What is the Difference Between Capitalism and Socialism?

This article needs some vast improvements, such as the inclusion of anarchism (i.e. libertarian socialism) and a revision to the then-inaccurate definition of socialism as reliant upon "governmental planning."

In my experience, there are generally two definitions for each of these terms. In the most basic sense, capitalism is the private ownership of the means of production, whereas socialism is the common ownership thereof. The more robust definition of capitalism includes not only the monopolistic control of land, but money and ideas (e.g. Intellectual Property), in addition to the hierarchical organization most employers impose upon their laborers.

Socialism opposes these capitalist relations and seeks to prioritize those industries that provide the means of subsistence ("From each according to ability, to each according to need."), thereby allowing individuals the choice of whether or not they wish to labor beyond this. Libertarian socialism aims to usher in socialism without a state or vanguard party (hence, anarchism), which Marxists and other authoritarian socialists believe necessary.

Of course, there are also the ignorant (and mostly American) meanings of these terms, which revolve around whether or not individuals can exchange goods without outside intervention; capitalism is equated with free exchange, socialism with economic control by an elite.

I find it funny that this article is titled "What is the Difference Between Capitalism and Socialism?", and yet most of the commenters here seem to be experts in the theories and their differences.

I admit, I don't know much about capitalist vs. socialist societies, and that's why I clicked on this article, which happened to be the third hit on a google search "capitalist vs. socialist."

You're concocting these elaborate arguments and venturing deep into American history, why are you here?

In Heaven, everyone is equal and everything is shared. Greed is the fuel of Capitalism. Plan to live now as you would after your death. God is the Judge.

I just have a question for all the people who shun socialism in favor of capitalism: what are you going to do, when confronted by a fellow countryman, who for some reason is ill but he cannot afford to see a doctor? Are you going to watch him languish away before your eyes? This isn't meant to sound adversarial, nor is it a rhetorical question. I really want to know.

I know that a lot of American posters feel very strongly about capitalism. They think that it is what makes their country great. Well, I am too ignorant to know whether capitalism truly is superior to socialism, however I will share my own experience with you.

I am from Canada, and I think we are a socialist country, although I believe we are also capitalist to some extent, because people here can own their own businesses.

Anyway, I belong to the "underclass", in that I am dependent on government welfare to survive. However, I don't have to worry about a thing, because I can access medical care whenever I have the need and I don't have to pay for it whatsoever. I also don't have to worry about starving or putting a roof over my head because I have my welfare money to live on. I am happy (or as happy as I am capable of being) here, and I know for a fact that if I were an American, things would be much, much more difficult for me and I would be downright wretched.

So, my point is, if socialism is truly as bad as some of you think, why then does it work so well in Canada?

@anon344910: Leaving aside the non-responsive nature of your rather silly comment, you can now take this opportunity to advise us of some "alternate" system of economic development that does not begin with an act of theft.

I love how whiny the capitalists get when anybody mentions any alternative. Must be nice being so completely easily manipulated and brain washed.

RE: "Pure Capitalism is dictatorship." You have deftly captured the essence of Orwellian "Newspeak."

Other Orwellian corollaries to your statement: "Freedom is Slavery"; "War is Peace"; "Ignorance is Strength."

These slogans, along with your own, and new ones coined daily by the statists ("Change you can believe in", etc.) speak to the value of slogans in training responses from the "useful idiots."

"Useful Idiots" was a remarkably candid and honest appraisal of the hoi polloi who picked up and repeated the communist/socialist mantra or jargon, and has been attributed to Vladimir Lenin.

Capitalism is not fair? Pure capitalism is a dictatorship? Clearly, you have no understanding of capitalism. Capitalism is based upon the free market. The free market in America is 300 million consumers deciding for themselves how to spend what they have earned; it is 300 million students deciding in their lifetimes how much education and/or job training is right for themselves; it is 300 million workers deciding for themselves what jobs they are willing to take; it is 300 million free people deciding how to live their lives.

