Is Good Socialism Still Possible in the 21st Century?

People ask whether “good socialism” still feels possible in the 21st century in much the same way they ask whether eating well is realistic in a city full of bakeries. There is hope in the question. At the same time, there is dread. Everyone has seen a few spectacularly bad examples, and yet most of us still rely on at least one quietly socialist thing before breakfast.

In Britain, for example, plenty of people who flinch at the word “socialism” will still defend the NHS with surprising ferocity. They will also accept state schooling, libraries, public parks, road markings, fire brigades, and the small miracle of clean water arriving without a personal negotiation with a water baron. Meanwhile, many people who proudly call themselves socialists still book holidays through private companies, buy coffee from global chains, and enjoy phones that turn on because a global supply chain decided it was worth the effort. So, the honest starting point is slightly awkward and faintly funny: most of us already live in hybrids, and we argue about the proportions.

That is precisely why the question refuses to go away. It is not really “socialism: yes or no?” Instead, it is “which bits should we do together, which bits should we leave to markets, and how do we stop the whole arrangement being captured by the worst people in the room?” That final point matters, because both states and markets can develop a taste for nonsense when nobody is watching them closely.

Even the word “socialism” behaves badly. It is like a suitcase at an airport. Everyone agrees it exists, yet nobody agrees what is inside. Some people pack Scandinavia into it: high taxes, strong public services, competitive firms, and a level of calm competence that makes other countries feel as though they are improvising. Others pack the Soviet Union: central plans, shortages, secret police, and an economy that could build a rocket yet struggled to deliver decent shoes. Others still pack worker co‑operatives, municipal power companies, and climate policy. Then, inevitably, someone packs Venezuela into it, shakes it dramatically, and declares the whole suitcase cursed.
So rather than arguing with a ghost, it helps to split the modern conversation into the camps that actually exist.

One camp says “good socialism” simply means social democracy. In this view, markets stay. Private ownership stays. However, the state grows large enough to provide universal services, reduce inequality, and insure people against life’s favourite surprises. This is the Scandinavia‑and‑friends argument, and it often feels less like ideology and more like a practical shopping list.
Another camp replies that social democracy is not enough. It patches capitalism but leaves ownership and power largely untouched, which allows inequality to creep back through inheritance, housing, and financial assets. This is where Thomas Piketty’s work sits. In Capital in the Twenty‑First Century, he argues that when returns on capital exceed economic growth for long stretches, wealth piles up and democratic life starts to wobble. As a result, stronger redistribution and new ownership models re‑enter the discussion.

A third camp argues that markets can survive without traditional capitalists, or at least with far fewer of them. It looks to worker ownership, co‑operatives, and market socialism, where firms still compete but workers and communities keep more of the gains. Mondragon in the Basque Country often appears here as a mascot: a vast co‑operative network that operates inside global capitalism while trying to preserve workplace democracy. The argument is simple. Let competition do some of the information work, then share ownership so success does not turn firms into tiny monarchies. Critics respond that co‑operatives still face brutal market pressures and still make compromises when survival is at stake.

A fourth camp remains sceptical of the entire project. It argues that socialism, in practice, tends towards state dominance whether it admits it or not. Supporters of this view point to authoritarian examples and warn that once the state controls enough of the economy, it often controls the rest of society as well. They also lean heavily on Friedrich Hayek’s knowledge problem. Hayek argued that economic information is dispersed among millions of people and changes constantly. Prices, in his view, act like a real‑time messaging system. A central planner cannot gather or process that knowledge fast enough. Even with good intentions, the system falls behind reality.

That sets the chessboard. Then the 21st century begins to interfere.
Over the past two decades, capitalism has collected a few very public PR disasters. The 2008 financial crisis showed how privately engineered risk can quickly become a public rescue operation. Austerity politics then made public services feel like optional extras rather than foundations. After that, the pandemic forced governments to spend on a scale once considered unthinkable. More recently, energy shocks and supply‑chain chaos reminded everyone that markets do not always self‑correct before winter arrives.

At the same time, state power has not exactly inspired universal confidence. People have watched corruption corrode institutions and democratic norms weaken. Consequently, many voters feel uneasy about handing even more responsibility to political systems they already distrust.
So modern socialism operates inside two major constraints.

First, the economy has become increasingly intangible. Value now comes from software, data, intellectual property, and platforms that behave like private governments. When companies influence what people see, how they work, and how they socialise, traditional regulation starts to look outdated. This pushes some thinkers towards stronger public ownership, tougher competition policy, and new forms of state capacity.
Second, the climate transition demands coordination. Decarbonising energy, transport, housing, and industry looks less like a set of consumer choices and more like a collective mission. This is where Mariana Mazzucato’s work enters the conversation. She argues that the state has often played an entrepreneurial role in innovation, taking early risks while private firms later collect profits. From this perspective, the state should actively shape markets rather than merely fix failures.

