A social and economic system by which the government owns all property and the means of production with none controlled by private parties. This concept, first developed by Karl Marx (Marxism), was intended to bring about a classless society with people contributing and receiving according to their ability and needs. The system lacks vitality as there are no incentives for individual initiative and extra effort goes unrewarded, in contrast with capitalism where individuals can own land and the means of production. Increasingly the countries that employ this ideology are changing their concepts and allowing some free enterprise. Socialism is similar to communism.

See also: capitalism, socialism.