With communism and socialism, bureaucrats make those decisions for you. How is that fair? How is that not dictatorship? For those of you who think capitalism is bad and communism wonderful, ask yourselves why it is that every communist country has to shoot people for trying to get out of those countries, while people risk their lives to come to America? (Even though we are far from being a true capitalist country.)

To clarify something that most people get wrong: in socialism you do not get equal share of profit; you get a share based on your merit.

Determining merit share in profit is another issue where socialism falls short in practice but in theory it is not that we are all equal (that is communism); it is that we work as a group and award hard, innovative work. People fool themselves who think that capitalism is fair. It is not.

Capitalism is an economic system. Socialism is a political system. Without the use of capitalism, socialism always fails. Capitalism produces what is measurable in all goods and services. Socialism produces nothing but misery.

Pure capitalism is dictatorship.

Pure Capitalism is dictatorship

RE: "We live in a radical age." The first Europeans to navigate the narrow break in the Rocky Mountain front that I-90 currently occupies at the location of Missoula MT was referred to as "hells gate." Why?

It turns out this narrow pass marked the boundary between the Flathead and Crow territory and was completely littered with the crushed skulls of each tribe as they relentlessly ambushed each other long before Columbus sought better trade routes with India.

The author's fanciful imagination of stone age tribes living peacefully among each other on the North American continent is pure sophomoric nonsense fit only for wide eyed children who are gullible enough to believe in peter pan as history.

@Post 66: Thomas Jefferson believed in a natural aristocracy as opposed to an aristocracy based on nepotism (the Roosevelt, Kennedy, Clinton, Bush model) He wanted a very basic education system that imbued the meanest of citizens to both recognize and oppose the instruments of government tyranny -- an education completely controlled at the very lowest level of political organization. He would be spinning in his grave over the entire concept of a federal "Department of Education." What complete balderdash to suggest he would desire a federal or even a state educational bureaucracy.

Next, the author of this ridiculous comment moves on to talk about the concept of "greed" as manifest in individual achievement and success. To you "A" students, he would suggest that you share the work that you put in to earn your well deserved "A" with the "F" students who didn't even bother to show up. So everyone gets a "C." It's more "fair." The entire concept is repulsive to the idea of a Jeffersonian meritocracy.

Next, the author discusses his/her perspective regarding John Locke, who certainly never believed that powerful people (government) should redistribute the product of individual labor and initiative to others whose political favor was being sought.

Charity is very important to society, but nothing in government is remotely related to charity. Government's only authority is underwritten by the force of their gunpowder; the antithesis of charity.

Next, we read the concept of Joe Six Pack or alternatively, an equally useless government union employee as representative of the archetypical "working man".

How about an orthopedic back surgeon who works 60 hour work weeks under the most stressful of any work conditions present in the USA as representative of the "working man?"

Sure, they make one one hundredth of what the Hollywood-Washington DC class makes, but when you can't walk, they are damn well worth the half million bucks a year they collect for sacrificing everything for their profession.

I fully agree that we all have a duty to help each other out and I know of few human beings who are not up to the task. Sadly, the ones who aren't are universally employed as our political "leaders." Government and its bureaucrats have no relation to human kindness and compassion; they universally act in their own self-interest but differ from the rest of us only in that they solely own the legal use of violence to secure their own interests.

Nihilism and apathy are the stepchildren of government run amok. They did not exist until we allowed several dozen armed federal agencies ensuring that "their" will be done, and not ours.

I will happily engage the individual who authored this simplistic view of the human condition on any points he wishes to belabor.

We have to realize how radical our current model of capitalism is. All capitalists used to have socialism in the hearts. Adam Smith, Abraham Lincoln, and Thomas Jefferson were for progressive taxation (and Lincoln was for a progressive income tax).

Thomas Jefferson was for the socialist measure of publicly funded schools. Jefferson was anti-corporate power gone greedy. He also wanted everyone to have a government-allocated equal amount of property to start out with (though from there they could go anywhere with it- except he was for estate taxes and environmental protections as well).

John Locke believed that anyone who had a surplus in basic needs should give it up to someone lacking those basic needs.

