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Capitalism vs. Socialism What is the Difference?

By Staff | Jan 10, 2020

I have stated in editorials before that I try to never get involved in political conversations. Everyone believes one way or another and that is their right. It is also their right to voice those opinions to anyone.

I thought it might be a good time to compare socialism vs. capitalism so people can refresh their memories on why America is the greatest country in the world with its capitalist economy.

The main difference between socialism and capitalism is the extent to which the government controls the economy.

Key Points

Socialism is an economic and political system under which the means of production are publicly owned. Production and consumer prices are controlled by the government to best meet the needs of the people.

Capitalism is an economic system in which the means of production are privately owned. Production and consumer pricing are based on a free-market system of “supply and demand.”

Socialism is most often criticized for its provision of social services programs requiring high taxes that decelerate economic growth.

Capitalism is most often criticized for its tendency to allow income inequality and of stratification of socio-economic classes.

Capitalist and Socialist Countries Today

Today, there are few if any developed countries that are 100 percent capitalist or socialist. The economies of most countries combine elements of socialism and capitalism, the economies of most countries combine elements of socialism and capitalism. In the government provides healthcare, education, and pensions. However, private ownership of property creates a degree of income inequality. An average of 65% of each nation’s wealth is held by only 10% of the people-a characteristic of capitalism. Other countries incorporate characteristics of both socialism and communism. Still there are those countries countries that have strong socialist parties, and their governments provide many social support programs, most businesses are privately owned, making them essentially capitalist.

The United States, long considered the prototype of capitalism, isn’t even ranked in the top 10 most capitalist countries, due to its level of government regulation of business and private investment.

All economics aside, socialism takes away many of the freedoms guaranteed by our constitution. In socialist countries around the world, the freedom of speech against the government does not exist. Is this how you want to live?