Sociology: Capitalism and Socialism and Capitalism Are Essay

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Sociology: Capitalism and Socialism

Socialism and capitalism are fundamental schools of thought in the study of economics, with opposing views regarding the government's role in economic operations and economic equity. Socialism is against inequality, and holds that the government has a duty to reduce, or eliminate the said inequality through initiatives that are beneficial to the poor. Such initiatives could include subsidized or free social services such as healthcare and education, progressive taxation, etc. Capitalism, on the other hand, believes that the government, compared to the private sector, is an inefficient resource allocator. Due to this, its role should be limited; and the free forces of demand and supply left to allocate economic resources.

Similarity between Socialism and Capitalism

The most fundamental aspect of similarity between the two schools of thought is that; both recognize the concept of scarcity of economic resources (Lawson, Jones & Moores, 2000). Capitalism and socialism only offer opposing views regarding how these scarce resources can best be allocated among the insatiable human wants.

Differences between Socialism and Capitalism

Socialism and capitalism differ in the areas of economic equality, property ownership, and pricing systems, as summarized in the tabular representation below (Pettinger, 2013).

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School of Thought

Socialism

Capitalism

Economic Equality

Socialism advocates for equal distribution of economic resources, in order to ensure that both the poor, and the rich have equal outcomes and chances of advancement (Pettinger,

Capitalists put less emphasis on equal resource distribution. They hold the view that inequality is, in itself, a source of innovation, as it pushes the poor to do their best, in an attempt to survive (Pettinger, Inequality is, therefore, key in the growth and development of the economy.

Property Ownership

Socialism holds that the state should, not only own, but also control all factors of production (Pettinger, In so doing, the state will have ultimate control over the entire production within a country's borders.

All property, including the factors of production, should be owned and fully controlled by the private sector.

Price Mechanisms

The state sets the prices of goods and services produced locally, based on their degree of essentiality and the people's income levels.

The free forces of demand and supply determine the equilibrium prices and levels of productions (Pettinger,

The Critique of Socialism and Capitalism

Both socialism and capitalism thoughts have been criticized on a number of grounds, as has.....

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