Teddy Roosevelt believed the cries of the working man should have as much weight in the marketplace of ideas as the voices of the captains of industry, who had the unfair advantage. Roosevelt had an independent panel broker a compromise between unions and managers. He also created consumer and environmental protections, and knew exploitation of the poor occurred when he toured the streets of N.Y.C. to see "how the other half lives." After that, he came away with the conviction that some people are poor because of the greed of others, and these poor people need our help.

Why? Because all of them believed mankind had a duty to help each other out. In this day and age of nihilism and apathy, those in lower-income brackets actually donate more to charity than the rich. (Also, they may not pay income taxes, but they pay all other taxes.) Do you all seriously think that, given this fact, rich people and religious charity could do what a centralized power can do to help ensure at least the opportunity for basic needs are met? Is that an experiment we are willing to try, and make lab rats out of the disenfranchised poor, elderly, disabled, and children?

We live in a radical age. Prior to Europeans coming to America, American history was full of acts of creativity, quality goods, and societies run by the motivating forces of imagination, honor, and goodwill.

Look at the Native Americans for example. Were they lazy? No. The fact we need money to motivate us now means we've been emasculated from a system that valued pride and skill, but also valued community and social responsibility over profits. They saw everything as sacred and, something now scientifically very plausible, interconnected. They valued rewards earned through hard work and being tough, going through trials.

This article did not hit the target. At the end the author gets a different result. They just try to spread their dualistic black and white vision, while we upgrade hardware to full color wide 3D screen. Thanks, 34392, 31203 and so on. Do not let them push yourself into theirs B&W dualistic vision.

The difference between Capitalism and Socialism is that the first one doesn't know how to sell, while the second doesn't know how to buy.

I hope it's both brief and correct.

The difference is that a capitalist leader will help others, maximize their potential and provide opportunity. This is a true socialist. T

I believe human nature is the best indicator of which to follow: capitalism or socialism, based on the following true account.

An economics professor at a local college made a statement that he never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and no one would be poor and no one would be rich -- a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A(substituting grades for dollars- something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little. The second test average was a D! No one was happy.

When the third test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, all failed, and the professor told them that socialism would ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Remember this in the 2012 election.

The five best sentences to apply to this are:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it.

5. When half the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of a nation.

Some of the anon posts sound like feral dogs trying to protect their bones and in the end, actually helps to highlight how fearful they are of an honest discussion of our current economic system.

Greed is an excellent motivator, but towards what end? I have also heard that heroin is a great motivator.

We shouldn't be surprised at how ingenious we have become at making money, or how in the process we devalue everything (people included) in pursuit of the almighty dollar. We currently build cars, drill for oil, grow food, educate our kids, build houses, and heal the sick as secondary byproducts of making money and in the process, we inefficiently utilize our natural resources.

All legal loopholes, (and all unenforceable illegal ones) are now being exploited in the acquisition of wealth and the related costs are being allocated to the many.

All of our natural resources (air, water, oil, arable land) are in drastic decline and this is the legacy we leave to the next generation. The current situation is arrogant and we should be ashamed of the inheritance we are leaving the future.

We can start by throwing out generalizations like capitalism and socialism and begin to refine and evaluate the qualities and characteristics that we want to foster in our economy and our society.

Equal value of all human life, pursuit of happiness, equal right to health care and legal system, access to education based on ability, competition to foster improvement and the acquisition of reasonable rewards, efficient and effective use of resources.

These aforementioned items need to be determined as a group. We can then create competitive structures, similar to sports leagues, as experiments, to implement and evaluate our ideas, learn from our successes and mistakes and boldly venture into the future.

Communism is the way!

@anon31203: Real, actual communism is a stateless society in "utopia," according to its followers and should not be confused with socialism. For example, the Soviet Union was a socialist state (so far) and was "working towards" "world Communism," but never, ever did a communist place exist on this planet.

In theory, looking at those facts (the original post) there has never been a pure capitalist or socialist state, which is better since they both have "great ideals" that look great on paper, but in reality, the Soviets fell in 1991, and capitalist private companies historically always needed bailouts from their respective governments, during great crisis.

