Socialist economy is the economy in which government ownership of resources and elements of production is maintained or no private ownership exists . In this case the ownership of the resources of the country and the elements of production is vested in the whole society or state. In a socialist economy, social or state ownership is established over factories , mines , farms, etc. In a word, the people of the country or the state is the owner of all the resources of the country. In a socialist economy, production , distribution and consumption are regulated by the state or the central planning authority empowered by the state for social welfare . This economy is also called planned economy.