What are the demerits of socialism.
Answers
Explanation:
Disadvantages of socialism include slow economic growth, less entrepreneurial opportunity and competition, and a potential lack of motivation by individuals due to lesser rewards.
Answer: (i) Loss of Consumer Sovereignty:
A consumer has no choice of his own, he acts as a mere slave under this system. Government produces goods and services keeping in view the needs of the people.
(ii) Less Democratic:
ADVERTISEMENTS:
Socialist economy is always less democratic as it possesses no element of freedom. It is also like government dictatorship.
(iii) No Automatic Functioning:
Under this system, no automatic function in system exists at all. It is the Central Authority, i.e., government, that governs the country according to its own interest.
(iv) Evils of Bureaucracy
In socialist economy, all economic activities are controlled by the government. Thus, they develop all evils of bureaucracy like favouritism, delay, corruption and other sue evils,
(v) Rigid Economy:
Socialist economy is very rigid and not susceptible to change according to requirements. Hence people work like a machine and never get any incentive to work.
(vi) Burden on Government:
All the economic activities are performed by the Central Authority on behalf of the government. Hence, it is overburdened with daily activities and, therefore, it gets very less time to think and plan for the economic prosperity of the economy.
(vii) Expenditure on Planning:
In fact, planning is a long process in a socialist economy. This expenditure is unnecessarily wasteful and a burden on the national economy.