What is the difference between capitalism and socialism?

Capitalism is an economic and political system in which individuals own economic resources and industry, while under socialism, the state plans and produces goods, and either own or redistribute resources among its citizens. In the capitalist economy, the political system emphasizes competition for resources as a means of increasing capital (or wealth) and the development of personal success. In the socialist economy, emphasis is placed on the distribution of wealth, so individual needs are satisfied with collective capital. There are many different versions of capitalism and socialism, and most modern societies are a mixture of these two.

capitalism

individualism and competition is essential for capitalism. In a purely capitalist society, individuals are responsible for the protection of their own interests on the market and within their communities. The potential success of each individual is also appreciated. People are encouraged to direct their talent in a way that brows, onExample by starting business or entering a highly profitable profession.

capitalism relies on the system of inspections and balance caused by competition. Individuals who own capital can compete with others to provide goods and services on the market; Those who produce and efficiently on the market that are required and are likely to succeed at the price that people want to pay. Similarly, businesses that handle their workers and pay good wages are most likely to attract good employees, which will probably mean success for business. Those who offer lower services or cannot attract good workers will eventually fail and leave the market.

Low taxes are generally the aim of capitalist governments. In addition, government funding of public services, such as social services benefits, is generally maintained to a minimum. Health Care Systemsu also be funded primarily by the private sector, which requires citizens to purchase their own health insurance or rely on employers to provide insurance.

types of capitalism

In theoretically discussed capitalism, it has several unique defining characteristics. In practice, however, the nuance has evolved and, as a result, can be divided into different types:

• free market capitalism : This type of capitalism leaves all aspects of society that is governed by the market, with a small or no government intervention. Here the role of the government is limited to the protection of the lives and property of citizens.
• Corporate capitalism : In this type of economy, the economy is dominated by large bureaucratic corporations. This allows long -term planning and efficiency, but less innovation. Large corporations can also have an equally great influence on the government, leading to Legislation for the protection of the interests of these companies.
• Social DemocraTical or Social Market Economy : This economic system is an attempt to balance the benefits of the free market system with a strong social support structure. While most industries are private, the government is more involved in ensuring that the competition is fair, unemployment is low and social well -being is provided for those who need it.
• State capitalism : In this economy, production means are owned by the government, but runs in a "capitalist" way-what means for profit. The term is also sometimes used to describe the economy in which the government will enter the protection of the interests of enterprises.

socialism

Socialism relies on government planning rather than to distribute resources. Although it is usually possible for individuals living in a socialist country to own business or offer professional services directly to consumers, they are usually severely taxed their profits. Public services are the usualLe numerous and financed by taxpayers' money. Citizens are expected to work, but the government provides services such as education, health care and public transport or at very low costs. Socialist countries also often have extensive social security systems that help unemployed, disabled and seniors.

In addition to paying higher taxes, it is expected that the owners of enterprises in socialist countries will often observe very strict work laws intended to protect workers from exploitation. These laws include limiting working hours and ordering regular holidays, sick time and leaving for many reasons, such as birth or receiving a child. However, it is not expected that employers usually provide health insurance coverage, because medical care is usually provided through national health care systems.

types of socialism

existed a range of socialist political philosophies, including Marxism and reformishim. Marxism, originating in the works of Karel Marx and Friedrich Engels, claims that socialism is a medium point between capitalism and communism, with production means controlled by the workers, but with a state that runs an economy on behalf of workers. Reformism, sometimes called Social Democrats, focuses on a change in capitalist societies from within, through the political process and government reform.

In addition, there are a number of different economic theories of socialism:

• market socialism includes the operation of public or cooperative companies on the free market. Rather than taxing taxes, the government takes all profits and redistributes them to pay employees, financing public institutions and offering social services.
• in the planned economy The government owns the means of production and plans what Wilbud is produced, how much will be achieved and the price for which it will be sold.
• independently managedEconomics depend on collective events of specific groups in decision -making. For example, a self -governing company may be owned by its workers who together decide on the direction of business.
state socialism or state -oriented economies have industries that are owned cooperatively, but which work with some planning or from the government.

Communism

While it is another economic system, many people confuse socialism with communism. Within communism, everything is owned together or everyone. Ideally, there is no government or class division and no money; Every person contributes to society as best as possible and only takes what it needs from this society. The decision of this company should benefit people as a whole, not an individual.

historically countries called "Communist", indeed practiced some formSocialism, usually operated by one political party. The state usually owned all forms of production and practiced very strict central planning - which means that the government has decided how all resources should be used. Many critics claim that most governments called "Communist" are really very different from the real meaning of the word.

mixed economies

very few societies are purely capitalist or purely socialist, although most are stronger than the other. For example, the United States is considered a capitalist society, but a social security system that provides support to people who are unable to work is socialist. Sweden are considered by some people to be a socialist country because of their high tax rate and a large social security system, but most of the industry in the nation is in private hands, which is capitalist.

criticism

criticism of capitalism and socialism largely stems from variousH opinions on how economic forces should shape governments and societies. Some critics believe that the human spirit needs competition to fully develop, while others emphasize the need for people to cooperate and ensure that all citizens' needs are met. There are other critics in every philosophy who disagree with how every economic or political system would work best.

Critics of capitalism note that the market can be unstable and represents the real dangers of the prosperity of those who are not rich or who are otherwise vulnerable. The provision of business owners to determine the conditions of employment and maintaining most profits from their businesses can create rich classes for themselves, which in turn can suppress the freedom of others. These critics also note that a purely capitalist society does not deal with the needs of those who are unable to compose either as owners of businesses or as workers. Without some social support systems such as social securityEnsuring or well -being must, those who cannot work or earn enough money to survive, lead uncertain existence and may be forced to rely on family or private charity for support.

those who criticize socialism observe that severe taxation provides the same social services to discourage all citizens of business owners from innovation and perfection, given that the owner will not personally benefit from his efforts. In addition, when the government is planning an economy, some critics ask if officials and their political advisors really understand what is the best for the country's citizens; Such socialist governments can provide their citizen to choose from deciding what services they really want or need. In addition, capitalist criticism of generous socialist social security programs notes that these programs can discourage people from work, because people can be able to live reassisibly well about government benefits rather than have to do work. The result is thatFamilies can slip into generation poverty because children can grow up for government support.