Socialism Vs Capitalism

"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of
miseries."

Nothing can better sum up the two political systems - socialism and communism, than this quote by Winston Churchill.
Although, there are numerous systems adopted by countries today to run their economies, none are as debated,
compared and discussed as socialism and capitalism. If we go by today's scenario - China, Cuba and North Korea are the
countries which have socialist economies, i.e. based on socialism principles, while the United States of America, Canada
and Great Britain have capitalist economies, based on capitalism principles. Have you ever thought how did these political
systems emerge? Which has been the more successful one between the two? Let us compare socialism vs capitalism on
various counts, and find out the answers.

Socialism Vs Capitalism : Origin

Although capitalism had always been present in previous civilizations, yet it was for the first time introduced as an
economic and political system, by Adam Smith in "The wealth of nations", published in the year 1776.

Socialism came forth on its own, in the eighteenth century, during the industrial revolution when the workers lived in
miserable conditions while the factory owners grew wealthier by the day. The workers formed trade unions and wanted a
share in the profits of the factory owners. Socialism was formally introduced as a political philosophy in the 1848 book
"The Communist Manifesto", written by Karl Marx and Friedrich Engels. Read more on Karl Marx quotes.

Socialism Vs Capitalism : Definition

Let us compare socialism and capitalism by learning about their definitions. A capitalist economy is one in which the
means of production are owned and controlled by a class of people, known as the "capitalists". The capitalists are the
ones who have the capital to make investments in factories, machinery and who pay workers their salaries. In today's
times, capitalism refers to a form of political system in which means of production are owned by the private sector and
there is lack of central planning by the government, with regards to running the businesses.

A socialist economy is the one in which the means of production are owned and controlled by the workers. The ownership
can be in the form of trade unions or cooperatives or through the state itself. In today's times, socialism refers to a political
system where ownership and control of means of production lies with the people as a whole or with the state, with lots of
emphasis on central planning, by the state. Communism, another social system, evolved from socialism. Read more on
difference between socialism and communism.

Difference between Socialism and Capitalism

To truly understand what is socialism and capitalism, the difference between the two have to be completely understood. The
capitalists believe that there should be a complete non-interference by the government in the economy. They believed
that an economy can run efficiently on its own through the natural mechanism of demand and supply. Capitalism is a
political theory that advocates competition - between the sellers to supply a particular good or service, and between the
buyers to get the service or goods. The sellers compete among each other so that they make the maximum profit, buyers
compete among themselves to get the best deal while purchasing the goods. Capitalists strive for a free market economy
and also advocate "private ownership" of means of production.

Socialists, on the other hand, propagated that the state or the government is the one which should be in total control of
the planning, production and distribution process. The political theory of socialism advocates cooperation rather than
competition, which is capitalism's mainstay. Socialists believe that wealth or profits made from means of production
owned by the state, will be used fairly and for the welfare of all the people, rather than just the elite class. Socialism is
based on the philosophy that an individual will become more ethical and dedicated towards his work, when he is receiving
what he wants and when he is working for everyone else in the society and thus, people do not need any kind of
"competition" to propel them to work.