Difference between Socialism and Capitalism

Introduction

Due to industrialization and technological advancement in production process in economic system. The postindustrial has bring about technological advancements which actually introduce society into different economic system, the method classified society and economic is by determining the question of ownership of property or the so-called means of production and distribution in a particular society. (Eddiefloyd M. Igbo). That is whether the means of production and distribution are publicly or privately owned. When the means of production and distribution are owned by private individuals such economic system is called capitalist society. But in case where it is publicly owned socialist society or socialist economic system.

 Capitalism : Is defined as an economic system of private ownership of capital or means of production and distribution. Eddie Floyd Igbo (2008). That there are two features of capitalism such as

i, It's based on The profit motive.

ii, capitalism encourage competition.

  Socialism: this denote an economic system of purchase ownership of property or means of production and distribution.

Two features can be easily identify.

i. It identify the goals of economic activity as the fulfilment of the social need of the populace.

ii. The socialist regards the pursuits of private profits as immoral and undesirable simply on the ground that one man profit is another loss.

(Basic sociology).

  Both capitalism and socialist share some similarities thus; 

- There is money involved in order to produced any commodity both to capitalist and socialist.

- In principle socialism can exist as a single state coexisting with capital state same about capitalism it can coexist with feudal or socialist state.

- There is scarcity of produced commodities and services in both system, as a result those who is more productive earn more money to each according to their contribution.

- there is state in socialism. It has similar functions

Another aspect of the comparism is the differences that both has these include:

1. Capitalism is the ancient political system whose origin date back to 1400 AD in Europe, while socialism which is evolved from 1800 AD and it place of origin is France

2. A capitalist economy is featured with free market and less government intervention in the economy where top most priority is given to capital. As opposed to a socialist economy the referred to the organization of society which is characterized by abolition of class relation and give more importance to people. 

3. Capitalism encourage innovation and individuals goals while socialism promote equality and fairness among society. 

4. In socialist economy the resources is state own, but in the case of capitalist economy the means of production are privately own. 

4. In capitalist prices are determined by market forces and therefore the firm can exercise monopoly power, by changing price conversely then in socialism, government decide the rate of any article which lead to shortage or surfeit. 

5. In capitalism the competition between firm is very close, whereas, in socialism there is no or marginal competion because the government controls the market. 

REFERENCES

Igbo, E. M. (2008) Basic Sociolog, Enugu. Rhyme Kerex Publisher

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