Pros And Cons Of Capitalism And Socialism

What is capitalism?

Before we begin discussing our topic for today, we need to have a clear understanding of what the term “capitalism” stands for. Capitalism is an economic system of a country where private individuals or group of individuals are allowed to setup and run their own businesses where they control and decide the operations of the business and different companies compete for their own economic gains and free market forces determine the prices of goods and services. Such systems aim to separate the state activities from business operations.

How does it work?

Capitalism makes the country a free market economy where private companies take all the important decisions about their businesses themselves to earn profit and hence competition

This would include health, education. Socialism creates a more equal society. However it reduces the incentive to work hard because you no longer have the ability to gain wealth and ownership the way you do in capitalism. This would also likely reduce the efficiency and effectiveness of economy overall leading to poor living standards. Full socialism has never been successful in the past.

Socialism and Communism

Socialism and communism are alike in that both are systems of production for use based on public ownership of the means of production and centralized planning. Socialism grows directly out of capitalism; it is the first form of the new society. Communism is a further development or "higher stage" of socialism.

The socialist principle of distribution according to deeds, that is, for quality and quantity of work performed, is immediately possible and practical. On the other hand, the communist principle of distribution according to needs is not immediately possible and practical, it is an ultimate goal.

Early

In socialism, people make collective decisions as to what the directions of the social and economic progress should be, and then empower their representatives to implement them. In capitalism, the sum of the actions of free individuals is considered the best for the society as a whole, and the government should accommodate these private actions and should not have any ideological agenda as to what the directions of the social and economic progress should be. The Marx quote that “The philosophers have only interpreted the world, in various ways; the point is to change it” is interpreted by socialists as the moral base for the organized society to identify the desired direction of progress and forcefully apply necessary policies to achieve this goal. Supporters of capitalism believe that philosophers should not go beyond interpreting the world, and that the organized society should not establish any policies shaping the future, that the progress should be whatever happens as a sum of the actions of