Top 5 Socialist Countries In The World


This Article was Reviewed by The Chief Editor, Godfrey

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This picture shows how socialism works.

When socialist countries are mentioned, one thing that comes to mind is that the state owns the means of production. Socialism is an economic ideology that emphasizes collective ownership of the means of production as opposed to private ownership. 

It is based on the premise of creating a society that is based on collaboration rather than a free market capitalist and exploitation. 

In socialist states, it is difficult to develop new ideas as the system takes away the motivation to do so. This is because there is collective ownership of the means of production. 

Some countries may have been known to practice socialism, but none practices only socialism. The defunct Soviet Union was the only country that had come close to true socialism. But in the end, the state fell apart.

So in this blog post, we will look at five socialist countries that practice socialism and the pros and cons associated with this system of government.

What Is A Socialist State?

This picture describes the transition in economic ideology.

It can be hard to say what a socialist country is because the word has come to be used in many different ways. 

Socialism is a political and economic theory that bridges the gap between rich and poor people in a country. It does this by ensuring that the means of production, distribution, and exchange of goods and services are owned by the public and not by private individuals. 

This system ensures that the profits are shared by everyone and not kept by a few rich people. 

Socialist countries can be anything from very progressive to very conservative. This often depends on the government.

Many socialist countries use the Marxist-Leninist model created by the Soviet Union. This is the reason many states are believed to practice communism. But communism is a more specific and extreme form of socialism that wants to eliminate all private ownership. 

However, socialism creates a completely equal system without classes, and even the government will fade away with time. The state is in charge of the means of production, suppressing bourgeois opposition, counter-revolution and promoting Soviet collectivism.

To muddy the disparities between socialist and communist states, many political scientists believe that no country has ever been able to implement a purely socialist or communist government as they are bound to mix up at some point. 

This has led to some being both democratic and socialist. As a result, these countries have democratic governments and socialist economies in which production and wealth are owned collectively. 

5 Countries That Practice Socialism

Below are some of the countries that are known to practice socialism. They are listed in no particular order.

1. North Korea

North Korea is one of the socialist countries in the world.

North Korea is one of the most socialist countries in the world. Article 1 of its Constitution says that it is an independent socialist state.

The country operates a one-party state, with the Workers’ Party of Korea (WPK) being the only party in charge of governance.

The country’s economy is planned and coordinated by the government. It is one of the few places in the world that has a strict socialist market economy.

The country ranked 39th out of 39 countries in the Asia–Pacific region. Its overall score is lower than the averages for both the region and the world. In addition, it has been at the bottom of the index yearly since 1995.

As a socialist state, commercial and business activity is restricted. People and businesses don’t have much economic freedom. The state owns almost all of the property. Even personal property is under government control. 

Also, there is no working judiciary, and the rule of law is weak. The system is full of bribery and corruption, with no transparency in state institutions.

Companies that are into foreign trade are controlled by the Workers’ Party, the Korean People’s Army, and members of the cabinet.

This is coupled with no good tax system in place, and nearly all the gross domestic product (GDP) comes from state-owned industries.

And most of the limited resources are spent on the military. In North Korea, the government controls almost every part of the economy. 

2. China

This is a picture of China's Flag, the country is among the socialist countries in the world.

The People’s Republic of China is another socialist country in the world. China has a one-party system run by the China Communist Party (CCP). The CCP is in charge of many companies and businesses in the country and directs the overseas market and economy of the country.

China ranks 158th in terms of economic freedom in the 2022 Index with a score of 48. China is the 39th-placed nation in the Asia-Pacific region, and its overall score is lower than the average for the area and the entire world.

The country does not adequately protect or enforce property rights. The state and rural collectives are the only owners of the land. Equally, land seizures are common occurrences. Even the party dictates the affairs of the judiciary. 

The country has practiced socialism for a long time. But in the last few years, it has made a big change toward a mixture of socialism and a market economy. Still, it is largely a socialist state.

3. Cuba

Cuba practices socialism.

Cuba is a socialist state to the core. Since 1959, the country has followed the Pro-Soviet Marxism and Leninism theory of socialism and has had a socialist political system.

Cuba operates a one-party system, with the Communist Party of Cuba being the sole ruling party in the state.

Socialism has thrived in Cuba because the government runs the economy and provides its people with free education, housing, food, entertainment, and housing. So it’s not hard to see why it’s still mostly a socialist state.

The country makes money from western tourists, a labor trafficking scheme that sends Cuban doctors and nurses to other countries against their will. And subsidies from authoritarian or Communist countries like China, Russia, and Venezuela. It also seizes the meager salaries of average Cubans to convert into hard currency.

The state also owns nearly all the means of production and there is no investment or financial freedom in the country. Even there is no separation of powers among the judiciary, the National Assembly, and the Communist Party among the judiciary, the National Assembly, and the Communist Party. 

 Over 70% of the workers are employed by the government, while private business is extremely limited.

The government goes a step further to regulate foreign investment and the financial sector. This makes it difficult for entrepreneurs to access loans. The government also controls the flow of money and the exchange rate.

4. Laos

Laos is among the socialist countries in the world.

The Lao People’s Democratic Republic, also known as LAOS, is a one-party socialist and communist state led by the Lao People’s Revolutionary Party (LPRP).

