CAPITALISM AND

SOCIALISM
Capitalism
- is a system in in which all natural resources and
means of production are privately owned.

• It's emphasizes profit maximization and

composition as the main drivers of effeciency
• These means that when one owns a business, he
needs to outperform his competitors if he is going
to succeed.
• Economist Adam Smith in the 1770s called
"invisible hand" of the market.
• There are many sectors where a hands of approach can
lead to what economists call market failures where an
unregulated market ends up allocating goods and
services.
• Monopoly, for example is a kind of market failure.
When a company has no competition for costumers, it
can charge higher prices without worrying about losing
costumers.
• Market failures like this are the reasons most counties
are not purely capitalist societies.
SOCIALIS
M
• Socialyst System,the means of product are under collective
ownership.
• In Socialism, property is owned by the government and allocated
to all citizens, not only those with the money to afford it.
• It emphasizes collective goals, expecting everyone to work for the
common good and placing a higher value on meeting everyone's
basic needs than on individual profit.
• Karl Marx first wrote about socialism, he viewed as a stepping
stone toward communism a political and economic system in
which all members of a society are socially equal.