Socialism vs capitalism
Socialism is a form of economy that works for equality among the members of society by grouping the resources of people so that they are collectively controlled by the state or the public through communes or councils. There is no market in a socialist economy and, therefore, there is no competition. The quantity of products produced and distributed is regulated, including the price that the consumer will pay for the products.
Capitalism, on the other hand, is an economic and political system that is based on the principle of individual rights. He believes that inequality will encourage people to be more innovative and productive. The resources in a capitalist society are the private property of individuals or groups of individuals. These people or groups of individuals freely trade in a market that has equal conditions. The government remains in the background and allows the forces of supply and demand to operate freely with the guidance of laws and regulations. The law of supply and demand states that if the supply is greater than the demand for a particular product, the price of that particular product will decrease. On the contrary, the price of a basic product increases if there is less supply than demand.
In socialism, wealth or goods and services are distributed to people based on the contribution of an individual’s work to produce that wealth. Socialists believe that if people work for the good of all in society and receive all goods and services, the work ethic will increase.
People, on the other hand, have the same opportunity to work for their own individual wealth in a capitalist society. It is assumed that individuals are naturally competitive. It is their competitiveness that will drive them to improve. Individuals or groups of individuals in a capitalist society decide on the quantity, quality and price of the goods they will produce and sell in a competitive market in order to obtain the amount of wealth they desire. No limits are set on what an individual can earn. This resolves people who have a different social status based on the wealth they have accumulated. Therefore, there are rich and poor people in a society.
1. Socialism is an economic system based on the principle of equality while capitalism is an economic and political system based on the principle of individual rights.
2. In socialism, wealth or goods and services are shared equally by all members of society in terms of the productive efforts of the individual, while in capitalism, each individual works for their own wealth.
3. Socialists believe that an individual’s work ethic will increase if he receives the goods and services he needs when he works for everyone else, while the capitalists believe that it is the nature of man to be competitive that will drive him to work more for more wealth.