As a doctrine, socialism developed from the ideas of Marx and other radical thinkers of the nineteenth century. Socialism is a middle ground between laissez faire capitalism and the central planning model. A few common elements characterize most socialist philosophies:
1. Socialists traditionally believed that the role of private property should be reduced. Key industries such as railroads and banking should be nationalized.

2. Socialists are suspicious of the chaos of the marketplace and question the allocational efficiency of the invisible hand. They insist that a planning mechanism is needed to coordinate different sectors.

3. Inherited wealth and the highest incomes are to be reduced by the militant use of government taxing power; in some West European countries, marginal tax rates have reached 98 percent.

4. Socialists often advocate the peaceful and gradual extension of government ownership evolution by ballot rather than revolution by bullet.

Over the last decades socialists approaches have waned with the fall of communism, the stagnation in Europe and the success of market-oriented economies. Thoughtful socialists are combing through the wreckage to find a future role for this branch of economic thought.