Differentiate capitalist and socialist economies.
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Key Takeaways
Capitalism is based on individual initiative and favors market mechanisms over government intervention, while socialism is based on government planning and limitations on private control of resources.
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Capitalism vs Socialism
The main difference between capitalism and socialism is the extent of government intervention in the economy.
A capitalist economic system is characterised by private ownership of assets and business. A capitalist economy relies on free-markets to determine, price, incomes, wealth and distribution of goods.
A socialist economic system is characterised by greater government intervention to re-allocate resources in a more egalitarian way.
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