Excuse my bad English. I'm Vietnamese from Vietnam.

"Under socialism, all resources are owned by all the people..."

What a crock! The person who wrote this article, clearly is a socialist. Please show me a single socialist state where the people shared equally in the resources! In both systems, the resources are controlled by a select few.

The difference between Capitalism and Socialism is that in Capitalism, resources are owned by the highest bidder: the person or company willing to pay the most for them. How those resources are used is then determined by the market.

In Socialism, resources are owned by the people, but controlled by politicians. How resources are used is determined by committee.

In neither system to all of the people enjoy equal access to wealth. That does not exist, nor has it ever existed anywhere or at any time in the world. However, economic history has shown that resources are more efficiently used in a Free Market Capitalistic society, which has consistently proven to generate more wealth and raise the standard of living of all, rich and poor -as President John F. Kennedy stated, "A rising tide lifts all boats." That is the reason that even though in the middle of the 20th century half the world was Socialist, at the end of the century, only a few small countries remained so.

Even China, the world’s most populous Socialist country has embraced Capitalism, although tepidly.

RE: "If capitalism is the opposite of Socialism, then why is it that Capitalism seems to get so many handouts from the government...”

Handouts by government planners for either individuals or groups of individuals (corporations) are not a feature of capitalism. Capitalism relies instead upon free choice -- the opposite of imposing taxes on some in order to gift others by using force. Capitalism is another name for economic freedom -- the most important freedom.

RE: "If true Capitalism is free market, then we don't have capitalism."

You are correct. Capitalism is a virtue that government subverts for the purpose of doing evil, just as it does with all the other virtues: honesty, self-reliance, generosity, etc.

RE: "We also don't have socialism. And we have always had a morphing of the two."

Yes, crime often masquerades as justice. Crime and socialism will always be with us. We need to keep ever vigilant to suppress and correct both forms of sociopathic behavior.

RE: "It does work, and can work [socialism], if done in a way that the masses see as more fair.

This is like saying theft can work if the thieves were just more caring, but this is nonsensical; antipathy is required of both thieves and socialists, and you expect the worst to do the best?

RE: "You can't hand out billions to a few, while millions of others need help, too."

You can only hand out what is yours. Handing out the property of others is a sin, even when the government does it with armed tax collectors.

RE: "To sustain a balanced society, it can't be so lopsided when it comes to socialism. It's either balanced for all, or none at all."

Truly free markets are the only real balance any society should rightfully desire, where virtue is traded for virtue among willing traders. No one brings a gun to the market to demand his cut, i.e., government. We must always view government as a last resort in order to deal with the worst in us as a people.

RE: "welfare, including tax breaks and other types"

Real welfare is taking care of yourself and helping your neighbor if he tries to do this and fails. It has nothing to to government force. Tax breaks are what we all need. Look at them as rain from heaven and let's all look for our own tax breaks and be joyful when not only we, but our also neighbors receive them.

RE: " does not create jobs like the capitalists claim."

The purpose of any free economy is not to created "jobs," but to create "wealth." Wealth creation adds water to the well that we all seek to draw from. It would be wonderful if that well replenished itself so no "jobs" were necessary. That will never be so in this life so we must work to fill the well. Only "jobs" that produce wealth are meaningful and give pride to those who perform them.

Government can create jobs but it can never create wealth. This is why societies in which the government creates all of the jobs have no wealth and why all who live in them must suffer poverty, both materially and spiritually.

RE: "Anyone can see that just does not happen anymore. If it did, we should see a huge increase in jobs, but we don't.”

Capitalism demands that it is your responsibility to find a way to make yourself useful to others -- to add water the well as it were. It promises nothing but the opportunity to search for this universal meaning in life.

Two young men with college degrees have found a way to make wealth by doing my heavy yard work, I am too old and cannot do it so I must pay them with money I earned and saved. If they find they are good at this work, they will grow and may one day one own a large wealth creating business.

To believe that someone owes you something you have not found a way to earn for yourselves is the seed of crime; don't plant it or nourish it. It will only make you unhappy in the end.

