Difference between capitalism and socialism

Difference between capitalism (free enterprise) and socialism(planned economy)

General principles of economics

1. DIFFERENCE BETWEEN
CAPITALISM (FREE-ENTERPRISE) AND
SOCIALISM (PLANNED ECONOMY)

S.NO CAPITALISM SOCIALISM
1 Right to acquire
private property
State ownership of all
factors of production.
No right to acquire
private property.
2 Individual freedom No individual freedom
3 Freedom of enterprise No Freedom of
enterprise
4 Consumer is sovereign Loss of Consumer’s
sovereign
5 Unearned incomes in
the form of profits
No unearned incomes
6 Existence of
competition
Absence of
competition

2. 7 Class conflict Class less society
8 Prices are fixed by
demand and supply
No rationale
In the price system .
state fixes price.
9 Concentration of
wealth and income
and economic
inequalities.
Equal distribution of
national income. No
concentration of
powers in the hands
of individuals. State
has all the powers.
10 No equal
opportunities. Wealthy
people get all the
opportunities.
Equal opportunities to
all.
11 Key role of
entrepreneur.
Key role by the state
or central planning
authority.
12 Rewards for risks No risks, no rewards.
13 Incentive for hard
work
Lack of incentives.
14 No interference of
government.
Interference of
government in all the
fields.

3. 15 Production for the
sake of profits.
Production according
to social priorities.
16 Quick decision making Red tapism
17 Some unemployment Full employment
18 Exploitation of labour No Exploitation of
labour. No classes in
society. all are
workers
19 Economic crises due to
trade cycles
Economic stability.
Non existence of trade
cycles.
20 No central planning Existence of central
planning
2`1 Social security
schemes
Social welfare
programmes
22 Wastage of resources
(advertisements)
No wastage of
resources