Both the terms Capitalism and Socialism are the two major economic systems in use today in developed countries. The primary distinction between Capitalism and Socialism is the degree to which the government controls the economy.
What is Capitalism??
Capitalism is based on private ownership of the means of production and free play of the market in determining what is to be produced and who is to be given a share of the produce. Socialists complain that capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of relatively few.
The rich then use their wealth and power to reinforce their dominance in society. Because such people are rich, they may choose where and how to live, and their choices in turn limit the options for the poor. As a result, terms such as individual freedom and equality of opportunity may be meaningful for capitalists.
Capitalism has three different phases which are as follows:
- Early period
- Middle period of capitalism ( Mercantile capitalism)
- Later period of capitalism ( Industrial capitalism)
What is Socialism??
Socialism is a doctrine that calls for public rather than private ownership or control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another.
Further, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members. In this way, socialism contradicts the basic idea of capitalism.
Difference Between Capitalism and Socialism:
|Capitalism is based on private ownership of the means of production.||Socialism is based on public rather than private ownership or control of property and natural resources.|
|It is a free play for the market in determining what and who to produce and share to produce. Capitalism is proposed by evolution.||Socialism is proposed by Robert Owen/.|
|Capitalism is a type of social system that follows the belief in individual rights.||Socialism is the social ownership of means of production, the impartiality of income, and opportunities for all members and is according to effort and contribution.|
|It is a free play for the market in determining what and who to produce and share to produce.||In a socialist economy, the government has ultimate power.|
|The tax is limited||Socialism is progressive.|
So when we compare, we understand that both capitalism and socialism are purely different and these are followed by the developed countries. They have different perspectives in their own ways.