RE: We see companies hoarding billions, and making billions, while not hiring people here in the USA.

Companies spend money only in order to make more money for those who trusted their savings with them by investing in them. They are not really here to give things to people who do not add water to their wells. They are not charged with doing charity, just as your bank is not charged with giving your deposits to others it may have thought were more needy of it than you.

RE: "So for the security and sanity of the country, it must be fair, or it must not be fair at all."

What do you mean by "fair"? Does a fair race result only when all who run the race win it? Would it be more fair to make the fast run a longer distance so that the slow could win too?

Fair is an elusive concept and much evil has been done in its name. I used to tell my children that I would only listen to their complaints about the lack of fairness if their arguments were only on behalf of others they felt were being being denied it. Fairness is most often used as a synonym for selfishness.

If capitalism is the opposite of Socialism, then why is it that Capitalism seems to get so many handouts from the government, but fight with vengeance against the people getting handouts?

If true Capitalism is free market, then we don't have capitalism. We also don't have socialism. And we have always had a morphing of the two. It does work, and can work, if done in a way that the masses see as more fair. You can't hand out billions to a few, while millions of others need help, too.

So sustain a balanced society, it can't be so lopsided when it comes to socialism. Its either balanced for all, or none at all. Corporate welfare, including tax breaks and other types, does not create jobs like the capitalists claim. Anyone can see that just does not happen anymore. If it did, we should see a huge increase in jobs, but we don't.

We see companies hoarding billions, and making billions, while not hiring people here in the USA. So for the security and sanity of the country, it must be fair, or it must not be at all.

@Anon149920: You have me dead to rights. I did drop out of college, joined the military to defend capitalism and freedom, then went forth in the world to see how it really works (been there done that).

After finding out what just makes the real world tick, I made a business and made my millions.

I share my loot with relatives who wasted their time and money on a useless "education" at the hands of "perfessers" who could never make it in the real world; that is, the one not tightly fastened to the taxpayer teat.

I take it my posts hit close to home, and I'm not really sorry if it puts your knickers in a twist. You must be an academician since you cannot refute any of my attacks on socialism.

Oh, and I did live in my parents basement too, but that was 50 years ago when I was wasting my time and money with useless Marxist "perfessers."

maybe time for Sir Gareth to put away his gazing mirror, and a few of the anons as well:

Manual labor has never been the basis of capitalism; this is simply Marxist rhetoric often heard in college classrooms as put forth by tenured professors and their highly impressionable, yet equally inexperienced, charges.

All that is necessary for capitalism to morph into socialism is an elixir formed of political tyranny combined with a naive public. The conditions are indeed ripe for such a morphology to occur in the USA today.

Your prose is rather well developed for a twelve year old. My congratulations to your sixth grade teacher.

In a world where the young that have not been propagandized by government education unions this would be called theft.

The nonsense is so overwhelming I have an overwhelming need to puke when I hear these sub-par human beings put forth on "social injustice."

When I hear pompous trolls issuing statements such as "sub-par human beings" and "elixir formed of political tyranny combined with a naive public", I imagine a college dropout, alone in his parents' basement, sitting in his underwear, smoking camels and drinking red bull. Since he has no life, his worldview is vastly superior to anyone in the world. Albeit the virtual world where he bestows complimentary titles of importance upon himself. I just happened to click on the link to this site. Wow, what an eye opener. My sadness isn't for the scores of "young charges" being indoctrinated by "Marxist professors". It is the overwhelming need for medical research and more mental help facilities for the deeply disturbed.

My advice: don't enlist in the Marine Corps if you fear losing your identity, sharing resources, indoctrination and working together as "one."

RE: "Socialism implies redistribution of wealth

So does thievery. When the thieves are in charge they like to call themselves "socialists." It somehow sounds less criminal, at least to them.

RE: "(which doesn't mean everyone earns the same amount of money - I hope you understand this on your own)"

Presumably the chief thief sorts out just what percentage of the loot the rest of the gang gets.

