Answer: Capitalism and socialism represent opposing school of thought and their central ideas are based on the role of government in the economy and economic equality among the citizen.
WHAT IS SOCIALISM ?
Socialism refers to an economic and political system in which all factors of production are owned and controlled totally by the people. Socialism is based on economic and political theories that argues that production and distribution of goods and services are the sole responsibility of the people. The theorist does not believe there should be privately owned property, it should be owned by the community. In a socialist economy everything the people produce is a social products and it is distributed to all citizens that participated in the production process.
Furthermore, in a socialist economy, the basic needs of the people are met, basic needs like shelter education, healthcare economic security etc. The government managing the resources of the people can engage in the production of goods and services that is needed by the people even if its not profitable.
BENEFITS OF SOCIALISM
-The citizens are equals and the wealth generated by employees is distributed equally to everyone
- The government ensure fairness in resources utilization and distribution
-It diminished or eradicate class distinctions, between the lower class and higher class.
PROBLEMS OF SOCIALISM
- Government ownership of resources leads to inefficiencies , since workers lacks the motivation or incentives to work hard.
- Socialism requires high taxes that may decelerate economic growth.
WHAT IS CAPITALISM?
Capitalism is a system of government in which the private individuals play a vital role in deciding what to produce , how much to produce , and when to produce, Leaving the cost of goods and services to market forces. When an individual spot an opportunity in the market place, they rush to fill the vacuum.
Capitalism focus on a free market economy, meaning an economy that distributes goods and services according to the laws of demand and supply. Furthermore capitalism is the free operation of the capital markets. Private enterprise operate and owns the means of production for a profit.
BENEFIT OF CAPITALISM
- consumers tend to enjoy wider choice of products and services to choose from since the system allows competition.
- Greater incentives to work hard since they enjoy the profits generated from owning the means of production.
- Greater market efficiencies since business find innovative means on cutting down cost as well as retaining product quality.
PROBLEMS OF CAPITALISM.
-It allows the creation of monopoly in the supply of goods and services. They tend to charge higher prices at the consumer expense.
-It breeds class distinction between the owners of the means of production and the workers.
None of the schools of thought fully provide overall benefits to the society, however, socialism can still be regarded as one that provides greater benefits to the young, old, rich , poor and the sick, they are all equal, and the society can provide for them equally and the society is free from oppression.
