Capitalism and Socialism are very different. Capitalism, for instance, is an economic system where the production of goods is regulated by the people as well as the selling of goods. People own most of the companies, not the government. Their market is reliant on supply and demand. This causes companies that are incompetent to go out of business, and efficient companies to prosper. It also offers the consumer a better quality good for the least amount of money. Socialism on the other hand, is very different. In a Socialist economy, the government owns most of the prosperous companies. The government then regulates how much of a product is produced, distributed and how much the good will cost the consumer.
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Now in Free-Market Competition, the government cannot place any rules on the private owners of businesses, which is referred to laissez-faire. The consumer shall in the end decide which companies will survive and which ones will fail. For the consumer this will produce the greatest product for the largest number of consumers, as long as there is no “ red tape” caused by the government, or any other abnormal hurdle.
Private ownership allows the person to have a few extra rights. When you own your own business, you have the right to open the hors that you see fit. You may also expand your company to accommodate an increase in sales volume. Your company can also be sold if you see fit. With all of these choices, the government may not under any circumstances interfere with planning, regulations and rules.
Pursuit of profit in a society can make the best product for the largest number of persons. In a Capitalist society it can have a few positive results. Such as the best business owner will earn the most money, and the consumer will save some money. This in return should make the society more resourceful and vital.
The major difference between the Capitalist society and the Socialist society is the direct ownership of the businesses and the income of production. In the Socialist society the government takes control of the countries major money generators, such as, airplanes, railroads, television stations, banks. They may also take over companies that produce steel, chemicals, oil and other such items. They offer the population a job for life in return for production in the name of the people. Whereas in a Capitalistic society, the people own companies individually, make as much money as their business will allow. The individual owners also regulate how much of a product will be produced, and how it will be distributed, and for what price.
Socialist societies do however, produce more equity than its Capitalist counter part, and the space between poverty and wealth is reduced. On the other hand the Socialist society has more bureaucracy than a Capitalist society, for instance, when you want to obtain a drivers license you have to follow all of the governments rules, regulations, fill out forms, follow their procedure, and go down a long line of clients. In a Capitalist society all you need to do is fill out a form at the DMV and take test to obtain a drivers license.
Even though both Capitalist and Socialist societies are so different neither one can successfully exist. They need to be a little of both. When either society is predisposed by new technology, or the division of labor, population shifts, and etc. both societies need to have both government companies, and privately owned businesses. Such as the military buying airplanes from Boeing instead of building their own aircraft. This helps the small businesses. But the government provides jobs for the people in the military, police and other government fields.
Curry, Tim. Jiobu, Robert. Schwirian, Kent. (2002). Sociology for the Twenty-First Century. Chapter 8, 226-232.
The Capitalism Site (2002) The Unknown Ideal [On-Line].
Available: http://www. capitalism. org