Question

Discuss a very brief distinction between capitalism and socialism. Then state which you think is to be preferrred above the other, though not necessarily in every respect. Be sure to tell why you think the way you do.

Answer 1

The main difference between capitalist and socialist economy is the extent of governments involvement in the economy.

In a Capitalist economy, private organizations owns most of the assets and business. People has the right to think and do productive activity as per their will. Hence, innovation and growth is more in the economy. It is basically a free market economy.

Whereas in the socialist economy government is involved in most the production. Government regularize most of the trade rules , taxes, currency etc. It is a controlled economy.

E.g. USA practices capitalist economy and China practices socialist economy to some extent.

In my opinion capitalist economy is better. Below are reasons:

1) People has the right to think freely and do as per their will

2) It promotes growth and innovation which is essential for human civilization

3) People are happy and it guarantees long term success and provides more stable economy.