Capitalism is an economic system based on the private ownership of capital goods and the means of production, with the creation of goods and services for profit.
Characteristics of Capitalism:
• Ownership belongs to “YOU”
• Freedom of own economic growth
• Suitable environment for business
• Profit in your “Pocket”
• Reward based system
• Creative and innovative environment
Advantages and Disadvantages of Capitalism:
Advantages of Capitalism:
1. Cost of production is reduced due to efficient control.
2. Production process is efficiently controlled.
3. Improved quality of goods.
4. Different varieties of product.
5. Consumer’s choice given full priority.
4. Materialistic approaches to all problems of life.
Socialism as the name suggests is something which is for the benefit of all the people rather than small group of individuals. Under socialism economic system it is the government which possess majority of the factors of production and rest lies with private sector or capitalist.
Characteristics of Socialism:
• Absence of competition
• Equal opportunities to all
• In Socialism, means of production are owned by the state
• No economic freedom to the people
• Economic related activities are planned by the central planning authority.
Advantages and Disadvantages of Socialism:
Advantages of Socialism:
1. Under socialism since it is the government which owns majority of factors of production the chances of consumer being charged more is reduced as government will add minimum margin of profit on the produce unlike private companies.
2. Chances of monopoly by few producers or people is next to nil under this system as government holds majority of resources, people are not in position to take control of resources and created monopoly like situation.
3. The gap between poor and rich is there but it is not that gigantic as in the case of capitalist economic system.
4. In environments with plentiful resources, socialism provides all members with their survival needs, creating a stable social environment.
5. Members that cannot participate economically - due to disabilities, age, or periods...