Capitalism and Socialism are both forms of an economic system involving ownership of natural resources and property, this however is where the similarities end.
Capitalism involves the private ownership of property, pursuit of personal profit and the free competition and consumer sovereignty. Socialism is on the other side of the spectrum with its collective ownership of property, pursuit of collective goals and the government control of the economy.
Private ownership of property allows for individuals to own virtually anything where as the socialist collective ownership of property limits the right to private property which is all owned by the government. The capitalist pursuit of personal profit encourages individuals to attain and accumulate property. This differs greatly form the socialist pursuit of collective goals which "outlaws private trading as block market activity" (p.402).
The final difference involves the amount of government activity (or lack of). Capitalist societies encourage a "free market system" with no government involvement, believing the "economy will regulate itself" (p.
401). A socialist society however disagrees with the capitalist views and allows for the government to control the entire economy.
So which system woks the best? In terms of the productiveness of an economy under either system, it would be determined by calculating the nations GDP and comparing them. When this was done capitalist countries productivity was higher than the socialist countries (p. 402).
Economic inequality is determined by "the distribution of resources within a society" (p.403). This was done in the 1970's by comparing the earnings of the richest and poorest five percent of the population (p. 403). These findings found that although capitalist economies do have a higher standard of living, they "generate greater income disparity" (p. 403).
Each system's approach to personal freedom is very different and while the socialist nations personal freedom is almost...