Socialism can be most simply explained as the number of social programs enacted, times the financial costs to taxpayers. The more costs associated with the social programs and their total number of programs, as a percentage of gross domestic production, the greater the level of socialism.
In really simple terms, the larger the government is, the more taxes are needed to pay for all the social programs and the more socialist your society would be considered. Many economists suggest, the larger the government and greater number of taxes, the less per capita production there is; which would be an inverse relationship. We’re not here to debate the ideologies though, we're just here to define the term socialism and understand what it really is.
Governments usually provide various services that are an expense to society. Although many deem socialism and communism as antonyms, this author prefers to look at socialism as a percentage of the economy where government services and products are provided, to the percentage provided by the private sector production. This is not perfect for a variety of reasons but can be used as a generality but surely don’t use it to compare different countries. There are many things that make countries wealthy and there are many things that make countries poor. If we knew what these were, we would have likely fixed the poor countries already. Lots of theories abound, but never take them a fact. Knowing what is in the best interest of the majority is a fool’s errand.
The primary difference between communism and socialism is private property rights. When there are no private property rights, the government then owns everything, and everyone worked for the government, that is communism. Whereas Venezuela, with its private-public partnership as many called it, is a mixed economic model as economist call it. It is a combination of a robust government sector and a substantive private sector, trying to work in harmony. This is a problem for a number of reasons, as Venezuela is experiencing but once that a discussion for another day.
The bigger the government is without property ownership being held by the State, the more socialistic. Over the last 30 years or so, the government has been buying up more and more real estate so once homes, lands, businesses, commercial buildings, and rents are owned by the government, that is communism with everyone works for the government. Under socialism, private property rights are still in the hands of the Citizens, it’s just that the property and various activities are taxed to pay for the government, The more total taxation as a percentage of total productive output, GDP, the more socialistic your society would be.
As an example, many may not consider prisons and jails to be part of socialism, because it is a needed entity yet the fewer people incarcerated the less socialism and fewer government costs there would be. Of course, the more people you have incarcerated the larger the correction system must be to manage, feed, cloth, shelter and try to educate the prisoners.
Socialism can be visualized as a sliding scale. With minimal government (libertarianism) to the left and communism, total government to the far right. The Democratic Party would be right of the Republican Party theoretically, but in reality, they are very close to one another and much closer today to the far-right communism than the to the far-left libertarianism.
This is one of the great misunderstandings as to which political ideology is far right and which one is far left. As an example, fascism appears to occur when the costs of government gets too large in relation to the amount of production or GDP, the gross domestic product as I noted previously. The major fascist nations of Germany, Italy, and Japan during WWII all were highly socialistic with high levels of militarism compounding the size and costs of government. To enforce all the taxation as GDP wains from the expansion of the government sector, those in government enforcement become harsher and penalties such as incarcerations and fines stiffer as wages drop and taxes rise. Basically, the government is squeezing the profits out of the private sector to pay for the increased costs of government. Additionally, in the 20th century, with the advent of fiat currencies put in place around the world, governments could simply print more money to pay for the additional costs of an expanding government, but this debases the currency without increased productivity causing the devaluation of the currency which results in eventual price inflation, the rising of manufacturing and consumer prices.
Where this author believes government central planners make a huge mistake, is crediting the production by private companies contracting with the government, as part of the GDP calculations when a bridge, jet fighter or a school is an expense to society. As an example, if all children were primarily educated via home computers, the costs of building schools could be eliminated. I am not saying this is a good or bad idea, it’s just an example of identifying costs and expenses associated with the government where the physical school itself is built by some private sector construction company but actually paid for by taxes. Today, we add the costs of building the school as GDP when it is an expense to our society making it appear that our society is more productive than it really is. A society cannot be more prosperous by increasing expenses as our society has seen since the 2008 Great Recession, with the cost of the Federal Government alone reaching $4 trillion annually with $1 trillion of that being printed with interest charges passed onto the taxpayers.