The primary difference between capitalism and socialism is that capitalism promotes innovation and personal pursuits, while socialism promotes societal fairness and equality. A capitalist economy accepts that income polarity is a reality in order to motivate high performers to develop new ideas and products for personal gain. A socialist economy tries to balance wealth through policies that ensure each person has an adequate amount of income, food and supplies.Know More
The holder of economic control also varies. In a capitalist system, private companies and individuals drive the economy by developing successful businesses, making money and paying workers. In socialism, the government controls the economy by allocating resources and coordinating the redistribution of wealth.
One advantage of a socialist economic is that unemployment is typically very low. The government assigns jobs to ensure people aren't out of work. In capitalism some level of unemployment is inherent based on the requirement of employers to have educated, experienced and qualified workers for each position.
One of the most important distinctions between the two economic systems is control of pricing. Capitalism is largely a pure economy, which means it has few government regulations, and companies, with influence from consumers, control much of the market's pricing. In socialism governments control pricing through price ceilings and price floors. Government pricing tends to cause shortages or excesses in supplies.Learn more about Economics
Some of the pros of capitalism include increased market efficiency and increased economic growth, while some of the cons include wealth inequality and lack of public services. Capitalism is an economic system in which the government exerts little influence, and private companies control the production of goods and services.Full Answer >
The four basic rights of capitalism include: the right to private property, the right to own a business and keep its profits, the right to freedom of choice and the right to freedom of competition. Freedom of competition allows businesses to compete by offering new products at competitive prices.Full Answer >
A recession is a period of time that lasts more than a few months where the economy gets significantly worse; a depression is defined as a severe recession where things plummet dramatically. A recession does not always lead to a depression, but a depression is always the result of a recession.Full Answer >
In business, "revenue" is a term that refers to all the money a company makes. Income, on the other hand, is the net profit of that company. In other words, income is the money left over after business costs have been covered.Full Answer >