Capitalism is based on
individual initiative
and favors market mechanisms over government intervention, while socialism is based on government planning and limitations on private control of resources.
Socialism is an economic and political system under which the means of
production are publicly owned
. Production and consumer prices are controlled by the government to best meet the needs of the people. Capitalism is an economic system under which the means of production are privately owned.
A mixed economic system
is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
In a simplified nutshell, capitalists
want less government ownership
, and socialists want more government ownership. … There is a smattering of socialism mixed into these countries’ economic systems (Social Security, Medicare).
Capitalism and socialism are two different political, economic, and social systems blended together by countries around the world.
Sweden
is often considered a strong example of a socialist society, while the United States is usually considered a prime example of a capitalist country.
Is the USA a capitalist country?
The U.S. is a mixed economy, exhibiting
characteristics of both capitalism and socialism
. Such a mixed economy embraces economic freedom when it comes to capital use, but it also allows for government intervention for the public good.
What are the 3 types of economics?
There are three main types of economies:
free market, command, and mixed
. The chart below compares free-market and command economies; mixed economies are a combination of the two. Individuals and businesses make their own economic decisions.
Communism and socialism are political and economic systems that share certain beliefs, including greater equality in the distribution of income. One way communism differs from socialism is that it calls for the transfer of power to the working class by revolutionary rather than gradual means.
This brand of socialism believes in: …
Redistribution of income and wealth through a progressive tax system and welfare state
. Ownership of key public sector utilities, such as gas, electricity, water, railways. Private enterprise and private ownership of other industries.
| Basis for Comparison Capitalism Socialism | Basis Principle of Individual Rights Principle of Equality | Advocates Innovation and individual goals Equality and fairness in society | Means of Production Privately owned Socially owned | Prices Determined by the market forces Determined by the Government |
|---|
In theory, based on public benefits, socialism has
the greatest goal of common wealth
; Since the government controls almost all of society’s functions, it can make better use of resources, labors and lands; Socialism reduces disparity in wealth, not only in different areas, but also in all societal ranks and classes.
| Country Since Party | People’s Republic of China 1 October 1949 Communist Party of China | Republic of Cuba 1 January 1959 Communist Party of Cuba | Lao People’s Democratic Republic 2 December 1975 Lao People’s Revolutionary Party | Socialist Republic of Vietnam 2 September 1945 Communist Party of Vietnam |
|---|
Capitalist economies use a
free market
that is not controlled by the government to let private businesses and people determine the value of products. Socialist countries use a planned economy in which the government controls the production and distribution of necessary goods and services.
How is capitalism bad?
Capitalism is bad.
Capitalism ignores peoples’ needs, results in wealth inequality
, and does not promote equal opportunity. Capitalism also encourages mass consumption, is unsustainable, and provides an incentive for business owners to harm the environment for monetary gain. Capitalism is also ineffective and unstable.
One similarity between capitalism and socialism is that
both systems consider labor and capital to be the primary economic forces
. Both capitalism and socialism agree that the world is composed of a variety of natural resources that are for the most part value-neutral until human labor imparts value to them.
Capitalism affords economic freedom, consumer choice, and economic growth
. Socialism, which is an economy controlled by the state and planned by a central planning authority, provides for a greater social welfare and decreases business fluctuations.
