Capitalism and socialism are often related the different parties in the US, democrats and republicans
Capitalism is also known as a market organization and is distinguished by private ownership (Gwartney, et al., 2018). This allows for more citizen involvement by determining the what, the how and for whom questions of goods production. It is not one individual or entity that makes all the decisions but a combined attempt at communicating desires and preferences to answer those three questions. A country that exhibits this type of economy is Singapore (Gwartney, et al., 2018). Socialism is very different from capitalism as it is centrally planned by the government, meaning all decisions for buyers and sellers are made through the government and their political processes (Gwartney, et al., 2018). This system looks at the majority opinion rather than the individual, which also leads to a smaller selection of goods produced. A country that exhibits this type of economy is Cuba.
Capitalism and socialism are often related the different parties in the US, democrats and republicans. A lot of the concerns with socialism stem from observations of countries where it has failed and not necessarily the true facts driving a socialist economy. Some pros to a socialist economy are that it provides fair and consistent access for everyone through government regulation. It also allows for a stronger control on resources allowing for long term regulation. A con relating to socialism is it is less inclusive when looking at what all consumers want instead of just the majority. With capitalism, the power is in the people to give them the opportunities to change their life through different buying and selling opportunities. However, without government control, there is possibility for individual abuse of the system which has allowed for an increase wealth inequality.
Entrepreneurs improve life by introducing goods that individuals didn’t know they needed (Tamney, 2015). Those of wealth may be more likely to take the risks necessary for entrepreneurship initially, but their success is also a sign of hope and inspiration for those who are not wealthy. A lot of wealth inequality is subjective because of one’s mindset. Wealth inequality is often focused on low incomes due to the visibility (Tamny, 2015). In my opinion, this wealth inequality isn’t bad because it can allow for goals and dreams for people to work towards to take charge of the life they want to live. Also, it can allow for the reinvestment and development of businesses that may not have survived in a socialist economy.
References
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com (Links to an external site.)
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
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