text: under this system the government owns nearly all the means of production and direct all important economic?   to be more specific and accurate, this should be called "state socialism," so as to differentiate it from other forms of socialism that do not require or call for government ownership and control of the means of production.  simply calling it "socialism" is too vague.  there are a range of examples in the history of the last century of state socialism, but the most prominent would be the soviet union, as well as its satellites and allies in eastern europe.  china is currently the most obvious example of this system, though it is evolving toward a mixed system of state control and free markets.  the links below will help sort this out.  be warned that the first wikipedia link is not well written, and offers no sources.  the second is much better, but offers a much broader definition.  the pbs link is especially valuable for its timeline.  the fourth link, to the concise encyclopedia of economics, is well written, but highly negative, and a number of people would disagree with heibroner's definitions, but it is still valuable.