Capitalism v/s Socialism

Module 1

-By Bhakti R. Tanna

 Capitalism
Capital (or the "means of production") is owned,
operated, and traded for the purpose of generating
Philosophy profits for private owners or shareholders. Emphasis on
individual profit rather than on workers or society as a
whole.
Market-based economy combined with private or
corporate ownership of the means of production.
Economic System Goods and services are produced to make a profit, and
this profit is reinvested into the economy to fuel
economic growth.
Laissez-faire means to "let it be"; opposed to
government intervention in economics because
Ideas capitalists believe it introduces inefficiencies. Free
market produces the best economic outcome for
society. Govt. should not pick winners and losers.
Relies principally on markets to determine investment,
production and distribution decisions. Markets may be
Economic
free-markets, regulated-markets, or may be combined
coordination
with a degree of state-directed economic planning or
planning within private companies.
Adam Smith, David Ricardo, Milton Friedman,
Key Proponents
-By Bhakti R. Tanna Fredrich Hayek, Ayn Rand, Murray Rothbard
Socialism
From each according to his ability, to each according
to his contribution. Emphasis on profit being
distributed among the society or workforce to
complement individual wages/salaries.
The means of production are owned by public
enterprises or cooperatives, and individuals are
compensated based on the principle of individual
contribution. Production may variously be
coordinated through either economic planning or
markets.
All individuals should have access to basic articles of
consumption and public goods to allow for self-
actualization. Large-scale industries are collective
efforts and thus the returns from these industries must
benefit society as a whole.
Planned-Socialism relies principally on planning to
determine investment and production decisions.
Planning may be centralized or decentralized.
Market-socialism relies on markets for allocating
capital to different socially-owned enterprises.
Robert Owen, Pierre Leroux, Karl Marx, Fredrick
Engels, John Stuart Mill, Albert Einstein, George
Bernard Shaw, Thorstein Veblen, Emma Goldman.
Religion Permitted/Freedom of Religion Freedom of religion, but usually promotes secularism.

Classical liberalism, Social liberalism,

Political Democratic Socialism, Communism, Libertarian
Libertarianism, Neo-liberalism, Modern Social-
movements Socialism, Anarchism, Syndicalism.
Democracy, Anarcho-Capitalism

The accumulation of capital drives economic

Economic activity and production especially are adjusted
activity - the need to continuously produce profits
to meet human needs and economic demands.
Key elements and reinvest this profit into the economy.
"Production for use": useful goods and services are
"Production for profit": useful goods and services
produced specifically for their usefulness.
are a byproduct of pursuing profit.

Fast change within the system. In theory, the

Workers in a Socialist-state are the agent of change rather
relationship between buyer and seller (the market)
than any market or desire on the part of consumers.
Way of Change is what fuels what is produced. Government can
Change by the workers can be swift or slow, depending
change rules of conduct/business practices
on change in ideology or even whim.
through regulation or ease of regulations.

The means of production are socially-owned with the

The means of production are privately-owned and
surplus value produced accruing to either all of society
Ownership operated for a private profit. This drives
(in Public-ownership models) or to all the employee-
structure incentives for producers to engage in economic
members of the enterprise (in Cooperative-ownership
activity.
models).

Can coexist with different political systems. Most

Can coexist with a variety of political systems,
socialists advocate participatory democracy, some (Social
Political System including dictatorship, democratic republic,
Democrats) advocate parliamentary democracy, and
anarchism, and direct democracy.
Marxist-Leninists advocate "Democratic centralism".
 Classes exist based on their relationship to the means
of production: the ruling class, or "capitalists", own
Social Structure shares of the means of production and derive their Class distinctions are diminished.
income in that way. In contrast, the working class is
dependent on wages or salaries.

Private property in capital goods is the dominant form Two kinds of property, personal property, such as
of property. Public property and state property play a houses, clothing, etc. owned by the individual. Public
Private Property
secondary role, and there might also be a limited property includes factories, and means of production
number of collective property in the economy. owned by the state but with worker control.

The modern world economy operates largely

Union of Soviet Socialist Republics (USSR):
according to the principles of capitalism. Hong Kong
Although the actual categorization of the USSR's
Examples is often considered to be the best example of free-
economic system is in dispute, it is often considered
market capitalism, while Singapore would be an
to be a form of centrally-planned socialism.
example of state capitalism.