A political system in which the means of production, distribution and exchange are mostly owned by the state, and used, at least in theory, on behalf of the people. The idea behind socialism is that the capitalist system is intrinsically unfair, because it concentrates wealth in a few hands and does nothing to safeguard the overall welfare of the majority. Under socialism, the state redistributes the wealth of society in a more equitable way, with the ideal of social justice replacing the profit motive.

Socialism as a system is anathema to most Americans, although many social welfare programs like Medicare and Medicaid (once derided by their opponents as "socialized medicine") and Social Security are socialistic in effect, since they are controlled by the government and effect a measure of income redistribution that could not happen if market forces were the sole factor in the economic life of society. See also communism; Leninism; Marxism.