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Capitalism vs. Socialism: Comparing and Contrasting

Debates around the economic model of the social structure have not stopped since the XIX century when Karl Marx introduced his leftist paradigm. On the one hand, some individuals believe that capitalism is the form that guarantees freedom and progress that they value the most. On the other hand, some people believe that socialism must be the next step of human social evolution.

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First, if one tries to compare the history of these paradigms, one could learn that capitalism is an older formation and idea than socialism. Capitalism started to spread in the Western World since the beginning of the Industrial Revolution in the XVIII century. As for socialism, it was first invented as a project and then implemented in some countries: the Soviet Union, China, a reasonable number of Latin American, South-East Asian, and African countries where it is still maintained till today. At some point, most countries posed this dilemma to their policy-makers: the United States, Britain, France – however, capitalism stays the dominating model. Hence, capitalism has been a significantly older model, while the socialist idea received a portion of popularity in the XIX-XX centuries.

Secondly, it is essential to compare the level of government participation in the economy in the context of the structures discussed. As for socialism, it is based on a planned economy, which implies extensive state involvement. There may be different dimensions of the latter: taxation, partial ownership of specific industries, determination of the national demand, subsidizing of some realms of the economy that have to do with vital spheres of public life. As for the ones defending the paradigm of capitalism, they believe that state participation must be as minimal as possible. Some libertarians even call taxation a theft as it is seen as a forced withdrawal of money. In capitalism, individuals enjoy the economic freedom that is only determined by the economic law of demand and supply. In other words, these socio-economic models have nothing in common speaking of government involvement.

Another point to be made is the role of the philosophical background behind these models. Socialism is an eschatological concept that believes it is a step towards total equality in communism. There is an understanding that the common good is the most important aim that a society may have, as it presumably means the wealth of each member of the community. However, there is a poles apart opinion on this. Pro-capitalists believe that society needs to provide citizens with opportunities and the freedom to use those opportunities in the innovative, creative ways they come up with. Communism is seen as unreal. Therefore, both capitalism and socialism aim to guarantee members of the sociawell-beingng while attaining that goal with poles apart means. If socialism finds its way to personal happiness via the common one, for capitalists, it is a zero-sum game where the wellbeing of one means a flaw for another one.

To conclude, despite the ongoing debate, socialism and capitalism conceptually do have common goals; however, their methods and attitudes differ dramatically. Capitalism, as a concept, was established and practiced long before the socialist model, which still stays less preferable for many countries. Moreover, the capitalistic approach denies the role of the state, while socialists believe that it may be the guarantor of economic and social prosperity. Finally, capitalism does not have the final goal – it directly goes for the wellbeing of the individuals, who deserve it from the market perspective. Meanwhile, socialism has a more ambitious objective of reaching communism and universal happiness.

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StudyCorgi. (2022, February 14). Capitalism vs. Socialism: Comparing and Contrasting. Retrieved from https://studycorgi.com/capitalism-vs-socialism-comparing-and-contrasting/

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StudyCorgi. 2022. "Capitalism vs. Socialism: Comparing and Contrasting." February 14, 2022. https://studycorgi.com/capitalism-vs-socialism-comparing-and-contrasting/.

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StudyCorgi. (2022) 'Capitalism vs. Socialism: Comparing and Contrasting'. 14 February.

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