If your knowledge about the major differences between capitalism and socialism is scarce, Turning Point USA thinks it’s well worth continuing reading in order to discover a few of the most notable differences between capitalism and socialism. Which are extremely different from each other and are based on competing ideals.
Capitalism vs socialism: The most noticeable differences
1. Capitalist societies encourage the success of private enterprises
In general, the vast majority of capitalist societies economies are made up by wealth which has been accumulated by a multitude of privately owned businesses. While socialist societies economies are made up largely made up of wealth which has been accumulated by government-run businesses.
As an example in a capitalist country, telecommunication companies, power companies, and transportation companies are owned by the government and have no competition. Whereas in capitalist societies private businesses meet citizens’ demands for power, public transportation, and high-speed mobile networks.
Furthermore, in capitalist societies, the governments in charge actually encourage multiple businesses to compete with each other, in order to drive down the prices of goods and services, which will increase their citizen’s purchasing power. Which will, in turn, encourage citizens to purchase a greater number of goods and services which will increase their country’s annual GDP.
2. Capitalist societies encourage individuals to compete which each other for status
In socialist societies, individuals aren’t motivated or encouraged to work hard in order to pursue individual success and wealth and instead are encouraged to work for the collective good of the country.
However, in capitalist societies, the situation is reversed and the government in charge actively encourages individuals to work hard in order to achieve great individual success and to accumulate a large amount of wealth for themselves. As capitalist leaders believe that the economy would be adversely affected if individuals had no reason or reward to work hard in life and to strive to reach their long-term goals.
3. In general, socialists believe that everyone should be granted the same quality of life
Furthermore, in socialist societies, the leaders in power believe that everyone in life no matter what their occupation is should have the same quality life and should live in the same type of houses and drive the same type of careers as everyone else. Regardless of whether an individual has studied hard to become a fully qualified doctor or works in a grocery store. Which most individuals in capitalist countries would find extremely unfair!
As most individuals wouldn’t be happy following socialist policies and doctrines, the majority of countries in the world, especially western countries, tend to be capitalist, instead of socialist. However, there are some countries in the world such as North Korea, which follow socialist policies and doctrine. While some other countries such as China choose to mix capitalist policies and socialist policies.
In conclusion, hopefully after reading about 3 of the major differences between socialist countries and capitalist countries, you’ll have a far better understanding of the ideals which both political ideas focus on. Which happen to be competing ideals, which have little overlap.