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Capitalism vs. Socialism

Capitalism and socialism are politico-economic systems that differ profoundly, both in terms of their political ideology and their mechanisms of economics. Capitalism as an economy is based on a democratic political ideology and produces a free market economy, where businesses are privately owned and operated for profit; in capitalism, all of the capital investments and decisions about production, distribution, and the prices of goods, services, and labor, are determined in the free market and affected by the forces of supply and demand (ôCapitalismö). Socialism as an economy is based on a collectivist type of political ideology and involves the running of businesses to benefit the common good of a vast majority of people rather than of a small upper class segment of society; it essentially argues for the interests of working class people at the expense of the interests and legitimate property rights of the wealthy classes (ôSocialismö). The manifold differences in the way these two types of economies work is the subject of this paper.

Capitalism is an economic system employed by free societies, where political power and capital ownership are accessible to all (ôA Quick Comparison of Capitalism, Socialism and the "Just Third Way"). Although capitalism does not funnel wealth directly into the hands of the poor and needy, the capitalist economic system operates according to the trickle-down theory, which asserts that as the economy overall becomes richer, that wealth will trickle down and make even the poor richer than before: ôIn the trickle-down theory, competitive markets make it good not just for the rich and powerful but for the poor and powerlessö (ôTrickle Down Effectö).

As an example, consider the case of a manufacturing company that operates in a capitalist society. Due to its operating in a free market, it can compete with other such companies and turn a large profit if it incorporates hard work and ingenuit...

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Capitalism vs. Socialism. (1969, December 31). In LotsofEssays.com. Retrieved 05:55, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1712570.html