Q. 34.0( 4 Votes )

Write a paragraph comparing the ideas of capitalism and socialism. How were they similar or different?

Answer :

Capitalism and socialism are systems of ideas and ideals, especially one which structure the basis of economic or political theory and policy. Capitalism and socialism are compared based on the following aspects:


1) Justice: The capitalist economy is carefree about equity and justice (in the sense of equality).


• The capitalists argue that inequality is a powerful force that promotes innovation, which then results in economic development.


• The primary concern of socialism is an impartial redistribution of wealth and resources from the rich to the poor.


2) Ownership


• In a capitalist economy, property and businesses are owned and controlled by individuals.


• In a socialist economy, the state owns and controls the major means of production.


3) Efficiency


• In capitalism, profit incentive leads to innovation of new products that have demand in the marketplace.


• It is argued that in socialism, the means of production leads to inefficiency because, without the motivation of earning more money, management, workers, and developers are difficult.


4) Employment


1) In a capitalist economy, the state does not directly employ the workforce. This can lead to unemployment.


2) In a socialist economy, the state is the most important employer. During times of economic suffering, the socialist state can order new take on.


Capitalism is the ancient political system, whose origin dates back to 1400 AD in Europe. Socialism was evolved in France from 1800 AD. The combination of the two economies is the best for any society. The mixed economy accepts the merits of both the systems.


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