MARKET SOCIALISM
A theoretical concept of an economic system in
which the means of production (capital) are
publicly or collectively owned, and the
allocation of resources follows the rules of the
market (product, labor, capital markets).
Compromise between socialist planning and
free enterprise, in which enterprises are
publicly owned but production and
consumption are guided by market forces
rather than by government planning. A form of
market socialism was adopted in Yugoslavia in
the 1960s in distinction to the centrally planned
socialism of the Soviet Union. A similar
development occurred in Hungary during the
late 1960s and early 1970s.
Under market socialism, the political
community owns capital and distributes its
income in a democratically justified pattern.
Production remains organized through
competitive market mechanisms. Designs
and defenses vary, but all are proposed
replacements for capitalism.