Capitalism vs Socialism and Effect on Economy

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Frank Liberti
Issue Essay 1
Capitalism compared to Socialism is the best format for the economy. When the two are looked at side by side they both have strong pros and cons. When looked at in a functional format to the economy and the real way that they would work, I believe, that capitalism would provide the best options. The concept of capitalism is a good way to help develop the economy, especially in a large economy such as the United States. The competition that is created by the capitalism boosts the economy and stimulates growth. Capitalism is the best way to go about the economy. Capitalism is loosely defined as an economy where markets are left alone and not regulated. The government is not in power over the markets. The only time that the markets would be regulated would be when there is distress in the markets. With the distress, the regulations are as little as possible. There is a patience that is used with capitalism. In it there will be no moves made in a down turning economy until the trends are strong enough to legitimize the regulations that would need to be set. Capitalism was a system developed in Europe. This system became popular once feudalism became obsolete and unpopular. It was very popular in the western part of the world and then began to spread and become popular in Europe. This economic system was made to promote economic growth through competition. The main focus of capitalism is to have competition to promote the best and cheapest goods and services. The term that is constantly related to capitalism is the French saying “Laissez Faire.” This is translated into “Let do,” and is roughly translated as “Let it be.” Socialism, on the other hand, is a strictly planned economy. The government will regulate the markets and plan the markets in a way that is believed to put the economy in its best form. This requires a lot of planning. It is meant to be able to handle large and small economies. Socialism frowns on the competition that capitalism promotes and looks to strive for an even playing field for all competitors. Capitalisms competition is the best way to promote spending and boost the economy. Under a socialist economy companies and service provides have an even competition. This allows for companies to charge high prices because no one is battling to have the lowest prices to attract more consumers or customers. Capitalism promotes the competition and makes companies fight for the customer. This allows for a drop in prices and/or a rise in quality. Because of this companies must be willing to compete in order to stay in the market. This provides the best situation for consumer, thus promoting the spending of income and allowing for economic growth. If competitors in a certain market don’t feel the need for competition they can charge high prices with no fear of another coming in with a better product or a cheaper one to take the customers. With socialism the customers are robbed of the opportunity to have a better product. Socialism promotes the relaxation of the research and development of new and better products and services. The people in the system will be dulled by the monotonous of the same things. Competition allows for the consumer to get the best because it makes companies press on the research and development. It not only boosts the economy by enhancing products, but fuels new innovation. Because of the capitalist economy industries have prospered and helped raise the standard of living for people. Socialism does not take into the account of a large scale economy as well. The thought is that everything can be planned to have put the economy in the best situation it can be in. This is helpful in a small economy where everything is capable of being controlled. Capitalism works easily with a large or small economy, because it allows for specific concentration on the issues that come up. It does not need to be constantly planning for every situation, but when an issue is brought up...
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