Q.Indicate the demerits of Socialism.

Socialism curbs individual freedom, removes market incentives, breeds bureaucracy and concentrates power in the State.

Under socialism the State owns the means of production and the economy is run by centralised (direction) planning. Its main demerits are:

• Loss of economic freedom: individuals lose the freedom to own property, choose an occupation freely and consume as they wish; the State decides for them.
• Loss of consumer sovereignty: production is planned by the State, so consumers get what is produced rather than what they want.
• Lack of incentive and efficiency: with no profit motive and no competition, there is little incentive to work hard, innovate or cut costs, so resources are used inefficiently.
• Excessive bureaucracy: central planning needs a huge administrative machinery, causing delay, red tape and corruption. …