Socialism /ˈsoʊʃəlɪzəm/ is an economic system characterised by social ownership and/or control of the means of production and cooperative management of the economy, and a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises. There are many variations of socialism and as such there is no single definition encapsulating all of socialism. They differ in the type of social ownership they advocate, the degree to which they rely on markets versus planning, how management is to be organised within economic enterprises, and the role of the state in constructing socialism.
A socialist economic system would consist of an organisation of production 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, and accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time. Distribution of output would be based on the principle of individual contribution.
As a political movement, socialism includes a diverse array of political philosophies, ranging from reformism to revolutionary socialism. Proponents of state socialism advocate for the nationalisation of the means of production, distribution and exchange as a strategy for implementing socialism. Libertarian socialism proposes to 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 over the means of production. Conversely, democratic socialism seeks to propagate the ideals of socialism within the context of a democratic system.
Modern socialism originated from an 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private property on society. In the early 19th-century, "socialism" referred to any concern for the social problems of capitalism regardless of the solution. However, by the late 19th-century, "socialism" had come to signify opposition to capitalism and advocacy for an alternative system based on some form of social ownership. Utopian socialists such as Robert Owen (1771–1858) tried to found self-sustaining communes by secession from a capitalist society. Socialists inspired by the Soviet model of economic development, such as Marxist-Leninists, have advocated the creation of centrally planned economies directed by a single-party state that owns the means of production. Yugoslavian, Hungarian, East German and Chinese communist governments have instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production).