Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy. “Social ownership” may refer to cooperative enterprises, common ownership, state ownership, or citizen ownership of equity. There are many varieties of socialism and there is no single definition encapsulating all of them. They differ in the type of social ownership they advocate, the degree to which they rely on markets or planning, how management is to be organised within productive institutions, and the role of the state in constructing socialism.
A socialist economic system would consist of a system of production and distribution organised to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital. Accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time in place of financial calculation. Distribution would be based on the principle to each according to his contribution.
As a political movement, socialism includes a diverse array of political philosophies, ranging from reformism to revolutionary socialism. Proponents of state socialism advocate the nationalisation of the means of production, distribution and exchange as a strategy for implementing socialism. In contrast, libertarian socialism proposes the traditional view of direct worker’s control of the means of production and opposes the use of state power to achieve such an arrangement, opposing both parliamentary politics and state ownership. Democratic socialism seeks to establish socialism through democratic processes and propagate its ideals within the context of a democratic political system.