Capitalism

Capitalism is an economic system in which the means

of production are privately owned and operated for
profit, usually in competitive markets.
In other words; An economic system in which investment
in and ownership of the means of production,
distribution, and exchange of wealth is made and
maintained chiefly by private individuals or corporations.
OR
Capitalism is the social system which now exists in most
countries of the world. Under this system, the means for
producing and distributing goods (the land, factories,
technology, transport system etc) are owned by a small
minority of people. We refer to this group of people as
the capitalist class. The majority of people must sell their
ability to work in return for a wage or salary (who we
refer to as the working class.)

 Benefits of Capitalism
In years 10001820 world
economy grew six-fold,in years
18201998 world economy grew
50-fold
Provides Choice to customers
Provides valuable goods and
services
Capitalism actively rewards
positive traits like hard work
Similarly, it punishes negative
traits such as laziness and theft
Narrows the gap between common
person and wealthy
Provides opportunity to realize
dreams and desires
Capitalist societies usually do not
have largeblack markets
Build on democracy
Social Good

 Major limitations/
Criticism:

Downfall of work ethics

Free Market + Self Interest
Accumulation of wealth
Encourages inequality in a
society
Business lobbying with
government
Monopolistic tendency
Human resource
exploitation
Results in great disparities
between income of people
owning the capital
resources and others

Socialism

Collective ownership and democratic control of the

material means of production by the workers and the
people
Socialism is a term applied to an economic system in which
property is held in common and not individually, and relationships
are governed by a political hierarchy. Common ownership doesn't
mean decisions are made collectively, however. Instead, individuals
in positions of authority make decisions in the name of the
collective group.
Socialists argue that socialism would allow for wealth to be
distributed based on how much one contributes to society, as
opposed to how much capital one holds.
A primary goal of socialism issocial equalityand adistribution
of Wealth based onones contribution to society and an economic
arrangement that would serve the interests of society as a whole.

Socialism as we know it today, most commonly refers to

"market socialism," which involves individual market
exchanges organized by collective planning.

Difference between socialism and communism is that

communists directly oppose the concept of capitalism, an
economic system in which production is controlled by private
interests. Socialists, on the other hand, believe socialism can
exist within a capitalist society.

Features of Socialism

Social Ownership of means of production

Existance of public sector
Decisive role of Economic Planning
Production guided by Social Benefits
Abolition of exploitation of labour

Benefits of Socialism
i.
ii.
iii.
iv.
v.
vi.

Better salaries
Stable Environment
Eliminates poverty
Better Products
Fulfills survival need
Opportunity for citizens to explore noneconomically-productive pursuits

Criticism of Socialism

Distorted price signals

Suppression of economic democracy
Slow Technological advancements
Minimize self management
Reduced incentives

Mixed Economy
Any economy in which private corporate
enterprises and public sector enterprises exist
side-by-side, and decisions taken through market
mechanism are supplemented by some form of
partial planning, is to be described as a mixed
economy.
This system overcomes the disadvantages of
both the market and planned economic systems.

 Provides a clear demarcation of the boundaries of

public sector and private sector so that the core
sector and strategic sectors are invariably in the
public sector.
The government intervenes to prevent undue
concentration of economic power, and
monopolistic and restrictive trade practices
The rights of the individual are respected and
protected subject only to the requirements of
public law and order and morality

Features
Resources are owned both by the
government as well as private individuals.
i.e. co-existence of both public sector and
private sector.
Market forces prevail but are closely
monitored by the government.
Monopoliesmay be existing butunder
close supervisionof the government.

Advantages

Producers and consumer have sovereigntyto

choose what to produce and what to consume but
production and consumption of harmful goods and
services may be stopped by the government.
As compared to Market economy, a mixed
economymay have less income inequalitydue to
the role played by the government.
A mixed economy represents an achievable balance
between individual initiative and social goals.

Communism
Communism, also known as a
command system, is an economic
system where the government owns
most of the factors of production and
decides the allocation of resources
and what products and services will
be provided.

Features
1.Government ownes land
2. Government ownes capital
3. Government allocates all scarce
resources.
4. Government controls prices for labor
and goods.
5. True communism(which has never
been achieved) all people are considered
equal and given a steak in industry ect