Socialism is a socio-economic system characterized by social ownership of the means of production and cooperative management of the economy, as well as a political theory and movement that aims at the establishment of such a system.
"Social ownership" may refer to cooperative enterprises, common ownership, state ownership, citizen ownership of equity, or any combination of these. There are many varieties of socialism and there is no single definition encapsulating all of them. They differ in the type of social ownership they advocate, the degree to which they rely on markets or planning, how management is to be organised within productive institutions, and the role of the state in constructing socialism.
A socialist economic system is based on the precept of production for use, meaning the production of goods and services to directly satisfy economic demand and human needs where objects are valued based on their use-value or utility, as opposed to being structured upon the accumulation of capital and production for profit. In the traditional conception of a socialist economy, coordination, accounting and valuation would be performed in kind (using physical quantities), by a common physical magnitude, or by a direct measure of labor-time in place of financial calculation. On distribution of output there have been two proposals, one which is based on the principle of to each according to his contribution and another on the principle of from each according to his ability, to each according to his need. The advisability, feasibility and exact methods of resource allocation and valuation are the subject of the socialist calculation debate.