To understand 'socialism' and its impact on societies and economies, it's important to look at its foundational principles as well as its implementation and results throughout history. Two essential components of 'socialism' are a 'government-led economy' and the 'equality of opportunities'.
Socialism is a political and economic system in which the state owns and controls the main means of production. In some models of socialism, ownership is done by worker co-operatives and unions. Both models often lead to increased bureaucracy, process delays, and higher taxes because the state as well as workers and managers lack any real incentive to cut costs, improve quality, or provide good customer service due to lack of challenging free-market competitors. They operate under the assumption and assurance that customers will buy their products or services regardless, due to lack of better options in the marketplace.
Equality & Opportunities
Socialism is about relocating resources from the rich to the poor, without regard for anyone's merits or experience. The main goal is to ensure everyone has equal opportunities, including jobs, welfare programs and even university education. This model enables many to rely on welfare government programs, even though they are unproductive or unskilled. The selection criteria based on eligibility is determined by the state and employment is often directed by the state as well, which generally means lifetime employment even if workers are not doing anything essential or not doing anything at all. Lastly, because state employees are protected by law against job termination, many potential qualified people are left behind and cannot apply for state jobs.
Socialism is the Bridge to Communism.
Because of its increasing reliance upon resources, 'socialism' will sooner or later lead to 'communism'. The tremendous burden of increasing taxes and regulations required to maintain the barely minimum governmental programs makes it hard for private companies to survive, so sooner or later many means of production will either be diminished, extinguished or be in the hands of a totalitarian government. Because of that fact, currently there are 2 types of economies that employ some form of 'socialism':
A free-market capitalist system with a moderate socialist government
Privately-owned companies that are efficient in producing goods and maintaining a dynamic economy are tasked with the responsibility to create and maintain market stability by providing jobs and financial resources to fund the ongoing needs of socialist governments, which use progressive taxation and social spending to provide barely minimum common benefits to citizens, which also pay a vast amount of income, retail, property, and other taxes. Countries like France, Germany, Skandinavia, Italy, Canada and Brazil currently use this model. Many public services such as healthcare, public schools and universities are run directly by the government. However, many citizens are left behind and are therefore unable to take advantage of these services even though they pay high amounts of taxes to the government for them. Many end up having to pay for private services, either because the resources are scarce due to increasing demand or because the quality is significantly inferior.
A far-left communist political system
The government controls all means of production, education, media, and even freedom of religion. In this model, shared ownership of resources, lack of private property, and central planning are seen as standard modus operandi. Countries like Cuba, Venezuela, Vietnam, North Korea, and China* are communists. In this model, the government acts in a totalitarian way, controlling all facets of citizens' lives. This is a point of no return, when citizens have lost the battle against totalitarian regimes. This is the most devastating model. Millions of people have died because of communism throughout history.
*China’s growth accelerated after it began its pro-market reforms in the late 70s and 80s
The idea of a purely socialist political system society is debunked by the reality that everything has a cost. For a society to progress and thrive, the means of production and human development need to be established on solid and sustainable foundations that ensure the freedom of citizens to produce and achieve results on an ongoing basis with minimal government regulations. The government should be established by the people, with limited powers and its goal should solely be to help establish laws that protect citizens.
When a government is in charge of all means of production and becomes too big, other areas of life become compromised by its tyrannical character and society becomes a mass of slaves working to serve its government.