A few days ago, I was in conversation with a family friend, who I revere like my maternal uncle. We were talking about why Brahmins are put down by the other castes. Why today’s representatives of the supposed upper caste are almost hated by the other castes? My Uncle told me to compare the situation with that of Socialism Vs Capitalism. That gave us at A Journalist Reveals the idea of writing on the subject. Though the stuff mentioned in this article will be repetitive, people have forgotten several issues related to the same. Let’s start with what each system represents, separately.
Socialism, as an economic system, insists on the social ownership of the resources of the country, means of production of the products and the products, themselves. It involves the public, cooperative and collective ownership or citizens’ equity ownership.
In Capitalism, as an economic system, the means of production and their operation for profit are privately owned. The distinction with Socialism includes the private ownership of properties, accumulation of capital, laborers on wages, voluntary exchange, the existence of a price system and competitive markets.
Socialism Vs Capitalism
In Socialism, the economy is under the direct control of the government and a central planning authority decides the policies, providing for greater social welfare and this also decreases fluctuations in business. On the other hand, Capitalism can afford greater economic freedom, the consumer can choose what they want and there is economic growth, as well.
To illustrate the difference between the 2, let’s take a look at a classroom situation where the professor wanted his students to explore the 2 economic systems:
The professor was explaining the difference and asked his students what they would support. Everybody chose Socialism where there is equality. The professor told them, “Ok. Then, let’s use the principles of Socialism in our class. We will have a test next week and everyone will have equal marks irrespective of their performance in the test.”
The next week’s test was written and the results came. All students got zero! How had this happened?
The professor explained, “The below average students knew that the high-scorers would be performing well and their hard work would be shared with them, as well. The high-scorers found that there was no point in working hard since their grades would be shared with the others. This is why Socialism did not work. On the other hand, in Capitalism everybody would work hard and receive the result that they deserve.”