The term socialist system refers to a type of economic organization whereby resources are owned by the entire population and do not give rise to private ownership. Throughout the 20th century there was a current that tried to give a greater share to the state in the market economy and, by extension, received the qualification of socialism. However, strictly speaking, socialism is characterized by limiting private property to the extreme and trying to plan the economy from a centralized point of view.
The first theorist who characterized socialism as a system was Karl Marx. He supported his economic and social theory with some concepts drawn from Hegel’s dialectic . In fact, if for Hegel history was the evolution of the spirit in a process of thesis, antithesis and synthesis; for Marx, this dialectic is given through the material universe and between the different social classes that have appeared throughout history, whose last confrontation would be between the bourgeoisie and the proletariat, finally giving way to a classless society.
In practice, socialism was characterized by collectivizing the various means of production . This approach was criticized by several economists, but perhaps it was only Friedrich Hayek who managed to elucidate the problems of a socialist system more efficiently. Thus, for the Austrian economist, the problem of socialism lies mainly in the fact that it concentrates economic decision-making on a select group, since the large amount of information to be processed precludes the best measures to be taken. In a free economy system, on the contrary, information is processed by all involved members, resulting in greater efficiency and, therefore, in sustainable development. For the economist, any attempt to reduce economic knowledge to the thinking of a group of technicians was an absurd pretension with dire consequences.
This type of view had great influence at the beginning of the 20th century, but over time it was relegated to just a simple decadent example of an alleged rise in values. In fact, history could demonstrate that a market economy, where freedom was respected in the commercial area, was able to produce more benefits than the state that was responsible for running the economy.