An economic system is an organized approach to producing and distributing goods and services. It is scarcity (in economic theory, the limited availability of resources and goods; the excess of wants over needs), which creates a need for economic systems. There are different types of economic systems in which all are believed to be the correct solution when it comes to scarcity. Capitalism is based on an approach to economics that promotes private enterprise. In a private enterprise system, you will see profit, initiative, competition, incentive and self-advancement. Socialism is an economic philosophy that stresses public ownership of the means of production rather than private ownership. Underlying this philosophy is the belief that this system is morally better because it reduces the gap between the rich and the poor. In socialism, there is government involvement in the economy, either through control or ownership of productive resources. Socialists believe that the government should provide basic necessities for all, as well it believes in competing political parties chosen to govern by majority rule, with minority rights guaranteed.
Capitalism
ABUSES OF CAPITALISM
A small United States Postal Service truck seen in...The economic systems of nations in today's world are not simply capitalist or socialist. Economic systems now have elements of both capitalism and socialism. They are mixed economies. Canada is a mixed economy because it has a unique combination of capitalist and socialist policies. Government intervention basically means the amount of involvement the government will have in the economy. For Capitalism to work there must be little or no government involvement in the economy. For socialism to work there must be complete government intervention in the economy, where as in Canada there is some government involvement in the economy, but people have the freedom and individualism to do as they wish like in Capitalism. Some people believe that governments have a responsibility to protect the...