Glossary of Systems

This glossary gives brief, plain-language definitions of the systems and terms used across the site, each with a few real-world examples and honest classification notes. It is a quick reference. For the fuller, authoritative treatment of the five core systems, democratic socialism, social democracy, socialism, communism, and the mixed economy, see the taxonomy, which this glossary is kept consistent with. We abbreviate democratic socialism as DemSoc after this first mention. Entries are listed alphabetically.

Codetermination

Codetermination is a system in which workers have a legally guaranteed voice in company decisions, typically by electing some members of a company's board or through works councils. It operates within a market economy and does not transfer ownership to workers; it shares decision-making power. Democratic socialists often cite it as a concrete form of economic democracy, though it is a mainstream feature of several capitalist economies rather than a socialist program in itself.

Germany, where large companies reserve board seats for worker representatives.
Several other European countries with works-council systems.

Communism

In Marxist theory, communism is a stateless, classless society in which the means of production are held in common. In common usage, the word refers to the one-party, centrally planned states governed by communist parties in the twentieth century. The gap between the theory and those states is large, and democratic socialists point to the one-party structure of those states as the key thing DemSoc rejects. See the taxonomy for the fuller treatment.

The Soviet Union, Maoist China, and Cuba, each a one-party state.
Present-day China is often classified as state capitalism rather than communist in the theoretical sense.

Corporate capitalism

Corporate capitalism describes a capitalist economy in which large corporations dominate economic activity and, often, political influence. Ownership is private and markets are central; the defining feature is the scale and power of corporations relative to small businesses, workers, and sometimes governments. The term is descriptive and is used by commentators across the political spectrum. The informal term "corpo-capitalism" is sometimes used as a colloquial synonym, but we use corporate capitalism as the primary term.

The United States is frequently described this way, given the economic weight of its largest corporations.

Crony capitalism

Crony capitalism describes an economy in which business success depends heavily on close relationships with government officials, through favoritism, special subsidies, protective regulation, or corruption, rather than on open competition. It is generally used as a criticism, and it can be applied to otherwise different systems whenever political connections, rather than markets or public accountability, decide who profits.

Applied to specific sectors or governments across many countries rather than to a whole national model.

Democratic socialism

Democratic socialism (DemSoc) is a political tradition that combines democratic government and civil liberties, treated as non-negotiable, with the goal of extending democratic control into the economy through some form of social ownership. It spans a range from expanding worker cooperatives within a market economy to public ownership of major industry, and it defines itself against one-party authoritarian states. For the authoritative definition and comparisons, see the taxonomy and the introduction.

No uncontested national example; proponents point to specific institutions, such as worker-cooperative networks.

Market socialism

Market socialism is a family of models in which firms are socially or cooperatively owned but still buy, sell, and compete in markets, rather than being coordinated by central planning. It is an attempt to combine social ownership with the information and incentives that markets provide, and it is a major strand within socialist thought. A fuller treatment is planned for the theory section.

Large worker-cooperative federations are often cited as partial, real-world approximations.

Mixed economy

A mixed economy combines private enterprise with government provision, public ownership of some sectors, and regulation. By this broad definition nearly every modern economy is mixed, so the meaningful question is how much the state does and in which sectors. See the taxonomy for the fuller treatment.

The United States, the United Kingdom, France, Germany, and Japan, with different balances between public and private.

Nationalization

Nationalization is the transfer of a private industry or company into public ownership, usually run by the state. It is a policy tool rather than a complete system, and it has been used by governments of many political stripes, including for railways, utilities, and banks, especially during crises. Democratic socialists may favor nationalizing certain sectors, but nationalization by itself does not make an economy socialist.

The United Kingdom nationalized several major industries after 1945 and later privatized many of them.
Many governments nationalized or rescued banks during the 2008 financial crisis.

Socialism

Socialism is the broad umbrella term for systems and ideas in which the means of production are, to a significant degree, socially rather than privately owned and are run for public benefit rather than solely for private profit. It includes both democratic and authoritarian forms in history, which is why more specific terms are needed. See the taxonomy for the fuller treatment.

Because it is an umbrella term, examples range from democratic labor movements to centrally planned one-party states.

State capitalism

State capitalism describes an economy in which the state plays a leading role as an owner or director of enterprises, but those enterprises still operate on a for-profit, market basis, often competing internationally. Ownership may be public, but the logic is commercial rather than aimed at social ownership or worker control, which is what distinguishes it from socialist models.

Present-day China is frequently classified as state capitalism.
Some oil-exporting states with large state-owned companies are also described this way.

Welfare state

A welfare state is a system in which the government provides for the economic and social well-being of its citizens through programs such as public healthcare, pensions, unemployment insurance, and education. It describes a set of government functions, not a form of ownership, and welfare states exist across a wide range of otherwise capitalist economies. A strong welfare state is central to social democracy and is favored by democratic socialists, but on its own it does not make an economy socialist.

Most wealthy democracies operate welfare states of differing sizes and designs.

Worker cooperative

A worker cooperative is a business owned and controlled by the people who work in it, usually on a one-member, one-vote basis rather than in proportion to money invested. Worker cooperatives operate within market economies and can exist under any broader system, but democratic socialists often highlight them as a practical, existing form of economic democracy and social ownership at the level of the firm.

The Mondragon federation in Spain is the most cited large-scale example.
Worker cooperatives operate in many countries, usually as a small share of the economy.