Capitalism and socialism are too very different ways of managing an economy. These two conflicting approaches have been used by different countries around the world and both sides continue to have strong support. There have also been countries like the UK that have attempted to mix the two economic philosophies. The main difference between capitalism and socialism is in regards to how resources in a country should be owned and controlled.
What is Socialism?
Socialism starts with the assumption that if an economy is not somehow controlled it will lead to a situation where the rich get richer and the poor will have much less opportunities in life. Socialism does not believe that market forces by themselves are fair, but rather view them as only benefiting the rich and powerful. Socialist philosophy argues that the resources in a country should be owned by the government or the public and that they should be controlled by cooperation between humans rather than any type of market force. The ideas of socialism grew out of the unfairness that many saw in society in previous centuries; where the rich had everything and the poor struggled to get through each day.
Another crucial difference between socialism and capitalism is in regards to wealth. Capitalists believe the individual should work for their own wealth and get to enjoy what they work for. In a socialist economy though, the aim is to work to make society richer and then this is divided among all the members of that society. In a socialist society it is usually the government that decides who get what, but the emphasis is on each individual working for the benefit of the group rather than themselves.
What is Capitalism?
The fundamental basis of capitalism is that it is competition that makes a society rich and ensures fairness. This drive to succeed creates market forces and it is this that decides how goods are distributed and who gets to receive the larger slice of the cake. Supporters of this philosophy believe that it is crucial that the individual be able to create wealth for themselves as this is what drives competition. It is also generally believed that any attempt to interfere with market forces is a bad thing. In a capitalist society the individual will own different resources and the only real role of the government is to ensure that people play using the agreed upon rules.
Supply and demand is what capitalists believe encourages fairness in this type of system. This will not only determine the price of goods and services but also the price of labor — the wages that people get for their work. It is argued that if the supply and demand are not interfered with they will create the fairest situation.
It is unlikely that the debate between socialist and capitalist supporters will end any time soon. Both sides can provide a compelling argument and this is why people can be so passionate about their beliefs in this regard.