The document discusses the differences between capitalism and socialism. Capitalism believes the free market is most efficient and economic inequality is acceptable, while socialism believes the government should reduce inequality through programs for the poor. While the U.S. is considered capitalist, all developed countries have some socialist programs. An extreme form of socialism is communism.

2.  Capitalism and socialism are somewhat opposing schools of thought
in economics. The central arguments in the socialism vs. capitalism
debate are about economic equality and the role of government.
Socialists believe economic inequality is bad for society, and the
government is responsible for reducing it via programs that benefit the
poor (e.g., free public education, free or subsidized healthcare, social
security for the elderly, higher taxes on the rich). On the other hand,
capitalists believe that the government does not use economic
resources as efficiently as private enterprises do, and therefore society
is better off with the free market determining economic winners and
losers.
 The U.S. is widely considered the bastion of capitalism, and large parts
of Scandinavia and Western Europe are considered socialist
democracies. However, the truth is every developed country has some
programs that are socialist.
 An extreme form of socialism is communism.

3.  Key Elements
 Capitalism: Competition for ownership of capital drives
economic activity & creates a price system that determines
resource allocation; profits are reinvested in the economy.
"Production for profit": useful goods and services are a
byproduct of pursuing profit.
 Socialism: Calculation in kind, Collective ownership,
Cooperative common ownership, Economic democracy
Economic planning, Equal opportunity, Free association,
Industrial democracy, Input–output model, Internationalism,
Labour voucher, Material balancing.

4.  Capitalism: Laissez-faire means to "let it be"; opposed to
government intervention in economics because capitalists
believe it introduces inefficiencies. A free market produces the
best economic outcome for society. Government should not
pick winners and losers.
 Socialism: All individuals should have access to basic articles
of consumption and public goods to allow for self-
actualization. Large-scale industries are collective efforts and
thus the returns from these industries must benefit society as a
whole.

5.  Capitalism: Can coexist with a variety of political systems,
including dictatorship, democratic republic, anarchism, and
direct democracy. Most capitalists advocate a democratic
republic.
 Socialism: Can coexist with different political systems. Most
socialists advocate participatory democracy, some (Social
Democrats) advocate parliamentary democracy, and Marxist-
Leninists advocate "Democratic centralism."

6.  Capitalism: Classes exist based on their relationship to
capital: the capitalists own shares of the means of production
and derive their income in that way while the working class is
dependent on wages or salaries. Large degree of mobility
between the classes. And freedom of religion.
 Socialism: Class distinctions are diminished. Status derived
more from political distinctions than class distinctions. Some
mobility. And freedom of religion, but usually promotes
secularism.

7.  Capitalism: The modern world economy operates largely
according to the principles of capitalism. The UK, US, and
Hong Kong are mostly capitalist. Singapore is an example of
state capitalism.
 Socialism: Union of Soviet Socialist Republics (USSR):
although the actual categorization of the USSR's economic
system is in dispute, it is often considered to be a form of
centrally-planned socialism.