Following are the flaws of the socialist economy :
- Lack of personal motivation : Personal benefit and right of owning private property are such elements which motivate an individual to work harder. Both these elements are absent in socialist economy. Nowadays, new experiments are being conducted in socialist economy to overcome this drawback.
- Lack of productivity and skillfulness : In capitalist economy, the major objective of the producer is accruing maximum profits. Therefore, he makes efforts to maximize production at minimum costs, but in socialist economy, neither the sources are distributed for maximizing profit, nor the motivation of personal benefit exists, due to which, lack of productivity and skillfulness is found here.
