Question

Indicate the demerits of socialism.

Answer 1

Demerits of Socialism:

1. Red Tapism and Bureaucracy:
As decision are taken by government agencies, approval of many officials and movement of files from one table to other takes time and leads to red-tapism.

2. Absence of Incentive:
The major limitation of socialism is that this system does not provide an incentive for efficiency. Therefore, productivity also suffers.

3. Limited Freedom of Choice:
Consumers do not enjoy the freedom of choice over the consumption of goods and services.

4. Concentration of Power:
The State takes all major decisions. The private takes no initiative in making economic decisions. Hence, the State is more powerful and misuse of power can also take place.