Why Is Capitalism Better Than Socialism

Capitalism vs. Socialism It is very hard to imagine what life would be like in a socialist society. Capitalism and socialism have been very controversial topics in the past, and still are today. Socialism is the economic system under which the government owns and administrates the means of production, and a distribution of goods and wages which are distributed unequally on the basis of the work performed. Capitalism is the economic system under which the ownership of goods and services are privately owned, and decisions concerning pricing, investments, and distribution are determined in a free market system. Primarily on the basis of competition between businesses (Walter). These are two very different forms of economic systems and both have been used throughout history. Capitalism is a better economic system than socialism because it allows for competition, new technology, and motivation for people.

The less the government is in control the better, if the government controls everything than there is no reason for businesses to continue to try to get better. Many believe that socialism is better because it limits competition and allows producers the ability to artificially control the price of goods (Berger). The truth is that there will be loss and profit in a capitalist society, but the best way to balance this is through competition between business and people. Adam Smith was an advocate for capitalism and wrote a book called the Wealth of Nations in 1776. It was during his time that he realized the tight control of the market by the government limited economic growth and innovation (Goodwin). When the government tries to regulate business it can cause an economic downfall because there is no longer a demand from the consumers. Overall, the government intervening with competition will always cause more harm than