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Introduction

      With the development of human society, people began
to pay more and more attention to how to build a society. Therefore, a lot of
ideologies have emerged in the last few centuries. For instance, capitalism and
socialism. Both of socialism and capitalism influence different societies a
lot. Socialism in Union of Soviet Socialist Republics(USSR), the People’s
Republic of China(PRC), the Republic of Cuba(CUB) and Capitalism in the United
States of America(U.S.A.), the Republic of France(FRA), the Republic of Korean(KOR)
are well-known in each society. Since then, these political ideologies played a
more important role in the world. However, there are quite a lot differences
between socialism and capitalism, such as different values, political systems
and economic systems. Since then, people had argued which ideologies were better
for more than one hundred years.

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This essay will compare socialism and capitalism and discuss the
differences between these two ideologies, focusing on features, political
systems and economics, also I will introduce the perspectives on socialism and
capitalism.

 

Capitalism on political system

Capitalism is an
economic system which is characterized by a free market and government
intervention in the economy (Pettinger, Capitalist Economic
System, 2017).
Capitalism has six basic characteristics: private property, freedom of
enterprise, freedom of economic choice, role of interest, competitive market
system and limited government (Smith, 2000).
On the one hand, those characteristics have some benefits to the society. The
United States and the United Kingdom, for instance, are usually considered
prime examples of capitalist countries. At first, economic freedom helps
political freedom. Capitalism in those countries like the U.S.A. and the
UK mostly implement the multi-party democracy system. In a multi-party
system, voters may have multiple different options. Therefore, every citizen’s
political interests are likely to be satisfied. Secondly, the maximum economic
success requires efficiency. Enterprises in capitalist society face highly
efficient production incentives and products of demand. These incentives create
pressure to cut costs and avoid wastage. State-owned enterprises tend to be
inefficient. Thirdly, there is more innovation for companies looking for new
product sales and cheaper ways of working (Ollman, 1999). In the end, the
foreign investments are attracted by the new opportunities for earning profits
which cause by free market.

On the other hand, capitalism
also has some disadvantages. Firstly, Monopoly power over product and labor
markets limits advantages. The private ownership of capital gives the
enterprise monopoly power in the product and labor market. Monopoly power
companies can use its position to charge higher prices. Secondly, distorted
investment priorities, as wealth translates directly into making the most
profit, not what most people really need. Also, Social costs (pollution) and
benefits (health care) often ignores. A profit capitalist firm is likely to
ignore negative externalities, such as pollution from production, this will
harm living standards (Pettinger, Pros and cons of
capitalism, 2017).
At last, capitalism will increase the unemployment because human can be
replaced by machines in different areas.

Socialism on political system

In contrast to capitalism countries, the systems are
totally different in socialism countries. Socialism define as
a centrally planned economy in which the government controls all means of
production. Collective ownership, powerful government and economic
planning, clear objectives, freedom of consumption, economic, social and political
equality are the most obvious five features of socialism. These features have a
lot of advantages to the society. At first, because of central planning and
public ownership, most socialist countries implement one-party system like
China, the North Korean and Cuba. According to the (Cox & Alf, 2014), the efficiency of economy
under socialism is better than the one under capitalism. Because of that, the
socialist economy may grow at a much faster rate than the capitalist economy.
The U.S.S.R. and China already proved that. In addition, in the socialist
economy, because of the lack of personal ownership of private means of
production, accumulation of intimate capital, and privy profits, income
inequality is less than that of a capitalist economy. All citizens work for the
well-being of the nation, each paying in accordance with their abilities,
education and training.  Another advantage of socialism is that it does
not have the monopoly practice of capitalist society (Verdery, 1996). In socialism, all
means of production have always belonged to the state, bad competition and
monopoly have been eliminated. Finally, economic stability is due to the fact
that the production and consumption of goods and services are managed by the
central control in accordance with the goals, objectives and priorities of the
plan, so neither overproduction nor unemployment exist in a socialist economy (Cohen, 2009).

          However,
there are some negative effects which socialism bring to the society. First of
all, there is no freedom of consumers’ choices in
the Socialist Economy. Consumers do not have the freedom to buy anything they
want. Also, in such a society, there is no freedom of employment. Everyone need
to do the job which is provided by the government. But people cannot give up or
change it (Socialism Pros and Cons List, 2015). Then, under the
socialist system, we allocate resources at will. The economic planning
department always make mistakes because a lot of jobs are based on wrong
experiment. After all, it is said that the socialist economy is a bureaucratic and corrupt economy. It works like a
machine, so it does not give people the necessary measures to work hard. People
work because of fear of superiors, not for any personal gain or profit.

Conclusion

          No
system is perfect. Both capitalism and socialism have merits and demerits. I
suppose that we should learn from each other. For example, New Deal, the
domestic program of the administration of U.S. President Franklin D. Roosevelt
between 1933 to 1939. The United States government use central planning which
was from socialism. Also, Chinese economic reform from 1980s, the Chinese
government adopted market economy which was from capitalism. Both of China and
America had achieved tremendous success.

          To sum
up, capitalism is totally differed with socialism, although it has a lot of
advantages like political freedom, efficiency and attracted foreign
investments, it also causes a lot of problems such as unemployment, pollution
and inequality. In contrast to capitalism, on the one hand, socialism has
better efficiency, less inequality and less unemployment, but there are some
drawbacks of socialism like no freedom of consumers’ choice, no freedom of employment
and a bureaucratic and corrupt economy. As far as I am concerned, both of
capitalism and socialism have positive and negative effects. We should take the
essence and discard the dregs, make full use of the advantages from each other
and improve ourselves.

 

 

 

 

 

 

 

 

 

 

 

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