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Socialism v. Capitalism
Capitalism and socialism are schools of thoughts
that different countries adopted to steer their economic enhancement. These
schools of thoughts are opposing strategically concerning the use of resources
and the form of government. For instance, socialists believe economic
inequality is not good and is the role of the government to adopt appropriate
programs that equally benefits the people. These programs include, free or subsidized
public education, subsidized health care, price discrimination (e.g., higher
prices for the rich) (Deakin, Frank, & Wilkinson, 2005). On the other hand,
economists operate under the umbrella of free market whereby private
enterprises are the efficient users of the resources than the government. The
USA is one of the bastions of capitalist economies while Western Europe and
Scandinavia are the socialism giants. However, there are similarities and
differences between these schools of thoughts.
Capitalism and Socialism schools of thoughts apply
completely different economic systems. Capitalism economic systems means of
productions are owned and controlled by private enterprises and private
corporations. While means of productions in socialist economies are communally
owned and rewards are distributed based on individual contribution. These two
schools of thoughts are completely different in their economic systems since
capitalism is a private market- based economy while socialism economy is
coordinated through economic planning or market planning by the government.
Social Structures exists in capitalism school of
thoughts based on the relationship with the property ownership. There are
diminished social classes in socialism school of thoughts since the people do
not control means of productions. However, in these two schools of thoughts
there exist social classes. Socialism social classes are minimal, and they are
generated by politics or power. On the other hand, social capitalism classes
are derived from both property ownership and greed for power (Korstanje M,
2015). In the Capitalism, school of thoughts there is no equity in the
distribution of resources. According to Susan G. (2009), equality is
discouraged since it bars innovation and economic advancement. On the other
hand, equity prevails since there is even opportunities and income through
redistribution of resources from the rich to the poor.
Economic coordination of these two schools of
thoughts varies accordingly. While capitalism school of thoughts relies
principally on market forces to determine investments, capital inflow, and
outflow, socialism relies entirely on market planning and stratification for
economy coordination. Concisely, there are no any similarities on the market
coordination of these schools of thoughts. Capitalism market may be either a
free market, regulate market or combination of this two. However, socialism has
either centralized or decentralized market, which is used in allocating capital
to the enterprises owners.
Capitalism school of thoughts operates under the
rule of," profit incentive"; while socialism operates under the rule
of "state ownership leads to inefficiency". According to capitalists,
profits incentive leads to more productions due to reduced initial cost. On the
other hand, state ownership results to inefficiency in the production of goods
and services since the working group lacks incentives to cut down the
production costs.
In conclusion, there are numerous differences
between capitalism and socialism schools of thoughts. Some of the areas of
concerned above are equality, philosophies, ideologies, key proponents and
property ownership. For instance, capitalists are more concern about property
and power gain as opposed to socialists who aims in pulling of resources
together for communal benefits.
Works
cited
Adit Rao (2015).
Diffen: Capitalism vs. Socialism. Retrieved from www.diffen.com/difference
Deakin, Frank,
& Wilkinson (2005). The Law of the Labor Market: Industrialization, Employment,
and Legal Evolution. Oxford University Press ISBN.
Korstanje, M
(2015) Review: Why Nations fail. The Origins of Power, Prosperity, and Poverty.
Journal of International and Global Studies. Volume 6, Issue 2. May 2015. (pp
97-100).
Susan G. (2009).
Cambridge International AS and A Level Economics Revision Guide.Cambridge
University Press
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