Both aspects of socialism vs capitalism are considered to be the two major aspects of the economic systems. The majority of the developed countries all over the globe follow the major concepts laid under the theory of socialism and capitalism. It is the depth to which the respective government would exercise control over the economy that constitutes to be the major difference between the principles of socialism vs capitalism.

The major difference between socialism vs capitalism

As per the discussion provided in this report on socialism vs capitalism, the socialistic type of economy would keep on trying to eliminate the existing economic inequality. By the concepts of socialism, the poor would get high aid from the government, though the business firm would find it hard to aggregate the required capital or turnover (Hoppe, 1989). Many social benefits, like free healthcare and free education, could be accessed by the common public in the socialistic approach. At the same time, the capitalistic form of the economy would focus more on providing prosperity to the private entities. The resources are put aside for the private firms, and almost zero interference is there on behalf of the government in it. It is by establishing free operating markets that the wealth is distributed among all the units of the economy.

The best example of the capitalistic form of economy is of the US government. In the European country itself, there could be observed some developed countries with the socialistic framework. The major one of them is Western European countries and Scandinavian countries. Though the American economy is considered to be purely based on capitalistic principles, the modern case would make it clear that the government had implied the assimilation of both socialism vs capitalism (Kornai, 2008).

Definition of capitalism
As per the discussion provided in the above section of this article on socialism vs capitalism, the ownership and control over the manufacturing activities, business, properties, etc. is practised by the private entities in the capitalistic setup of the economic system. It is based on the concept of supply and demand that the magnitude of goods and services to be produced is decided in the economy. By following this concept, it could be ascertained that the quality of the products is sustained in a cheaper and productive approach (Shaw, 1984).

The condition of laissez-faire or free market could be observed in the economy which follows the concept of capitalism. There is no restriction for individuals to take active participation in the economy. It depends upon the will and decision of the citizen on where to invest their money. The same independence lies in the type of product or services to be generated. It is with the only true absence of government interference that the concept of true laisses-faire could be enjoyed by the citizens. Thought the true laisses-faire is implied by no country, and a certain level of government interaction could be observed in most of the economies.

The factor of income inequality is not even a matter of concern for the components of capitalist economies. It is the presence of financial inequality among the components of the economy that theoretically increases the magnitude of innovation and competition, which is very crucial for the dynamic growth of the economy. The utilization of the general workforce is not under the economy which works on the format of capitalism. Hence the major backdrop is the humungous rate of unemployment while the economic recession happens. It is based on the demand and requirement of the public that the products are being generated in the market and supplied for customized interests (Burawoy & Krotov, 1992).

Definition of socialism
The means of production are collectively retained or owned by a very unit of the economy that follows the framework of socialism. The business and other enterprises in socialism are majorly controlled by the government, which is democratically elected by the citizens. Though in some of the socialist economies, the working class or their cooperatives control the economy as an exception. Some of the socialist economies allow the presence of individual enterprises, but they would be levied with huge taxes and reformations.

The basic principle followed in the concept of a socialistic framework is to contribute to the economy as per the personal capability and earn as per the contribution. Thus it is ensured that every unit would get an equal part from the growth registered by the national economy. The wages to the employees or the workers are only dispensed after deducting a particular section that would be used to carry out the social programs. It is to serve the common good, which is considered to be the primary objective of socialism (Pearce, 1991).

The major contradiction of the socialistic ideologies with that of the capitalistic ideologies in this socialism vs capitalism is that it would try to reduce the wealth gap between the rich and poor people. Hence some adverse measures are taken by the government to control the local labour market. By taking this stance, the government would effectively reduce the rate of unemployment in the nation even though the local economy would have to face a huge setback.

Critical analysis of socialism vs capitalism
It is the aspect of socio-economic equality and the level of control exerted by the government that is majorly debated among the groups who support socialism vs capitalism.

Consumer prices
It is the components of free-market forces that determine the fluctuations in consumer prices under the capitalistic framework. Though the major counter put forward by the socialist regarding this principle is that it would encourage the particular companies to emerge as monopolies. It would lead to the inconsiderate exploitation of power that enables them to manipulate heavily with the prices, which may be labelled way above the production costs.

It is seen in this socialism vs capitalism article that it is the government agencies that control the level of consumer prices in the socialistic economy. The counter by the capitalists to this approach is that the move could pose a high scarcity of the essential products in the market. The instance of Venezuela could be taken as the best example. Most of the citizens in Venezuela sleep hungry as per the report of Human Rights Watch. Around 3 million citizens have left the country because of the scarcity of food, and even it was raised as the political weapon in the country. The economy has been worsened to a very abysmal level by the deteriorating health of the population and the hyperinflation. These have all occurred because of the socialistic policies implied under President Nicolas Maduro (O’connor, 1988).

