Differences between Capitalism and Socialism Social Sciences Essay (Essay Sample)

Differences between Capitalism and Socialism
Name
Institution
Differences between Capitalism and Socialism
The majority of the global economies are based on capitalism and socialism. Capitalism entails an economic system where production and distribution of resources are governed by supply and demand. The system comprises fewer government controls, and a free-market system determines the prices of goods and services. Contrary, socialism is an economic system characterized by extensive government regulations on the production and supply of goods and services. Capitalism and socialism differ in many ways, such as asset ownership, income equality, development of innovation and efficiency, and consumer pricing determination.
First, capitalism and socialism views vary in assets ownership. Capitalism supports private ownership of properties, while socialism supports public assets ownership (Jahan & Mahmud, 2015). Capitalists claim that private property ownership gives citizens more control regarding personal businesses and the economy. The system provides a free market that provides all people with equal opportunities to profit, leading to efficient resource utilization. In addition, capitalism allows citizens to borrow and invest money leading to economic growth. On the other hand, socialists argue that private property ownership leads to unequal distribution of wealth and income, which benefits a small part of society (Patnaik, 2015). Therefore, socialists believe the government should have more control over assets ownership to ensure fair distribution of resources among the rich and the poor. Capitalism and socialism may vary concerning asset ownership, but both are geared towards developing a country's economy.