Compare and Contrast Essay: Socialism vs. Capitalism (2023)

Compare and Contrast Essay: Socialism vs.Capitalism (1)

đź“ŚCategory:Economics,Government,Politics
đź“ŚWords:1257
đź“ŚPages:5
đź“ŚPublished:10 April 2022

Governments are what run our country. The concept of the best type of government has been debated for many years. There are many types of governments but two of the most often compared and used are Socialism and Capitalism. The two ideologies have had clashing beliefs on how to run a country and what role the government should play and how it should play it.

Many think that Socialism is the right choice as it distributes wealth among individuals so certain groups don't have an abundance of power. The other side believes that Capitalism is better as it lets the economy grow at a much faster rate therefore seen as a better economic choice. Due to the fact that capitalist countries generally perform better and individuals can make their own business decisions without control of the government. This is a big reason majority think that capitalism is simply a better form of government. And due to the fact that socialism has more “fair” ways of running an economy many people think socialism is the better option. All that said, capitalism is the superior way to run an economy due to the freedom it gives citizens and the success it has seen financially.

Briefly, Capitalism is a form of government where everything, whether that be a country's trade or industry, is run by private firms. These companies are usually owned by a single person (Founder/CEO) and compete for business with other private companies.

Alternatively, Socialism sometimes referred to as leftism is heavily based on the community and the government. In socialism, all trade, production and distribution are done publicly by the state government. Citizens are still allowed to run small businesses but anything that has demand, is essential to living or generally important is owned by the state. Socialism can be considered a less strict version of communism.In order to analyze both socialism and capitalism, we need to know their differences.

To begin with, in capitalism all assets like food are owned by private firms and businesses which don't need any correlation to the government unlike in socialism assets like these are owned by governments/cooperatives and not made for profit which is obviously a big difference. These state-owned businesses spread out the resources equally to citizens. Because of this driving difference socialism promotes more of an equality mindset whilst capitalism focuses solely on economic growth. Furthermore, socialism tries to spread all money among people in the country by making everyone work for wealth and in turn distribute wealth among them. This means that usually there aren't poor people and there aren't rich people. Capitalism gives citizens the freedom to do whatever they want to make money, the government isn't expected to make sure everyone has a job in capitalism. In a capitalist society, any citizen has the right to start or own a business and enter into a contract. Opposingly in socialist societies basic and essential industries are owned by the state this ranges from their food to their trade.

As you can see in capitalism governments don't care much about the wellbeing of citizens compared to socialism leaving each person on their own to compete for the most income. In Socialism it doesn't matter how hard you work, money is distributed based on necessity, this is a good idea at face value but it does have many cons to it. For example, citizens will most likely be demotivated to do a lot of work due to lesser rewards compared to capitalism. When it comes to healthcare, socialism and capitalism have opposite ideals. But they do both believe healthcare is very important and should be accessible to every citizen. In capitalism, healthcare is provided by a private sector meaning people must pay for healthcare and in socialism, healthcare is provided free or subsidized by the government.

On the other hand, socialism and capitalism have many similarities in their rules and ideologies. Firstly, both socialism and capitalist governments are funded by taxes; this means that the government's main source of income is from the people in the country. Secondly, socialism and capitalism both recognize wealth (GDP) as the way the economy should be measured even though their ideas on the best way to produce maximum capital are different.

One of the biggest similarities between capitalism and socialism is they are both democracies meaning governments are voted in. Both capitalism and socialism consider labor and capital to be primary economic forces.Furthermore, both systems believe that natural resources are valued based on the human labor surrounding them. This also means that capitalism and socialism are both labor centric. In socialism, the government will have much more control over the economy than capitalism but they do not have 100% control as people are still able to make economic decisions of their own like buying property and small-scale private enterprises can still be made. Therefore, there are still market forces in socialism which means another similarity between capitalism and socialism is the fact that they both have market forces. Finally, Socialism and capitalism both have proven to be functional and have the potential to be successful, however, socialism has recently had the record of failing.

From my point of view, capitalism is the superior government system. This is because it gives power to individuals allowing them to make decisions that affect the country and limits the power given to the government. The best proof is history and the consequences of how these two actually fared out in the real world rather than just the theory. Countries like Canada, Australia, New Zealand, Denmark and Switzerland have all seen great success from capitalism. In fact, most of the countries with the highest GDP’s are capitalist countries.

There aren't as many countries that are socialist as there once were (possibly because of its failure) but socialism's failure rate is alarmingly higher than capitalism, over the last 100 years there have been many attempts to start a socialist government. Out of these more than 25 of them met some form of failure which is only a number for notable tries. Socialism hasn't seen much success other than in countries like Portugal and India (India is considered socialist). Though capitalism may be more successful publicly it is very important to note that no country has ever been 100% capitalist and some say it's not even possible to do so. If we look back at the past and analyze it we can say many socialist economies failed due to how they neglected new technology progress and had insufficient funding,

In Conclusion, capitalism and socialism are both functional but vastly different forms of government and each has its pros and cons. Socialism's main cons are slow economic growth and risk of financial failure, the main pros being a more equal society with reduction of poverty compared to other governments. capitalism's main pro is a faster-growing, more stable economy and the main cons are a much higher wealth gap, workers getting exploited, social division and monopoly power.

Generally, we can see that in socialism citizens are much more trapped under the government's grasp which in essence is what socialism is. It's like this to “prevent poverty and imbalance in-power.” In other words, it's giving all the power that people have in capitalism to the government. Some may see that as a good thing but many scholars think that the more that power is split between groups and people the safer everyone is. Capitalism provides everyone with theLooking at the past socialism, though the idea to spread money around to everyone is a good idea on face value, socialism just isn't built to work in our large and expanding society today.

Capitalism brings in higher income, gives individuals the chance to be successful in society, gives a bigger opportunity for innovation, freedom of choice, has competition which encourages growth, provides a bigger incentive(money) to work and is better than any alternative. All evidence leads to the fact that capitalism is simply the better option.

Ideally, the best government would be a mix of many different forms and wouldn't be specifically one group but if you need a definitive answer on which is better, capitalism or socialism the answer would be capitalism.

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