Capitalism versus Socialism

Capitalism versus Socialism

Introduction

An economic system is a referred to a system that is responsible for the production, distribution and consumption of goods and services. An economic system includes the combination of various agencies, institutions, entities and consumers that comprise the economic structure of a particular community or society. It has been observed that there are few different types of economic systems that are prevailing in the modern world. Capitalism and socialism are also two opposing schools of the subject of economics. The topic that has been selected for this argumentative essay is the “capitalism versus socialism”, so a brief discussion on the different aspects of these two systems of economics is presented in this argumentative essay.

Discussion

Capitalism and Socialism are considered to be two distinct economic, political and social systems that are being implemented in different countries all over the world. The United States is an example of a country where capitalism is being used, whereas Socialism is being prevailed in Sweden. Capitalism and socialism are the most significant systems that are prevailing in most of the countries. The following is a discussion that will include the basic information and comparison between Socialism and Capitalism.

Capitalism

Capitalism is referred to an economic system in which the means of production are owned by private individuals. Capitalism is also known as a free market economy. The means of production that are included in an economy refer to the resources that are used in the production of goods and services including money and several other forms of capital. It has been analyzed that capitalism promotes an economic system in which the economy is operates by individuals who operate and own private organizations. Decisions about the use of resources and production of certain goods are also made by individuals who own their companies. It has been observed that making profit is the core objective of the capitalist economy (Bowles, 2006). It is analyzed that the capitalist economy involves the managers and owners who are usually the same people. It is also observed that the owners could hire more managers when their business grows for the effective management of their businesses. It is very important to understand that the core responsibility or job of the management is not just making profit but is much more complex and difficult. The goal of the business organization in a capitalist economy is also to maximize the wealth of the shareholder by increasing the price of the stock of the business to make each owner a wealthy person.

Socialism

Socialism is referred to an economic system in which the means of production are controlled and owned by the public or the state. It has been observed that everyone works for wealth in socialism like the capitalist system, but here the wealth is equally distributed top everyone. A mechanism is followed for the operation of activities in socialism that what is good for one is good for all. The government is responsible for making important decisions about the distribution of wealth among people ...