Comparison between Capitalism and Socialism

Comparison between Capitalism and Socialism 

Capitalism and socialism are economic systems which where champion by U. S. A.  and USSR (now Russia) especially during cold war era. Momoh (2019), posit that both capitalism and socialism help in understanding world economic system and how it works. These two economic systems describe society in the aspect of industrialization. In other words, they are approaches to industrialization as they varies from society to society. 

What then is capitalism?  

Capitalism as an economic category is a system for earning wealth for wealth sake; it circulate money for the sake of earning more money: investing money in goods, production, technology in machinery and in raw-material so as to earn limitless profit from regions as far away as are the continents. The investment is an attribute of capitalism both at the local level as well as the national level. The more one invests, the more profit one gains and a bigger capitalist one becomes (Aurora, 2010).  In a simple word capitalism is an economic system in which means of production and distribution are own and control by private individual. However,  Adams Smith champion the notion of classical capitalism where he posit that there should be economic freedom (Laissez-faire) – that is give freedom to businessmen he will free the world. Example of capitalist countries include U. S. A, Britain etc. 

What is socialism? 

Socialism is an economic system where all means of production and distribution are own by the society while the whole process of production is conducted through planning. The production are distributed in accordance with what one contributes: from each according to his abilities to each according to his work. There is no private property permitted and there are no market to buy and sell commodities what is own is control by the state through the single official political (communist)  party (Arora, 2010). Examples of socialist countries include USSR (Russia), Norway, Sweden and Denmark

NB: Amadeo (2019), argued that there are no countries that are 100 percent socialist, according to the socialist party of the united Kingdom. Most have mixed economies that incorporate socialism and capitalism or both. 

COMPARISON

1. In capitalism the means of production are own and control by private individual. Whereas, in socialism state controls the economy 

2. There is existential of two classes in capitalism such as class of bourgeoisies (the rich)  and the class of proletariats (the poor or masses). While in average socialism is characterize as classless, there is no richest man nor poorest man in socialist society

3. Capitalism is characterized by exploitation as what will be given to the workers is exploitative in nature, no fairness. However, socialism reward it members each according to his ability and contribution. 

4. Capitalism is labelled,  Laissez-faire; that is none government intervention in an economic system or free economy. Whereas, Government take lead or decision on economic matters or affairs in socialism

5. In capitalism primary roles are played by private property and state property played secondary roles.  While in socialism personal property like houses, clothing etc.  are owned by individuals and public property like factories and means of production are own by the state but worker has control over them. 

6. Capitalist invest in order to maximize their profits at the expense of the laborer. But in socialist economic, needs of the people are made according to their ability. 

7. Capitalist sees economic inequality as good, as that is what will burst economy in the society. Whereas, socialist believe economic inequality is bad for society and government is responsible for reducing it through programs that benefit the poor.  

CONCLUSION 

Capitalism and socialism are contrasted concept because they sought to contradict each other. As capitalism advocate on private ownership, socialism advocate for social or communal ownership. But its important to know that no country in the world practice 100 percent of these economic systems they rather implore mixed economy 

REFERENCES 

Arora, N. D. (2010), political science; for civil sciences main examination. New Delhi: Tara McGraw Hill Education private limited

Justin, A. (2018),  capitalism vs socialism differences, advantages/disadvantages and the underground economy. Retrieved form study.com

Momoh, O.  (2019) capitalism vs. Socialism :what is the difference? Retrieved from investopedia.com