How are disparities minimised in a socialist economy
Answers
The concept of socialism was given by Karl Marx and Friedrich Engels. Socialism means 'all things to all men'. In a socialist economy the government controls and regulates the economic system to ensure the welfare of all the people and provide equal opportunities to all.
In order to minimize the disparities there is:
1. Collective ownership: The means of production are owned by the community or government. The government uses these resources for the advancement of social welfare.
2. Economic planning: The government adopts economic planning to achieve the objectives of socialism.
3. No competition: The state is the sole entrepreneur. There are no capitalists.
4. Positive role of the government: The government plays an important role in decision making. It controls the distribution, exchange, investement, consumption and foreign trade.
5. People are given work and wages according to their ability and needs. There is no scope for the exploitation of labour class.