It's really an old story, you know, all that bickering about which degree of theft each has attained and therefore what share of the take they are supposedly entitled to pocket.

RE: ".... and state involvement in some key services, such as sanity, energy and the like."

Most of us don't look to the state when issues of sanity are being discussed,

As for "energy", go to any state department of motor vehicles for a driver's license renewal at 3:45 p.m., and behold just what "energy" and government have in common.

RE: "Regardless of whether you are in favor or against it, know the difference. I suggest you to read something from Bertrand Russel, vehement socialist and anti communist."

I would need to know just what Bertrand Russel found so appealing about socialism that was absent in communism.

To this end, I'm not much impressed by what people are against as by what they are for.

The Nazis were said to be virulently anti-socialist as well. Odd that they called themselves socialists isn't it?

Also odd is that the USSR called themselves a socialist republic, not a communist republic or we would know them by USCR.

The row that developed between Hitler and Stalin was never over ideology. Their ideologies were identical: statist tyranny over individual liberty - the unpleasantness that developed was more like Hatfield vs McCoy and really nothing more.

RE: "...is like saying every capitalist is a libertarian."

But I would hold that the correlation is 100 percent true.

By this I do not mean to say that people who claim to subscribe to the tenants of capitalism are necessarily capitalists.

The essential component of libertarianism is, of course, individual liberty, as opposed to collective economic security; free, private markets as opposed to collectively-controlled markets dominated by coercion and force.

Under this understanding, the true capitalist desires free capital markets -- that is, free of collective (government) influence or force.

No capitalist can be anything other than a libertarian, although libertarianism encompasses far more than simply free capital markets.

The author seems not to understand the differences between socialism and communism.

"Under socialism, all resources are owned by all the people" seriously, what?

Socialism implies redistribution of wealth (which doesn't mean everyone earns the same amount of money - I hope you understand this on your own) and state involvement in some key services, such as sanity, energy and the like.

Seriously,saying every socialist is a communist is like saying every capitalist is a libertarian.

And no, socialism is not a stepping stone to communism. Sure, it's a step in the same general direction, but saying that one automatically leads to the other is an absurd slippery slope.

Lenin said socialism is instrumental to communism you say? Well, who cares? Lenin was a communist. It's not like if his opinion is unbiased.

Regardless of whether you are in favor or against it, know the difference. I suggest you to read something from Bertrand Russel, vehement socialist and anti communist.

RE: "It's wrong to try and be better than your fellow man, motivating or not. It's not the way to be motivated. Having a heart and caring is a much better motivator for all. It could be a much better society. Has to be better than how it is now. Why should the rich be the only ones who can enjoy life? Everyone should be able to. It's not fair."

Your prose is rather well developed for a twelve year old. My congratulations to your sixth grade teacher.

RE: "All people should have the right to basic living needs..."

OK, let's assume what you say should be the law of the land.

Under your law, I should have "rights" to the the things I actually need and I have really no obligation to provide them for myself or for anyone else - its my "right" right?

O.K., so under your plan just who has the responsibility of providing me with this abundance. Who must be made to baked my bread?

Whatever the 'label' may be, I think sharing everything and it being 'by the people' is the way to go. It could be a combo of things. Basically, that basic needs to live (exist) are there for all, yet you have options where you can gain more beyond that if desired on your own.

All people should have the right to basic living needs and if they 'choose' go beyond, if that matters to them, then at least all would be starting from the same playing field. I also think that humans need to make a change. They need to do things out of 'caring' and for the good of all and not just for themselves or for stupid reasons like pride, vanity, being better than the next guy, which is what competition does. I never liked or felt comfortable with competition.

It's wrong to try and be better than your fellow man, motivating or not. It's not the way to be motivated. Having a heart and caring is a much better motivator for all. It could be a much better society. Has to be better than how it is now. Why should the rich be the only ones who can enjoy life? Everyone should be able to. It's not fair.

If it's done right using a combo of socialist ways in the right places, etc. it really could finally be more peaceful and livable for all. Life shouldn't be a 'game'.

I agree with what #20 said.

