Capitalism and Socialism

Defined in brief

Capitalism defined

Capitalism is an economic system in which trade, industries, and the means of production are largely or entirely privately owned. Private firms operate in order to generate profit. Central characteristics of capitalism include private property, capital accumulation, wage labour.

The dominant economic system in the world today.

Socialism as an Economic Theory

the means of production, distribution, and exchange 

are controlled by the state.

It is characterized:

by production for use rather than profit,

by equal distribution of wealth, 

by government determination of investment, prices, and

production levels.

- A one party state.

Examples: No true socialist countries exist. Some have come close. China, Russia, Vietnam, Cuba, North Korea.

Other Charactistics of Socialism

- private property is abolished or limited

- classless society

- equality of opportunity

- free education for all, men and women

- free health care system

- the common welfare of all is put before that of the individual

 ( authoritarian socialism)

Social Democracy

- rejects authoritarian socialism

- believes in the principles of democracy to improve a capitalist society.

- uses a mix of capitalist and socialist ownership

- Multiple party system.

- democratic government, elected

- provides for the welfare of its citizens

- aims for free health care system and free education for all.

- Examples: most European countries are social democracies including others around the world.

Questions?