Market socialism refers to various economic systems in which the government owns the economic institutions or major industries but operates them according to the rules of supply and demand. A conceptual worker who is not satisfied with his income can threaten to work for a company that will pay him more, thus class divisions arise.[
In a traditional market socialist economy, prices would be determined by a government planning ministry, and enterprises would either be state-owned or cooperatively-owned and managed by their employees, but compete with each other in the same way private companies compete.
Libertarian socialists and left-anarchists often promote a form of market socialism in which enterprises are owned and managed collectively by the workers in a capitalist market. The People's Republic of China currently has a form of market socialism referred to as the socialist market economy but prices are not set by the government.
Within this model, the state-owned enterprises are free from excessive regulation and function more autonomously in a more decentralized fashion than in other socialist economic systems. The social market economic model is based upon the free market economy, combined with regulative measures from the state.