Income inequality and ownership
The natural right of the citizens could one be ensured if the ownership of property is allocated to them as per the supporters of capitalism. People could control their own affairs only if they have this power entailed to them. As per the argument of the supporter of capitalism, it is the private entities that could utilize more efficiently the available resources as compared to that of the government agencies. It is more competitive when the free market decides the level of profit or loss endorsed by someone. The economy would also get an additional boost since the people would have the power to invest their money as per their will.

Though as contrary, the concept of dividing the property to everyone is strictly followed in the socialistic framework of the economy. The major criticism made against the capitalistic approach under this aspect is that the approach of allotting private ownership helps the rich segment of the society to accumulate more and more wealth. It would be hence pointed out in socialism vs capitalism article that it is at the mercy of the rich that the gap in between the rich and poor would later depend upon. The occurrence of income inequality would make a dee rooting impact on society, and hence the government should endorse the programs that would help the poor. The situation could be further made impartial by levying higher taxes on the rich segment of the society.

Innovation and efficiency
It is the profit accrued while conducting the trade that would act as the major motivation for the private entities and hence requires a proper innovative and productive mindset. The higher level of competition would eventually benefit the customers since the manufacturers would provide the products at cheap competitive prices. Though there is a high possibility of a business being getting failed in the capitalistic format, the same would turn out to be an opportunity for another entity. It is the approach of the concept of creative construction that would lead to the emergence of much better and efficient entities (Stephens, 1979).

In this socialism vs capitalism article, it is highly being argued by the supporters of the socialist framework that the system would prevent the enterprises from being closed down or entering into a huge loss. The government would prevent the emergence of any monopoly in the market by imposing strict rules and policies. Though it is being criticized by the capitalists that the same situation would bring stagnation and inefficiency in the production center, provided the fact that the worker would not get any incentive for providing extra contribution.

Taxation and healthcare
It is fiercely argued by the supporters of socialist behaviour that it is the duty of the government to provide the public with the required help and social services. The factors like education and healthcare services should be considered as an essential one and should be provided free of cost. The establishments like health clinics and educational enterprises are owned by the government in the socialistic setup.

Though the contrary to the socialistic vision is being debated by the people who support the capitalistic theories. It is being argued by them that the interference of the government leads to the occurrence of high chances of stagnation, lack in productivity, irresponsibility, etc. within the organization since no one is motivated towards the incentives for higher performance.

Modern-day socialist and capitalist countries
It would be very hard to trace the countries which have purely embraced the sole ideas of either capitalism or socialism. The majority of the countries have implied both the principles of socialism and capitalism in the local economies (Schumpeter, 2013).

Since the governments would provide basic facilities like pensions, healthcare, and basic education, the economic structure in countries like Denmark, Norway and Sweden are termed to be socialistic in nature. It has been observed that allowing inconsiderate private ownership would lead to a higher gap in income and wealth. It is being observed globally that more than 68 % of the wealth is retained by less than 9 % of the population. The situation has occurred because of the prevalence of capitalism.

Apart from the concepts of capitalism, an amalgamation of both the principles of communism and socialism could be observed in the framework of countries like North Korea, Cuba, Russia, China, and Vietnam. However, the strong biasedness towards the principles could be seen in the governments of Ireland, Great Britain, and France. The local government in these countries have heavily invested in social welfare activities. However, it could also be observed that the countries have allowed mostly private ownership in the production sector of their economy.

Though the economic framework of the USA was considered to be the epitome of a socialistic system, the current arrangements and changes in it had placed it even below the ranking offered among capitalist countries. The ranking was conducted as per the study conducted by the heritage foundation. The same drop could be traced in the ranking of the Economic freedom index. The considerable drop in the index had been observed because of the additional government regulations on the private business entities. As per the socialism vs capitalism article, the concepts of socialism could even be traced to the content provided in the preamble of the American constitution. The preamble specifically and clearly instructs to promote general welfare activities. The government had implied various social safety programs like food stamps, social security, housing assistance, Medicare, etc., in the local communities.

References
Hoppe, H. H. (1989). Theory of Socialism and Capitalism, socialism vs capitalism, A. Ludwig von Mises Institute.

Kornai, J. (2008). From socialism to capitalism: eight essays. socialism vs capitalism, Central European University Press.

Shaw, B. (1984). The intelligent woman’s guide to socialism and capitalism. socialism vs capitalism, Transaction Publishers.

Burawoy, M., & Krotov, P. (1992). The Soviet transition from socialism to capitalism: worker control and economic bargaining in the wood industry. socialism vs capitalism, American Sociological Review, 16-38.

Pearce, J. L. (1991). From socialism to capitalism; the effects of Hungarian human resources practices. socialism vs capitalism, Academy of Management Perspectives, 5(4), 75-88.

Stephens, J. D. (1979). The transition from capitalism to socialism. socialism vs capitalism, Springer.

O’connor, J. (1988). Capitalism, nature, socialism a theoretical introduction. socialism vs capitalism.

Schumpeter, J. A. (2013). Capitalism, socialism, and democracy. socialism vs capitalism, Routledge.

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