SOCIALIST VS CAPITALIST

ECONOMY

Presentation by Yash poddar

WHAT IS CAPITALISM?
 Also called ‘’Free market economy’’
 Is an economic system in which private individuals/owners own the factor of
production and enterprises .all activities are undertaken with the motive of
profit earning.
 Eg.Hong kong,UK,Singapore,USA,New Zealand etc.
PRO’S of capitalism
 Competitive environment and profit oriented system
 Rapid economic growth
 Promotes innovation and entrepreneurship
 Produces what’s there in demand in the market and for profit
motive
 Efficient use of resources and method of production
 Values competitiveness and provides opportunity for personal
growth
CON’S of Capitalism
 Values Profit over welfare of the society
 Loss of human values
 Leads to rise in income inequality
 Concentration of power and money in hands of few
 Leads to rise in monopoly ,hence exploitation of consumers
 The attitude for “perfection” isn’t sustainable in long run
 Capitalism ignores external costs such as global warming,climate
change,pollution. This might make the products affordable and accessible
but over time it leads to depletion of natural resources .
WHAT IS SOCIALISM?
 Socialism is an economic system where state owns and controls all
means of production , also decides what goods are to be produced in
accordance with the need of the society. Every thing runs on central
planning
 Socialism supports support social equality,distribution of income
based on contribution and public ownership of factors of production
etc.
 Socialists argue cooperation is the
basic nature of the people not competition.
Example:Finland,Denmark,Sweden etc.
TYPES OF SOCIALISM
 Democratic socialism
 Revolutionary socialism
 Libertarian socialism
 Utopian socialism
 Etc.
Pro’s of socialism

 Workers no longer are exploited

 Profits are shared on the basis of contribution
 Eliminates poverty and income inequality
 Provides equal access to
education,healthcare,transportation
 More social security
 Natural resources are preserved and sustainable living
Cons of socialism

 It heavily relies on cooperative nature of humans

 And ignores human nature of greed
 Ignores those who are competitive and work on personal growth
 Undermines entrepreneurship and innovation
 Limits the efficiency of the work force
 Less economic growth as less tech advancements implemented
 Government holds the monopoly in the market
 Government corruption and abuse of power
 Capitalism Socialism
 Means of production owned by  Means of production owned by
private individuals  government 
 Prices determined by supply and  Prices dictated by the government
demand  Welfare is main motive of the state
 Profit oriented system  Government-owned businesses
 Free market competition have less incentive for efficiency
encourages efficiency and and innovation
innovation   High taxes necessary to pay for
 Limited taxes based on individual public services
income
Success models of socialism
Ultimate solution

1)No country is 100% Socialist or capitalist

Most states use blend of both while framing their policies.
2)Welfare of the people should be focused by the state,
irrespective of their economic system
3)Basic facilities like public health,education,welfare and social
security should be provided by the state
4)Private enterprises should be allowed to grow,innovation should
be rewarded
5)State should make long term policies for sustainable management
and ending the income inequality ,use taxes in efficient way