However, critics quickly raise an eyebrow. Mission‑driven policy can become an excuse for waste, capture, and grand delusions. Academic critiques warn that governments often overestimate their competence and extrapolate from a few historical successes. In short, the state can innovate impressively, yet it can also burn money with remarkable confidence.
This tension reveals the core issue. Good socialism depends on good state capacity. If institutions cannot deliver competently and honestly, expanding their role feels like inviting disappointment.

Inequality then pours fuel on the debate. Piketty helped popularise the idea that capitalism does not merely produce inequality by accident. Instead, it drifts towards it unless politics pushes back. You can see this anxiety everywhere in housing markets and inheritance patterns. When assets rise faster than wages, society begins to feel like it runs on family wealth rather than effort.
As a result, wealth taxes keep resurfacing. Even centrist policymakers have flirted with the idea. Discussions among G20 finance ministers about taxing billionaires, supported by economists like Gabriel Zucman, illustrate how far the conversation has moved. Whether such taxes ever work in practice remains uncertain, given the ingenuity of tax avoidance. Still, the shift itself matters.

Yet taxation is only half the argument. Spending, and how it is done, matters just as much.
This is where the modern defence of socialism becomes concrete. Instead of promising a grand new order, it promises a better floor. Universal services, strong public provision, and risk‑sharing systems aim to prevent one bad year from becoming a lifetime slide.

Universal Basic Services fits neatly into this thinking. Rather than handing out cash, UBS focuses on collectively providing essentials: healthcare, education, childcare, transport, housing support, care services, and digital access. Economists such as Ian Gough have argued that this approach meets shared human needs more directly and sustainably. International policy discussions, including those involving UNESCO, have contrasted UBS with Universal Basic Income, often noting that services feel more politically durable.
Naturally, disagreements persist. Some on the left argue that UBS does not change ownership or power. Some UBI advocates counter that services alone cannot fix punitive welfare systems or broken housing markets. Meanwhile, many centrists quietly prefer UBS because it feels like renovation rather than revolution.

So why does the argument remain so heated? Because the failures are real. Venezuela remains the most cited warning. Its economic collapse produced one of the sharpest peacetime declines in living standards on record. Analysts point to a combination of oil dependence, mismanagement, corruption, and later sanctions. Supporters of socialism argue that this was never a clean experiment. Critics respond that systems should cope with messy reality, not require perfect conditions.
The Soviet legacy also continues to shape emotions. Even when nobody proposes central planning, opponents treat any expansion of public ownership as a slippery slope. Supporters reply that this is historical paranoia. Nevertheless, the memory of repression and stagnation still carries weight.

China complicates matters further. It combines state power with market participation and labels the result socialism. Some see proof that state direction can deliver growth. Others see state capitalism with ideological branding. Either way, it resists simple categorisation.
Against this backdrop, the Nordic countries remain the strongest real‑world evidence for something resembling good socialism. These systems rely on high taxes, extensive welfare provision, strong labour institutions, and broadly trusted public services. At the same time, they retain competitive markets and private enterprise.

Importantly, they also innovate. Research from organisations such as the OECD shows that Nordic economies produce scale‑ups that contribute meaningfully to job creation. Welfare states, in this context, do not automatically smother dynamism.
Critics still object. They argue that Nordic success depends on small populations, high trust, and strong institutions. Supporters reply that this is not a weakness but the lesson. These systems evolve continuously rather than freezing in place.

At this point, an awkward truth emerges. The best examples of good socialism rarely call themselves socialist at all. They call themselves competent government.
That reframes the question. The issue is not whether socialism can be good. The issue is whether collective governance can work.

That test is partly administrative. Can the state deliver? Can it regulate complex markets without capture? And can it build infrastructure without chaos?
It is also political. Can democracy sustain high taxes when services work, and reform when they do not? Can it resist the temptation to turn public spending into patronage?

When these tests fail, even mild social democracy becomes brittle. When they succeed, ambitious public programmes feel normal.
So yes, good socialism remains possible. It looks like markets where they work, public provision where they do not, and democratic constraints strong enough to prevent power hoarding. It treats socialism as a design problem rather than a purity ritual.

However, it remains impossible as a promise of perfection. No system escapes politics or human weakness. Every society writes rules. The only real choice is who writes them, and who they serve.