Capitalism And Socialism Flashcards, test questions and answers

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What is Capitalism And Socialism?

Capitalism and Socialism are two popular economic systems that have been adopted by different countries around the world. Capitalism is an economic system where private individuals or businesses own the means of production, such as factories, land and machinery; and derive their income mainly from profits gained in a free market. Socialism is an economic system where the government owns the means of production and distributes resources according to need rather than profit. This essay will discuss both capitalism and socialism, highlighting their benefits and drawbacks. Advocates of capitalism argue that it provides greater incentives for innovation since those who make successful investments are rewarded with higher rates of return on their capital. The competitive nature of capitalism also encourages firms to produce better quality products at lower prices in order to gain more customers, which improves consumer welfare overall. Additionally, individuals have more freedom under this system because they can choose how to invest their money without government interference or control over what kind of businesses they can start or run.However, some people criticize capitalism because it leads to social inequality due to unequal distribution of wealth among citizens based on their ability to earn profits from investments or ownership stakes in companies. In addition, large corporations often dominate markets and use monopolistic power to drive up prices while limiting choices for consumers. Furthermore, many capitalists prioritize short-term gains over long-term sustainability which could lead to environmental degradation due to lack of regulation on resource usage or pollution output levels. On the other hand, socialists contend that equality should be prioritized over profitability since it allows everyone access to basic necessities like healthcare & education regardless of income level or class status. They believe that public ownership & control over resources will ensure these services are adequately provided while preventing exploitation by wealthy elites who may not have society’s best interests at heart when making decisions about allocation & pricing structures in a capitalist economy. Additionally, socialism can offer workers more job security through collective bargaining agreements between labor unions & employers as well as provide them with shorter workdays so they can enjoy leisure time away from work responsibilities & stressors associated with productivity demands placed upon them by capital owners seeking maximum returns from investments made into business operations managed by employees who do not share in any resulting profits generated through increased efficiency objectives met within established deadlines set forth by management teams composed primarily (if not solely) out members belonging exclusively within upper echelons seated immediately beneath CEO’s…