The differences between capitalism and socialism can be summed up by their definition. Socialism is the general term for the political and economic theory that advocates a system of collective or government ownership and management of the means of production and distribution of the goods. Because of the collective nature of socialism is to be contrasted to the doctrine of the sanctity of the private property that characterizes capitalism. While capitalism stress

In capitalism, the free-market economy deals with economic needs of the people better than socialist government planners. The complexity of human behavior and the vastness of society are too great for human planners to address. A typical example of this is can be found in the former Soviet Union. The planners of this socialist nation issued a plan that factories with the greatest production of cloth textiles in feet would receive monetary bonuses. In response, the factories narrowed the size of cloth, producing more feet of unusable textile. This irrational outcome would not have occurred in a capitalist government where the usefulness of the product would be a primordial concern. Rather than emphasizing job security of citizens, capitalism prefers harder and more efficient workers over less efficient workers. This code of work ethics forms higher levels of competition boosting work quality and production as well as social inequality.

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Some common words found in the essay are:
, Soviet Union, Historically Socialist, social inequality, economic systems, social economic, social economic systems, efficient workers, capitalism stresses, living standard, private property, socialist societies, free-market economy, capitalist societies,
Approximate Word count = 642
Approximate Pages = 3 (250 words per page double spaced)