Similarities Between Capitalism And Capitalism

770 Words4 Pages
An economy is one of the strong forces to balance the standard of living and political power, so it is important to understand how an economy functions. An economic system is defined as a group of people following the same principle to facilitate economic activities with identical purposes. Capitalism and Socialism are types of economic systems which provide effective methods to organize markets. However, Capitalism is a better form in terms of authorities, price control, and competition. First of all, the primary area Capitalism and Socialism are different is an authority to control the cost and an amount of products. Capitalism allows private companies or individuals to own and operate their businesses independently while governments barely have right to make a decision and only concentrate on the military, foreign affairs, and the peace in countries. Also, owners of businesses legally have a privilege to receive all profits or outputs of goods and services, but businesses will be done under laws. In contrast, Socialism is driven by governments which dominate most resources, banks, forests, mining, and public utility and assistance. Residents cannot manage or make any decisions as everything depends on governments. Besides, all revenues they gain from economic activities will distribute to society equally. In addition to an authority, capitalism and socialism also differ in price control. Capitalism tends to do businesses to gain the maximum profits. Goods
Open Document