Socialism vs capitalism

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Socialism vs capitalism

  1. 1. Socialism vs. Capitalism
  2. 2. Capitalism (Free market economy) – It is an economic system in which private individuals own all the material means of production & all economic activities are undertaken for purpose of profit.
  3. 3. Features of capitalism - Right to private property. - Right of inheritance. - Freedom of enterprise. - Freedom of choice for consumers. - Profit motive. - Competition. - Price mechanism on market forces. - Less role of government.
  4. 4. Merits of capitalism - Efficient utilization of resources. - Rapid economic growth. - Capital formation. - Democratic nature. - Innovation.
  5. 5. Demerits of capitalism - Concentration of economic power. - Economic instability. - Lack of maximum social satisfaction at minimum social cost. - Social waste. - Rise of monopoly. - Social discrimination. - Loss of human values.
  6. 6. Socialism (controlled economy or communism) – In this state owns & controls all means of production. Decisions pertaining to production, distribution are made through central planning. The state dictates the consumption pattern. It is based on the principle: “from each according to his ability to each according to his needs”.
  7. 7. Features of socialism - State ownership of means of production. - Central economic planning. - Social welfare. - Equality of opportunity. - classless society. - Absence of competition.
  8. 8. Merits of socialism - Social justice. - Economic stability. - Rational allocation of resources. - Higher economic growth. - Absence of class struggle.
  9. 9. Demerits of socialism - Concentration of economic power in the state. - Lack of incentive & initiative. - Loss of consumer sovereignty. - Loss of occupational freedom. - Inefficiency & low productivity. - Corruption.

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