Capitalism vs Socialism
Capitalism and socialism are economic and political systems with contrasting principles. Capitalism is characterized by private ownership of the means of production and a free market economy, where individuals and businesses compete for profit. In contrast, socialism advocates for collective or state ownership of resources and a planned economy, aiming to reduce inequality and provide for the welfare of all citizens.
5 Key excerpts on "Capitalism vs Socialism"
eBook - ePubWealth, Welfare and the Global Free Market
A Social Audit of Capitalist Economics
- Ibrahim Ozer Ertuna(Author)
- 2016(Publication Date)
- Gower(Publisher)
...The important point is that the relevant puzzles of how to produce and how to share have not been solved, and their complete solution is not expected. People and societies are in constant search of solutions to the dilemmas of how to produce and how to share. In fact, it is what they should be doing. Now we want to concentrate on the economic systems that were popular and widely applied in the twentieth century, that is, the capitalist and socialist systems. Today, the favored economic system, which is spreading all over the world with an assertion that it has no rival or alternative, is the capitalist system. Capitalism Broadly speaking, capitalism is an economic system in which some people own the capital or “means of production”, and the ownership of capital grants them the right to run the company in their own interest, that is, that of the capitalist owner. In capitalist market economies, companies acquire the labor they employ from the labor market, the funds they need from the capital markets, and the raw materials they use in the production from the product markets; they sell the products they produce in the product markets. Companies are managed in the interest of the capitalist owners, in most of cases to maximize their profit. Capitalism believes in private initiative and entrepreneurship. Entrepreneurs, acting in their own interests, try to maximize their gains by competing with others. These entrepreneurs provide the dynamism of the capitalist system. Their desire to maximize their individual profits results in serving society by providing economic growth. In the competitive environment, each entrepreneur must develop a comparative advantage over the others. Through these comparative advantages, they are able to serve their customers better. All this ensures that capitalism fuels overall economic development and serves the well-being of society...
eBook - ePub- Gregory Claeys(Author)
- 2013(Publication Date)
- CQ Press(Publisher)
...Jason N. Brock Jason N. Brock Capitalism Capitalism 112 115 Capitalism Capitalism is currently the world’s predominant economic system and, in the most basic terms, can be defined as the process of investing money in the expectation of making a profit. There is, however, no single model of capitalism, and a number of forms presently exist or have historically existed. This diversity creates some difficulties when it comes to defining the limits of capitalism, although there are common features. Of particular note are the use of the market as a mechanism, which may be free or regulated, and the existence of private property rights of some kind. Both market regulation and property rights can be affected by political considerations in different countries. Capitalism has particularly been associated with liberalism, especially the variants advocating little or no regulation of markets. Other ideologies, including some versions of socialism, also engage with capitalism and capitalist principles, albeit often within a different intellectual framework. The principle of economic freedom is generally linked to capitalism and some commentators, most notably Milton Friedman, have argued the case for considering capitalism as a prerequisite of political and personal freedom. Conversely, other political ideologies, such as Marxism and libertarian socialism, are heavily critical of capitalism and consider it to lead to exploitation, reduction of freedom for the majority, and inequitable outcomes. History of Capitalism The earliest incarnation of capitalism that is readily recognizable by modern standards is mercantilism. Historical attention around mercantilism has gravitated toward the experience of British, Dutch, Spanish, and Portuguese activities, as these were the dominant seafaring powers between the sixteenth and eighteenth centuries...
eBook - ePubCentrally Planned Economies
Theory and Practice in Socialist Czechoslovakia
- Libor Žídek(Author)
- 2019(Publication Date)
- Routledge(Publisher)
...Competition is typical of production of goods based on private ownership of the means of production. In capitalism, competition is characterized by capitalists competing for higher profit. In socialist economic systems, which are based on nationalized ownership of the means of production, competition cannot exist. (Procházka 1962–1967, p. 593) Competition was considered as wasting of sources for non-productive activity instead of concentrating on real production (Teplý 1976). The socialist economy textbook quoted Lenin: Capitalism is inconceivable without competition and anarchy in production, and the consequent waste of social labour; and in the same way socialism is inconceivable without planned development of the national economy, which enables social labour and its products to be utilised rationally and economically. (Academy of Sciences of the U.S.S.R. 1957, p. 398) Instead of (capitalist) competition, socialist competition was expected to develop: “It is a communist method of building socialism, which is based on maximal activity of the millions” (Stalin 1953, p. 113). Rozental’ defined socialist competition as “demonstration of conscious, creative initiative of the working masses building a new, communist society” (Rozental’ and Judin 1955, p. 455). Banking and non-monetary economy Already Marx and Engels believed that the state should fully control money and credit. One of the requirements in the Communist Manifesto was this: “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly” (Marx and Engels 1969). Dolež alová adds that banks were supposed to be just a central accounting department and exchange among the subjects was supposed to be replaced by distribution (Dolež alová 2009)...
