balanced development
Another characteristic of the socialistic economy is balanced development. The central planning authority takes all economic decisions. The various sector of the economy is benefitted such as agriculture, industry, education, health, communication, etc.
- Less Unemployment
Another characteristic of socialization economy is less unemployment. The production systems are operating through the central planning authority. As a result, inflation and unemployment may reduce.
- Absent of trade cycle
There is no extra production as having a central planning authority. It followed planned ways for production and distribution. So, in this economy, people are free from the trade cycle
- Protection of workers interests
The government can take various steps to protect the interest of labor in a socialistic economy. The government can protect them by setting minimum wages, fair working hours, solve industry disputes, etc.
- Absent of automatic price system
Absent of an automatic price system is another characteristic of a socialistic economy. The price is not set as demand increased. The central planning authority sets the overall price in the market and consumer buys according to it.
So, learners, there are some basic characteristics in the socialistic economy. There is no private ownership over the production materials and every activity is control by the central planning authority.