Socialism is a form of social organization that is generally referred to as a collectivist economy. It is basically a centrally organized economy in which the government manages all means of production. Capitalism, on the other hand, is a capitalist structure founded on the tenet of human freedom. The capitalist class of intellectuals, administrators, and social planners determine what citizens want or what is good for society, and then use the state’s economic authority to control, tax, and redistribute the income of those who function for a living. In capitalism, private owners determine when and what to make, as well as how much goods can cost. As a matter of fact, people compete freely with little to no interference from the government. The distinctions and similarities are outlined below (Ushistory.org).
Structure of Operation
Socialism is based on the belief that wealth and income should be shared more equally among people throughout an economy. Capitalism, on the other hand, is premised on the belief that pursuit for of self-interest and the right to own private property are morally defensible and legally legitimate. Subject to certain restrictions, individuals are free to decide where to invest, what to produce or sell, and what prices to charge. Most of the means of production, such as businesses are owned by private individuals and there is no natural limit to the range of their efforts in terms of asset acquisition.
The Moral System
Under socialism, a ruling class of intellectuals, bureaucrats, and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In contradistinction, capitalism requires human beings to deal with one another as traders; where free moral agents meet to trade and sell goods and services on the basis of mutual consent.
Since socialist believe that the government has a responsibility to redistribute wealth to make society more fair and just, any economic inefficiency can lead to an inability to finance the most advanced and environmentally sustainable technology; which leaves the economically powerless individuals victims of development and environmental hazards.
Owing to the fact that capitalism explicitly rewards merit, ability and achievement, regardless of one’s birth or station in life, there are winners and losers. Consequently, it usually leads to indifference to environmental degradation and economically powerless individuals become victims of development and environmental.
Both socialism and capitalism have incentive programs. In a capitalistic economy, the incentive is to work harder because each producer receives the total value of his production; the rewards are not shared.
Under socialistic economy, there are built-in incentives to shirk responsibility because people feel that there is no reason to work harder than anyone else because the rewards are shared. The incentive is to work less than others because the immediate loss is shared and the rewards are, therefore, minimal to the hard-working individual. In other words, socialism rewards sloth and penalizes hard work while capitalism rewards hard work and penalizes sloth. Additionally, both structures tend to be characterized by similar economic aspects such as poverty and inflation (Uidaho.edu).
Based on its structure of operation, capitalism is considered by many individuals as the morally and just system of social organization because the sole criterion that determines the value of thing exchanged is the free, voluntary, universal judgment of the consumer. Socialism is considered the system which institutionalizes envy and self-sacrifice that employs compulsion and the organized violence of the state to expropriate wealth from the producer class for its redistribution to the parasitical class. Above all, it is important to note that these two are simply social systems that have contrasts as well as overlaps.
Uidaho.edu. Defining Capitalism, Communism, Fascism, Socialism. 2017. 02 February 2017
Ushistory.org. Comparing Economic Systems. 2017. 02 February 2017