1. Promotion of Mediocrity:
This kind of economic system promotes mediocrity as government
positions are filled on political consideration rather than ability. Hence, government operations are inefficient.
2. Lack of Incentive to Hard Work: Another defect of socialism is
that it takes away the element of entrepreneurial risks or incentives that
motivate business people. This is
because, under socialism, people who work hard and prosper must share with
those who don’t work so hard or don’t have such well paying jobs.
3. Higher
Unemployment Rates: Socialism has failed to create the wealth or jobs
characteristics of capitalism. As a
result, unemployment rates are comparatively higher in socialist countries.
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