Capitalism

Capitalism is an economic system in which the means of production are privately owned and operated for profit, usually in competitive markets.

In other words; An economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations. OR

Capitalism is the social system which now exists in most countries of the world. Under this system, the means for producing and distributing goods (the land, factories, technology, transport system etc) are owned by a small minority of people. We refer to this group of people as the capitalist class. The majority of people must sell their ability to work in return for a wage or salary (who we refer to as the working class.)

Benefits of CapitalismIn years 10001820 world economy grew six-fold,in years 18201998 world economy grew 50-foldProvides Choice to customersProvides valuable goods and servicesCapitalism actively rewards positive traits like hard workSimilarly, it punishes negative traits such as laziness and theft Narrows the gap between common person and wealthyProvides opportunity to realize dreams and desiresCapitalist societies usually do not have largeblack marketsBuild on democracySocial Good

Major limitations/ Criticism:Downfall of work ethicsFree Market + Self InterestAccumulation of wealthEncourages inequality in a societyBusiness lobbying with governmentMonopolistic tendencyHuman resource exploitationResults in great disparities between income of people owning the capital resources and others

Socialism

Collective ownership and democratic control of the material means of production by the workers and the people

Socialism is a term applied to an economic system in which property is held in common and not individually, and relationships are governed by a political hierarchy. Common ownership doesn't mean decisions are made collectively, however. Instead, individuals in positions of authority make decisions in the name of the collective group.

Socialists argue that socialism would allow for wealth to be distributed based on how much one contributes to society, as opposed to how much capital one holds.

A primary goal of socialism issocial equalityand adistribution of Wealth based onones contribution to society and an economic arrangement that would serve the interests of society as a whole.

Socialism as we know it today, most commonly refers to "market socialism," which involves individual market exchanges organized by collective planning.

Difference between socialism and communism is that communists directly oppose the concept of capitalism, an economic system in which production is controlled by private interests. Socialists, on the other hand, believe socialism can exist within a capitalist society.

Features of Socialism

Social Ownership of means of productionExistance of public sectorDecisive role of Economic PlanningProduction guided by Social BenefitsAbolition of exploitation of labour

Benefits of Socialism

Better salariesStable EnvironmentEliminates povertyBetter ProductsFulfills survival needOpportunity for citizens to explore non-economically-productive pursuits

Criticism of Socialism

Distorted price signalsSuppression of economic democracySlow Technological advancementsMinimize self managementReduced incentives

Mixed EconomyAny economy in which private corporate enterprises and public sector enterprises exist side-by-side, and decisions taken through market mechanism are supplemented by some form of partial planning, is to be described as a mixed economy.

This system overcomes the disadvantages of both the market and planned economic systems.

Provides a clear demarcation of the boundaries of public sector and private sector so that the core sector and strategic sectors are invariably in the public sector.

The government intervenes to prevent undue concentration of economic power, and monopolistic and restrictive trade practices

The rights of the individual are respected and protected subject only to the requirements of public law and order and morality

Features

Resources are owned both by the government as well as private individuals. i.e. co-existence of both public sector and private sector.

Market forces prevail but are closely monitored by the government.

Monopoliesmay be existing butunder close supervisionof the government.

Advantages

Producers and consumer have sovereigntyto choose what to produce and what to consume but production and consumption of harmful goods and services may be stopped by the government.

As compared to Market economy, a mixed economymay have less income inequalitydue to the role played by the government.

A mixed economy represents an achievable balance between individual initiative and social goals.

Communism

Communism, also known as a command system, is an economic system where the government owns most of the factors of production and decides the allocation of resources and what products and services will be provided.

Features1.Government ownes land 2. Government ownes capital 3. Government allocates all scarce resources. 4. Government controls prices for labor and goods. 5. True communism(which has never been achieved) all people are considered equal and given a steak in industry ect