Capitalism and Socialism Their Benefits

Written Assignment –

Capitalism is an economic system, also called free-market, laissez-faire capitalism, or market economy, defined by two main characteristics. First, it is characterized by private ownership and disregards any form of force that intends to affect human relationships. In capitalism, private citizens use their resources to produce beneficial wealth. The force from the government, such as strict regulations, taxations, safety regulations, and control of the business environment, is banned in a capitalistic structure. The use of force is considered criminal because it compromises people's freedom (pp. 5-6). Thus, capitalism advocates for the protection of individual and property rights. Here, rights refer to individual and not group rights. Besides, there are no rights to things like the right to a job (p. 8). It is important to note that government can use force not as initiation but as a retaliation. This is acceptable in circumstances where it does so to protect individual rights. Thus, capitalism integrates private ownership of property, bans the use of force in relationships, and focuses on protecting individual rights and freedoms. In capitalism, labor division leads to the multiplication of knowledge (Simpson, 2005, p. 10; Reisman, 1998, pp. 15-16). However, players in the capitalist market must uphold morality (p. 13). People in such a market gain wealth through goods and services with freedom of economic competition, and people acquire wealth through legitimate ways. It uses an egoistic moral code that focuses on self-interest (pp. 16-17).

Socialism is an economic system informed by government ownership in the production process, and physical force is the primary initiation method. In socialism, individual rights are violated to retain the socialist element in society. Wealth is confiscated, and the government instructs people by dictating where they should work, live, types of professions, and even schools to attend.

This structure ensures that the government gets the right production tools that resonate with its objectives. As a result, socialism uses violent political instruments and advocates for communism where a single partly coordinates the government's activities. Socialism is associated with the spilling of blood to achieve objectives. People are not willing to give up their freedom, which necessitates force.

The effects in poverty and misery because there are no profit motives. A selected group makes the ruling of elites who decide how to design the formula for producing goods, leading to chaos. Bureaucrats can't possess all the knowledge essential to the production process. It applies the altruist moral codes, unlike capitalism which focuses on egoism. Altruism is about sacrificing for others where people are expected to sacrifice for the state, future generations, race, or another aspect (pp. 21-22).

A mixed economy system, also referred to as a hampered market economy or welfare state, integrates socialism and capitalism characteristics. It has some degree of freedom and government control. It is associated with low living standards and economic inefficiency. The controls in this system inhibit or substitute the gains of voluntary trade, profits, and price systems using force. As a result, it undermines wealth production.

The destruction level is dependent on the intensity of government control, and the desirable attributes in a mixed economy will depend on the influence of capitalism (p. 23). There is a constant violation of individuals' rights and an imbalance in the distribution of benefits. It does not contribute to a good society formation. The existence of the two economic systems makes it a transition economy. It can take either direction because the two are incompatible, and one has to gain control over the other (p. 24). Thus, capitalism is the superior of the three and also has the best moral aspects (p. 26)