distinguish between capitalist and socialist
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Capitalism and socialism are formal economies. The major differences between capitalism and socialismrevolve around the role of the government and equality of economics. Capitalism affords economic freedom, consumer choice, and economic growth.
TejaswiniRath:
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Capitalism is an economic system based on private ownership and control of the means of production. Socialism on the other hand advocates public or joint ownership and control of means of production. This is implemented in practice by government ownership and control of industries. As in a democracy the government is representative of common people, the control over economic activity that is managed by the government theoretically is with everyone instead of a select few.
Capitalism, has advantages in the form of increased efficiency and better managed industrial activity. As increasing profits is a primary objective of the owners of businesses, they are compelled to use the capital and labor in the most optimum manner. In socialism on the other hand, there is no such objective to be met and those who control industrial activity are free to utilize resources in any way. This decreases efficiency and ultimately serves no advantage for the general public.
Capitalism, has advantages in the form of increased efficiency and better managed industrial activity. As increasing profits is a primary objective of the owners of businesses, they are compelled to use the capital and labor in the most optimum manner. In socialism on the other hand, there is no such objective to be met and those who control industrial activity are free to utilize resources in any way. This decreases efficiency and ultimately serves no advantage for the general public.
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