Capitalism and Socialism are both economic systems used throughout many countries. Capitalism and Socialism have been debated throughout political history. Capitalism economic system involves trade and industry are controlled by private owners. Capitalism also has little to no government regulations. On the other hand, Socialism is the opposite. Socialism involves the means of production being owned by the community. Compared to Capitalism, Socialism has much more government regulations. Capitalism and Socialism are ideologies used to lead nations into economic prosperity.
Capitalism is one of the most used economic systems in the world. Capitalism is also known as “Free Market Economy” or “Free Enterprise Economy”. In 1776, Adam Smith laid out the principles of capitalism. Adam Smith believed in “The Invisible Hand”. “The Invisible Hand” prompts competition, supply and demand, and self-interest. Laissez-faire is also another word to describe capitalism. Laissez-faire means letting things take its own course without interference. Capitalism is about an individual owning their labor without government regulation. However, a nation who’s completely capitalist can lead to problems. Capitalism has little government regulations which can lead to monopolies. Monopolies are large corporations which buy smaller corporations and eliminate competition. This happens due to the lack of government regulations. Capitalism also doesn’t promote equality of opportunity. Distribution of wealth isn’t equal. It isn’t equal because only the top 1% benefits. Aslo, inequality limits diversity. Despite these factors, many countries still use Capitalism. An example of this is Hong Kong. Hong Kong is one of the most capitalist countries in the world. Their economy depends on trade, and so companies take advantage of this. Due to this, many companies make their wealth. A politician who is considered a capitalist is Barack Obama. Barack Obama stated “the world is more prosperous than ever before and yet our societies are marked by uncertainty and unease… it is important to remember that capitalism has been the greatest driver of prosperity and opportunity the world has ever seen”. Obama believes capitalism is the solution for the US economy to prosperity. Capitalism is what makes the US be the land of the free. Individuals are able to obtain their own wealth and prosper. Capitalism is fundamental to a society but can also have its drawbacks.
Socialism is the economic system which involves ownership by the community. Socialism focuses on the community rather than the individual interest. The community owns the means of production and distribution of goods. The idea of Socialism dates back to ancient Greek times. Famous philosopher, Plato, discussed a society which worked as a collective. He believed working as one can lead society into prosperity. In 1848, Karl Marx became the most influential theorist of Socialism. In The Communist Manifesto, he discussed how workers suffered under capitalism. He pitted workers of production because they didn’t belong to themselves. All the workers did was work for minimum wage and others got rich. Marx also believed a man should become one with the world. Socialism allows individuals to own property. However, industrial productions are managed by chosen elected governments. Socialism is also a more flexible ideology. As of 2019, no country is precisely considered to be Socilaist. However, politician Berine Sanders is considered a Democratic Socialist. As a Democratic Socialist, he believes in universal healthcare. He believes in taxing the rich more, in order to distribute wealth. He also believes in breaking apart corrupt large corporations. He believes in cancelling student and medical debt. However, Socialism can slow down the economy. It slows down the economy because there is a lack of competition. Also, many people would lose personal profits. Socialism is an ideology which represents equality. However, Socialism requires personal sacrifice.
On the economic spectrum, there are three categories. On the left spectrum, lays Communism, which involves complete government control. In the center lays Social Democracy/Socialism, which involves some government regulations. Capitalism, on the right side, involves little to no government regulations. Both Socialism and Capitalism have government some government regulations. In a Capitalist world, a lot of competition exists. But in a Socilaist society, competition doesn’t exist. Capitalism encourages individual rights. Socialism encourages rights of a community. Both believe in labor and capital (money) keeps the economy flowing. Socialism and Capitalism have social classes. However, in a Socilaist society, the classes don’t oppress each other. Socialism would require high taxes and the economy would run slow, for awhile. Capitalism depends on the law of supply and demand. Under Socialism, poverty would be eliminated. Socialism grants the government more power than Capitalist society. Capitalism grants their citizens more power than the government. Socialism and Capitalism have similarities and differences which help their perspective economy.
Capitalism is about ownership and competition. Socialism is about community interest and ownership by the government. Capitalism is about competition, self interest, and little government regulation. Capitalism creates a huge gap between social classes. However, it gives citizens the freedom to create their own business. They are also entitled to their own profit. On the other hand, Socialism is the opposite. Socialism equality and government regulation. Socialism tries to eliminate the gaps between social classes. Despite these differences, Socialism and Capitalism share similarities. The end goal for both is to have a prosperous economy. Both use different tactics but both can work if done correctly. The economic system is very complex but when done correctly, prosperity thrives.
