Differences between Capitalism, Communism and Socialism

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What are the major differences between capitalism, communism and socialism? Capitalism is an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. Countries with a free market system have four basic rights, unlike socialism and communism where rules and regulations for a person’s business are strictly dictated to them. The right to private property, the right to own a business and keep all of the profits, the right to freedom of competition and the right to freedom of choice encompass capitalism and allows people to take all the risk and benefits of starting and running a business. The concept of supply and demand originated in a free market system and is not a functioning tool in socialist and communist economies. There is also heavy competition in a capitalist society because there is no dictation on the functioning of a person’s business; in this market a monopoly could exist however there are laws that prohibit one seller controlling all of the supply of a product. Unlike other types of markets capitalism has the greatest chance for the poor to work their way out of poverty. Socialism is an economic system based on the premise that some if not most basic businesses should be owned by the government so that profits can be more evenly distributed among the people. Socialism’s major goal is the social responsibility to individuals; however private businesses and individuals are taxed at high rates to pay for social programs and the well-being of the society as a whole. In a capitalist economy tax rates depend on profits earned by businesses and individuals; formulas and calculations are determined in order to “fairly” tax companies and people. In socialist economies the individuals that could earn top dollar would be taxed at astronomically high rates, therefore many of them choose to leave to a capitalist economy where they work hard and see the complete profits. The premise...
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