We explain what capitalism and socialism are, the most important economic systems, and what their differences are.
Capitalism and socialism
There are many ways to explain the differences between capitalism and socialism two opposing economic and philosophical systems. Let's start by defining them both.
CAPITALISM: Capitalism is a system that is based on private ownership of the means of production and Capital accumulation as a path to the wealth of nations. In this system, supply and demand, elements that make up the logic of the market, are those that regulate the distribution of capital and, therefore, the allocation of resources.
It emerged as a consequence of the rise of the bourgeoisie as the dominant class in the Modern Age and especially after the Industrial Revolution, which allowed the emergence of the industrial consumer society.
SOCIALISM: For its part, socialism is a political and economic doctrine that promotes social and community ownership of the means of production as well as its administration by the working class, the proletariat, in order to build a society devoid of social classes, in which equality prevails in the distribution of resources and opportunities.
Socialism also comes from the Bourgeois Revolutions and Liberalism born of the French Enlightenment, but it would not be until the 20th century, with the contributions of Karl Marx and Frederick Engels, that socialism would embrace a “scientific” logic, that is, a model and a procedure, and it would cease to be simply a way of criticizing the prevailing system.
Socialism is also known as communismalthough both terms are not exactly the same.
See also: Class struggle
How are they different?
The great distinction between these two systems points, first of all, to the economic functioning model and the role of the State in it. While capitalists defend full economic freedom, letting the market determine the needs of production and consumption, and therefore where wealth flows, socialists prefer an economy intervened and controlled by the State, which would act as an entity guardian to avoid social inequality.
Capitalists see this protectionist role of the State as an artificial intervention that does not really allow a productive balance of the productive and consuming forces, but rather benefits some artificially through the imposition of taxes or trade restrictions.
Furthermore, they allege that the State never manages resources as efficiently as the business community and that the distribution of economic aid to the less fortunate, of social plans and other forms of social investment, only makes the disadvantaged more dependent on the support of the State.
For its part, Socialists accuse the market of not building stable societies at all but to favor only the powerful, those who control the means of production and large national and international capital. Capitalist society is, in their view, a great factory of poverty, since the privileged life model of the upper classes can only be sustained through the exploitation of the labor of the lower classes.
One could say that socialists advocate communal property and the principle of solidarity above all else, while capitalists defend freedom and individualism at all costs, even despite the injustices it may entail.
