Question
Differentiate between the capitalist and the socialist models of development.
✓
Answer
Capitalism Socialism Philosophy: Capital (or the “means of production”) is owned, operated, and traded for the purpose of generating profits for private owners or shareholders. Emphases on individual profit rather than of workers or society as a whole. From each according to his ability, to each according to his contribution. Emphasis on profit being distributed among the society or workforce to complement individual wages/salaries.
Economic System: Market-based economy combined with private or corporate ownership of the means of production. Goods and services are produced to make a profit, and this profit is reinvested into the economy to fuel economic growth. The means of production are owned by public enterprises or cooperatives, and Individuals are compensated based on the principle of individual contribution. Production may variously be coordinated through either economic planning or markets.
Economic System: Market-based economy combined with private or corporate ownership of the means of production. Goods and services are produced to make a profit, and this profit is reinvested into the economy to fuel economic growth. The means of production are owned by public enterprises or cooperatives, and Individuals are compensated based on the principle of individual contribution. Production may variously be coordinated through either economic planning or markets.
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