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Socialism primarily emerged in response to laissez-faire economics, which is characterized by minimal government intervention in the economy and a focus on free-market principles. During the Industrial Revolution, the unregulated market led to significant inequalities and exploitation of workers, as factory owners sought to maximize profits without considering the impact on labor conditions, wages, and overall societal well-being.

Socialism arose as a reaction to these disparities, advocating for collective ownership or regulation of the means of production and a more equitable distribution of wealth. By promoting policies that aimed to address social injustices and prioritize the needs of workers and the working class, socialism sought to create a more balanced economic system that was in stark contrast to the individualistic nature of laissez-faire capitalism.

This understanding of socialism highlights its roots in the socio-economic challenges posed by laissez-faire practices during the rapid industrialization of the 19th century, establishing a clear relationship between the two.