by Jeffrey Schaffer

Created on: September 07, 2009   Last Updated: September 09, 2009

Socialism is the state in which a central government exercises heavy regulation of a country's economic, social, and educational infrastructure. Such a government derives its power from levying high taxes and using it to fund large public welfare systems such as roads, healthcare, and poverty relief.

Socialism has been adopted in many countries around the world and has proved to be a successful system. Yet the United States has been generally reluctant to adopt socialist systems, preferring to rely on a largely capitalistic, libertarian system instead.

Capitalism allows for more personal freedom in financial decisions but tends to allow little relief for those who are poor or unemployed. So given the advantages of socialism, what are the drawbacks that Americans should be aware of?

First of all, socialism works best in a small, industrial, and generally homogeneous country like Germany, Japan or Norway. Such countries can be easily regulated because they tend to have relatively less diversity in society and culture. In a larger, more diverse country such as the United States, this is far more difficult given that much of the countries population lives in rural areas.

It quite a logistical challenge to maintain the intense regulation you need in the major cities and still allow for the rural areas to receive support, though both would be paying heavy taxes. It would be more practical to implement a state-level socialism in this country which would allow for local governments to have direction over its people.

The second difficulty is that socialism tends to negate competitive quality and limit social mobility. In a Capitalistic society, prices are dictated by the quality of product; the idea being that one should pay more for good things and less for lower quality items. In a socialist system, prices are more tightly controlled allowing access to better goods by lower-income people.

This is beneficial for the buyers, but places a burden on the sellers; if I get paid nearly the same for a high-quality item as I would for a lower-quality item, then the incentive for producing higher quality items tends to slack. The result tends to be a lowering of over all drive for innovation or efficiency.

Socialism tends to produce security for lower and middle income people, but there is less of an ability to move higher up. With heavier rates of taxation, and limitation on business growth, it takes more effort to increase one's earnings. Thus in many countries such as Japan

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