LAOS is still one of the few strictly socialist countries worldwide because it still follows and practices Marxism-Leninism. However, the way things are done and the beliefs in Laos tilt toward socialism.

Laos operates a one-party system. And civil liberties are heavily restricted. Article 13 of the Constitution says that the government is in charge of regulating every enterprise in the country, including the judicial system. 

And all land belongs to the state. To further its socialist ideology, the government influences prices through subsidies and state-owned businesses.

5. Vietnam

Vietnam is one of the leading socialist countries in the world.

Vietnam is a socialist state to its core. Consequently, the government plays a big role in guiding the country’s affairs and economy.

Over the years, the country has reaffirmed its commitment to building a socialist economy in Vietnam. 

Just like any socialist state, all the lands belong to the government. And the Communist Party of Vietnam has full control over the judiciary. 

Although the country has a new Labor Code, which went into effect in 2021, there are still labor restrictions. In addition, the government sets prices for most things like fuel, energy and water utilities, food, natural resources, and medicines.

Features Of Socialism

a. There Is Collective Ownership Of Resources

Socioeconomic goals form the basis of a socialist economy’s whole structure. The welfare of the people is prioritized over financial gains. As a result, the state owns the means of production. 

b. It Has Central Economic Planning

There is always a central planning committee in a communist economy. This group decides how the state’s resources will be used, the methods of production and the quantity to be produced. 

c. Consumers Do Not Have The Luxury Of Choice.

Consumers don’t have the freedom to choose the products they want. Rather they are restricted to choosing from the available option that the state provides. Also, the government chooses occupation for its citizens.

d. It Promotes Equal Distribution Of Income

The system is set up so that no one accumulates much wealth. This reduces the disparity between the rich and the poor. And everyone has equal rights and access to opportunities like education, health care, etc. 

Also read: List of African Countries and Their Colonial Masters

e. Market Forces Are Absent In Socialist Economy

Since there is no profit motive, the price mechanisms will not be able to influence any product decisions. This is because prices are set by the planning committee based on their social and economic objectives. 

Advantages And Disadvantages Of Socialism

Socialism has several advantages that made it appealing at a time when capitalism was full of unfairness and exploitation. Some of these advantages are: 

i. There Is The Presence Of Social Justice

Socialism aims to eliminate economic inequality and ensure an even and equitable distribution of the nation’s income. 

ii. Production Is Based On The Need

One of the negative aspects of capitalism is that production depends on the purchasing power of a few elites. But socialism ensures that people’s basic needs are met first.

iii. Egalitarian Distribution Of Wealth And Income

Socialist economies provide equal opportunities for everyone. This stops a small number of people from taking advantage of others to amass wealth for themselves.

iv. Socialist States Enjoy Rapid Economic Development

A central committee is in charge of utilizing resources and making prompt decisions in a socialist economy. This leads to little wastage as resources are used appropriately. Thus socialist countries experience rapid economic growth. 

v. There Is Balanced Economic Development

Economic planning allows for the balanced growth of the entire nation. It guarantees that all regions are developed. This guarantees equal economic growth in every sector.

vi. Socialism Brings About Economic Stability

Socialism reduces the possibility of economic instability since the economy is well-planned. And because there is no private investment, economic changes don’t frequently happen in socialist economies.

vii. It Leads To Ecological Conservation

A capitalist economy prioritizes profit-making over everything. But the central committee in a socialist economy protects the country’s natural resources and ensures they are used properly.

vii. There Is Minimal Exploitation And Class Struggles

Socialism creates a classless society where everyone is treated the same. There is an absence of exploitation by the wealthy. This eliminates class struggles. 

viii. There Is A Social Welfare

The government provides basic needs like food, shelter, clothes, medical care, education, employment, etc. So people can focus on their work without worrying about their needs, thereby leading to increased productivity.

Disadvantages Of Socialism

Despite the many benefits, socialism also has some setbacks. They include:

i. There Is No Cost Calculation

There are no market forces in socialist economies. The government controls businesses and owns the means of production. So it is difficult to figure out the costs of production. 

ii. There Is A Lack Of Incentive

Since socialism is against accumulating personal wealth, workers are not rewarded for making more effort. This leads to a decline in innovation. As a result, workers will become less productive, which slows down economic growth.

iii. There Is a Lack Of Economic Freedom

Socialism takes away people’s freedom to start businesses. The planning committee decides the job each person will do. And these workers cannot change their jobs without permission from the planning committee.  

iv. There Is No Consumer Freedom

People don’t have the freedom to make choices. The planning committee decides the products that are produced. So you can’t do much even if you don’t like a product. 

Wrapping up

We hope by now you have understood what socialism stands for and some of the countries that practice it. Even though it is no longer the dominant economic ideology in the world, there are still some nations that abide by its idealogy.

 I hope you enjoyed reading this blog post. 


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About the Chief Editor

Godfrey Ogbo, the Chief Editor and CEO of AtlanticRide, merges his environmental management expertise with extensive business experience, including in real estate. With a master's degree and a knack for engaging writing, he adeptly covers complex growth and business topics. His analytical approach and business insights enrich the blog, making it a go-to source for readers seeking thoughtful and informed content.

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