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Capitalism vs socialism

By; Group 4




Capitalism is a social system based on the principle of individual rights. The term capitalism is used here in the broader philosophical political sense, and not in the narrower economic sense, i.e. a free-market. Capitalism is the foundation for the economies of England, Canada, Australia, and most developed nations. There is no control in the supply and demand in the market.

History of capitalism
In the late 19th century, large areas of industry came under the control and direction of financiers. Defined as finance capitalism. Around 1950, capitalism entered a new phase as people wanted more goods than the economy could provide. Demand exceeded supply, and we lived in shortage capitalism. After World War II, we shifted into excessive capitalism, with no limit to production but shortage of buyers.

Capitalism has 2 types of classes

Capitalist class Which are the producers and suppliers Working class Which are the working people who work under the capitalist class.

Advantages of capitalism
Efficient Allocation of Resources. Efficient Production. Dynamic Efficiency. Financial Incentives.

Disadvantages of capitalism
Inequality Irrational Behavior Monopoly Behavior Immobility

Center of the system is the free market in which businessmen compete with each other, and the forces of supply and demand determine the prices received for goods and services

Demand curve

Socialism is a political term applied to an economic system in which property is held in common and not individually, and relationships are governed by a political hierarchy. Socialism as we know it today, most commonly refers to "market socialism," which involves individual market exchanges organized by collective planning.

History of socialism
The history of socialism finds its origins in the French Revolution of 1789 and the changes brought about by the Industrial Revolution. The Australian Labour Party\ was the world's first elected socialist party when the party won the 1899 Queensland state election, with Anderson Dawson its Premier and first head of a socialist government anywhere in the world.

Advantages of Socialism
In environments with plentiful resources, socialism provides all members with their survival needs, creating a stable social environment. Members that cannot participate economically - due to disabilities, age, or periods of poor health - can still impart wisdom, emotional support and continuity of experience to the system. Freedom from work provides opportunity for some societal members to explore non-economically-productive pursuits, such as pure science, math and non-popular arts.

Disadvantages of Socialism
Since there is no culling and no economic advantage to working harder, socialistic systems provide no inherent incentive to participate. This makes socialism internally unstable. Due to a lack of incentives, socialistic systems tend not to be competitive, making them externally unstable. In times of plenty, immigrants are drawn to the free resources offered by socialistic systems, while potentially adding nothing economically productive. In times of scarcity, resentment of non-economicallyproductive members of society increases, causing a destabilizing effect on the society and economy.

Capitalism vs socialism
It encourages inequality Private business is owned by private individuals It is more efficient because of competition There is a problem of unemployment. Price of a product can differ Its main motive is profit and self interest

It ensures equality The state owns the means of production and in some cases by worker cooperatives It is inefficient because of lack of competition. There is full employment because the state often directs it. Price of a product is fixed. Its main motive is social welfare

The last Czar was Nicolas II autocratic. Bloody Sunday after getting defited from Japan 1905 Vladimir Ilych Lenin, influenced by principle of Karl Max,organized the revolution. USSR was found as the first socialist nation, Lenin died in 1924.

Stalin took over in 1924 and made tremendous change in the country Collective farming, development of industries, space tecnology,defence flourished under him soviet union played an important role in second world war First satellite, Sputnik and first man to space Yurin Gagarin. Iron curtain was relaxed, mixed economy was declared. In 1991 soviet union fell.

Karl max Tsar nicolas II

Stallin sputnik Vladimir llych Lenin

After the independence in 1898 Americans had great influence over Cuba. The US army stayed in Cuba from1899 to1902 for maintaining peace. A young lawyer named Fidel Castro became the dictator of Cuba in 1959. After the cold war in which Cuba sided with Sovient union Castro established its political and economic reforms called communism. Sugarcane harvest got developed.

After some time tourism surpassed sugarcane harvest. Communist agricultural production system came into existence. Cuba now is now a well developed country. After the fall of Soviet union Cuba took limited free market-oriented measures to alleviate severe shortages of food, consumer goods, and services. Then it gradually stepped into socialism. The sugarcane harvest and tourism was the main economic strength.

Fidel Castro

Hong Kong island itself was founded as a British colony by agreement with China in 1842. he colony was established as a "Freeport," which meant that free trade was guaranteed by the Royal Navy. China made it its source of income and the people over there dose not matter to china. china granted freedom to Hong Kong which they keep on violating.

Milton Friedman recognizes the reality that China's Special Economic Zones will be perpetually fostering political freedom because of their economic freedom. Beijing will not find the resulting demands for freedom acceptable, and will act accordingly, by enforcing authoritarian rule on all political freedom and ultimately on the economic freedom which fosters it as well. There is precedent for this assertion: After Tiananmen, the Shenzhen stock exchange was closed, all economic reforms were halted, and border controls into the zone were tightened; these controls lasted for nearly two years, until this April. Beijing clearly values maintaining control over maintaining the economic zones; Presumably the same logic and course of action will apply to Hong Kong after 1997.

the Americans have out carried world communism by: making the world safe for American corporations. enhancing the financial statements of defense contractors at home who have contributed generously to members of congress. preventing the rise of any society that might serve as a successful example of an alternative to the capitalist model. extending political and economic hegemony over as wide an area as possible, as befits a "great power. The United States carried out extremely serious interventions into more than 70 nations in this period.

Some e.g. of USA exploitation are: Italy: usa interfaced in the elections of Italy to prevent communism to spread in Europe. Germany: The CIA orchestrated a wide-ranging campaign of sabotage, terrorism, dirty tricks, and psychological warfare against East Germany. This was one of the factors which led to the building of the Berlin Wall in 1961. South Korea, 1945-53: After World War II, the United States suppressed the popular progressive forces in favor of the conservatives who had collaborated with the Japanese. This led to a long era of corrupt, reactionary, and brutal governments.

Singapores one striking parallelism to BNW is its oneparty rule since Independence that has assumed an almost parental authority over its citizens. One man, Lee Kuan Yew, has led that one party since 1965. Forty years of psychological conditioning by this parent party. everyone knows the State is above the individual and the family; that to achieve productive efficiency is the primary function of a Singaporean. Everything else is secondary. More than half of the major businesses in Singapore are state-owned. They account for sixty percent of the countrys GDP.

With no natural resources (even water supply is inadequate), no agriculture, and little manufacturing of its own, Singapore has entered deep into international financial markets and services but all at the expense of individual freedom. no legal political rival is allowed to exist in competition with the ruling party, and yet the country has achieved high economic status with a relatively strong currency compared to the other countries of the region. Freedom therefore is not a pre-requisite for Capitalism in Singapore. Singapore is the perfect model that those in control of the world would want subservient states to follow.