eBook - ePubJoseph A. Schumpeter
His Life and Work
- Richard Swedberg(Author)
- 2013(Publication Date)
- Polity(Publisher)
...7 Capitalism, Socialism and Democracy I have first to say that I am not running a drugstore. I have no pills to hand out; no clear-cut solutions for any practical problems that may arise. For these problems are largely political and it is up to you to say what you want to do and to fight for it, to say what you will extol and what you will destroy. The economist has no particular qualification to speak about that aspect of any subject. What he can do and what I want to do, to the best of my ability, is to present the problem... as I see it. (Schumpeter in a speech in Detroit, April 1941) After Schumpeter had completed Business Cycles, he immediately began to work on Capitalism, Socialism and Democracy, which was to become his second great work in the United States. On one level, Capitalism, Socialism and Democracy is clearly a political work – a treatise in political philosophy or political sociology. But it was also intended to complement Business Cycles and to be a sequel of sorts to this work. In Business Cycles, Schumpeter had stressed that he was not going to cover ‘the entire range of the economics and sociology of capitalism’, because it was too large a task. 1 It was difficult enough to take economic history, statistics and economic theory into account; and sociology had to be excluded. This meant that Schumpeter had to make the assumption that the economic institutions of capitalism had remained the same under the period of investigation, that is, from 1787 to 1938. As Schumpeter saw it, this assumption facilitated the analysis for most of the period. But the nearer he came to the 1930s, the more difficulties there were. The Juglar in the mid-1930s, for example, did not behave at all the way it was supposed to do. And the reason for this – as Schumpeter was to explore in his Lowell Lectures from 1941 as well as in Capitalism, Socialism and Democracy – was that the institutions of capitalism were slowly being transformed...
eBook - ePubAn Introduction to Economics
Economic Theory and Society
- Chandana Ghosh, Ambar Nath Ghosh(Authors)
- 2020(Publication Date)
- Palgrave Pivot(Publisher)
...© The Author(s) 2019 C. Ghosh, A. N. Ghosh An Introduction to Economics https://doi.org/10.1007/978-981-15-1056-4_6 Begin Abstract 6. Capitalism Versus Socialism: A Few Country Studies Chandana Ghosh 1 and Ambar Nath Ghosh 2 (1) Economic Research Unit, Indian Statistical Institute, Kolkata, West Bengal, India (2) Economics Department, Jadavpur University, Kolkata, West Bengal, India Chandana Ghosh (Corresponding author) Ambar Nath Ghosh Abstract This chapter explains the economic performance of the Soviet Union and the reasons for its disintegration. It also seeks to explain China’s economic performance and assess whether it has deviated from the socialist path. It also discusses the economic performance of Cuba and the prospect of its survival as a socialist state. It identifies the inevitable hostility of the vastly more powerful capitalist powers as the sole factor that has led to the collapse of the Soviet Union, aberrations in the People’s Republic of China and uncertainty regarding the prospect of survival of Cuba as a socialist state. Keywords Soviet Union China Cuba Socialism End Abstract 6.1 Introduction This chapter discusses and assesses economic performances of three socialist states, namely, the Soviet Union, People’s Republic of China and Cuba. On the basis of this assessment it seeks to explain why Soviet Union disintegrated, the reasons for the apparent deviations of People’s Republic of China from socialism and the problems faced by Cuba in sustaining socialism. We have divided the chapter into three parts. Part I focuses on the Soviet Union, Part II discusses the state of People’s Republic of China and Part III devotes itself to Cuba. Part I: Soviet Union 6.2 Economy of the Soviet Union: Introduction Socialism based on Marxian principles was born in the Soviet Union (Union of Soviet Socialist Republic [USSR]) in 1917 under the leadership of Vladimir Ilich Lenin...
