SCHOOL OF HUMANITIES AND SOCIAL SCIENCES
DEPARTMENT OF DEVELOPMENT STUDIES
COURSE CODE:DS 5
COURSE TITLE:POLITICAL ECONOMY OF DEVELOPMENT
PROGRAMME:B.A. DEVELOPMENT STUDIES
LECTURER:T. M. C. MAMBWE
ASSIGNMENT QUESTION:IDENTIFY AND CRITICALLY ANALYZE THE MAJOR DISTINGUISHING FEATURES OF THESE SYSTEMS.
P.O. BOX 260024,
This essay to discuss the main distinguishing features between capitalism and socialism as social and economic systems. It will start by defining both the concept of capitalism and socialism. Thereafter, it will move to differentiate the two social and economic systems. The last part of this essay will indicate which of the two economic and social systems is more appropriate for sustainable growth and development. Capitalism is an economic system where resources be it monetary or non monetary are privately owned, whereas socialism is a system where goods are owned by the state or the public. Capitalism is founded on the belief that competition brings out the best in people. Socialism, on the other hand, believes that cooperation is the best way for people to coexist. The main difference between these two economic systems is the distribution and earning of wealth. In capitalism, everyone works for his own wealth, while in socialism everyone works for wealth which is distributed equally to everyone. The main thrust of capitalism is that resources are owned by an individual or a group of individuals. For instance, a company can be run by one person or a group of people. The resources of the individual is used and traded solely by his decision. It is the government’s job to ensure that each individual has a level playing field by introducing laws. The government is not allowed to interfere with the individual’s dealings, except to ensure that laws are being followed (Lenin, 2009). In a capitalist society, each person owns their own labor. This labor can be sold to employers for a fee. In other words, everyone can get a job and can decide how much their labor is worth in wages. If the employer feels that the worker’s wage is too high for the amount of qualifications the worker has, the employer will not hire them and move on to someone else. Therefore, in a capitalistic society even work is a form of supply and demand (Bellamy, 2003). Socialism means the ownership and control of the means of production by the people as a whole, generally by means of the state, or simply the ownership and control of the means of production by the state, or more broadly any form of central planning by the state. Under socialism, all resources are owned by all the people. This means that everyone has a say in how the resources are used. In socialism, everyone works for the good of everyone else, and there is no market. That is to say that everyone can get what they need when they need it, and there is no reason for them to pay for it. The government, in the form of a few elected officials, decides how the wealth is to be distributed to everyone ( Andrzej, 1995). The concept of socialism properly refers to any economic system, whether capitalistic or "laboristic", that adopts as its objective the greatest economic good of the greatest number. Experience makes it clear that this requires dispersing the ownership and control of the means of production as widely as possible (Stuart, 2003). Scholars have argued that those who believe in socialism believe that capitalism unfairly favors the rich. They believe that in capitalism, the power and riches are concentrated to a few who lord it over the rest of society. Socialism was born out of the desire to make things more equal. During the industrial revolution, the working class wanted to share the wealth factory owners were...