socialism

Meaning: Socialism is a system in which the means of production (factories, land, natural resources) are owned collectively or by the state rather than by private individuals. Production and distribution are guided at least in part by central planning instead of market competition, with the goal of reducing class inequality. In Marxist theory, socialism is a transitional stage between capitalism and communism. Many real economies are mixed, combining markets with state-run services.

On the MCAT: Passages on social stratification, global inequality or health disparities may compare economic systems. Capitalism means private ownership, profit motive, competition and wage labor, and it tends to produce larger gaps in wealth. Socialism means collective or state ownership and a more even distribution of goods. Expect a link to conflict theory: the bourgeoisie own the means of production, the proletariat sell their labor, and class conflict follows. You may be asked to predict how an economic system would affect inequality, social mobility or access to services.

Common confusion: Socialism is not the same as communism. In Marxist theory communism is the later, classless and stateless stage, while socialism still has a state. A welfare state that taxes and funds public programs is also not socialism by itself, because private ownership of production continues in capitalist countries with welfare programs.