A Capitalist Economy vs Socialist Economy

A Capitalist Economy vs Socialist Economy

There are a variety of economic systems today, which can influence how

prosperous we will be as individuals or as a group. Socialism is an

economic system where the government will be greatly involved in the

economy. In a socialist economy the government can control many

industries, provide public institutions such as health care and

education, and equalize incomes of the population. A socialist

economy is one of low unemployment and stability, where the government

sets production quotas and price regulation upon their perception of

the needs of the economy. On the other hand, a capitalistic economy

is an economic system where there is a very limited amount of

government involvement. The capitalistic economy is based on the

demand of consumers and the supply of producers.

There is a great advantage of living in a nation where there is a low

amount of government intervention in the economy, because government

intervention reduces the freedom of markets, causes a slow growing

economy, and exploits the consumers in the economy.

Firstly, high government intervention reduces the freedom of the

markets. When the government controls an economy, the population is

taxed in order to fund national programs. Taxing the consumers of the

economy will reduce the personal spending, therefore causing the

economy to grow in areas of public service such as education and

health care instead of technology and fashion. Furthermore, the

industries in a social economy are directed by quotas, which is

production targets set by the government. The quotas don’t often

represent the need in the economy, therefore causing a surplus or a

deficit of products, which leads to small profits....

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industries in a social economy will affect the price, variety, and

quality of products produced in their economy.

In conclusion, there is a great advantage of living in a nation where

there is a low amount of government intervention in the economy,

because government intervention reduces the freedom of markets, causes

a slow growing economy, and exploits the consumers in the economy.

Capitalism provides a marketplace where industries compete in order

attract more consumers, therefore providing more efficient,

qualitative and plenty of variety for consumers. This efficiency,

quality, and variety will help the economy grow in whatever way it

wants to, making capitalism the most flexible economic systems. The

nature of human beings is, one is satisfied, when he/she has provided

the necessities for himself first, then the people around him.