@20: What are you actually worth? In what context, is it your self worth in your eyes or that of which you are actually capable of doing? When a person states this I question who's scale of worthiness we use.

Is this comparable to the work of others in your field, education, years of experience?

With today's job market there is little chance you will be paid what you are worth (or what you think you are worth), unless you get a job with the government. Good news. I hear they are hiring.

i say that if we move from a capitalism to socialism, the next step would be communism.

I think capitalism is the better option when dealing with millions of people. However, competition can make people do some evil things. People will lie and cheat to make it to the top.

Capitalism needs people who want to be janitors, bus drivers and teachers, their jobs are just as important as any other. In such a competitive society the lowest paying jobs aren't exactly appealing. Competition is great a motivator and also, a catalyst for corruption. People still cheer for shoddy goods and poor performance sold for high prices because they support that company they receive the goods from.

Many individuals would rather avoid supporting a company that violates the individual's moral and ethical standings just because they have lower prices (hence the corruption).

RE: "The power of invention only requires "greater concentration of capitol" in a capitalist or socialist system."

In the great debate between capitalism and socialism, the latter always avoids the obvious question: just who produced this capital? It's plainly obvious that the only way for a socialist to accumulate capital is to steal it from the people who produce it.

RE: No capitol was needed to invent the wheel.

If you mean by "invent" to design, prototype, manufacture, market, distribute, and sell then you are not correct. Daydreams are only manifest in useful technology with the infusion of capital. It was as true 5000 years ago as it is today.

RE: If my memory serves, no one paid Einstein to create the theory of relativity.

You are correct. However Einstein's special theory of relativity would remain today as unknown in name as it is in understanding had not prodigious capital been expended in verifying its accuracy.

His special theory of relativity even today influences very little in our economic lives and the Atom bomb mistakenly attributed to Einstein owes more to Madam Curie for its theoretical basis and to its Hungarian inventor Mr Leo Szilard for the idea of a fission bomb -- an idea that led to its practical implementation at a heretofore unheard of cost in raw capital.

RE: The capitol was invested after the fact to "mass produce" in a capitalist or socialist and apply these ideas to meet supply and demand of a society.

Totally untrue. Today many very useful products (medicines, software, etc.) bear developmental costs that vastly exceed their "manufactured" costs (often a 10 cent CD or 1 cent pill). These are often sold at thousands of times their manufacturing and distribution costs.

RE: If we keep creating new technology then logically it will someday remove the need for manually labor at all, leaving only the "idea of work" you mentioned. Which could become a huge problem for capitalism.

Nonsense. Most professionals "work" their "manual labor" counterparts under the table. I exclude tenured academicians from this generalization, of course.

RE: How will a capitalist or socialist system place value on that "greater concentration of capitol"....?

Gee, I don't know. How much capital is required to set up production for 20 wheelbarrows per month? How would this compare with production of 20 Boeing 787s per month? Which is valued more?

RE: If technology eventually took over all manual labor (which employs the majority) then there would be less work, which would increase poverty levels. More poverty = less demand right? which = less supply which = less need for even the rare skills, right?

Wrong, because your premise is wrong. Manual labor is almost non-existent in developed countries and would be in the underdeveloped counties as well if not for political corruption. There are no labor intensive factories in China producing our TVs; the last labor intensive unionized factory building TVs was closed in Chicago decades ago. (Zenith and its "handcrafted" trademark). What a ludicrous construction: "Handcrafted" micro-circuits?

RE: The way I understand it (and I could be severely wrong as I'm not an economist just a moron with a keyboard...)

No, you are not a moron but you do overvalue titles. Most economists do not agree with their counterparts so they are a net zero. In order to develop the skills necessary for a citizen to discriminate between advantage and folly, one needs to advance opinions and then subject them to harsh scrutiny as we are doing.

RE: If you're removing a part of that equation (manual labor) what becomes of capitalism? Does it morph into Socialism?

Manual labor has never been the basis of capitalism; this is simply Marxist rhetoric often heard in college classrooms as put forth by tenured professors and their highly impressionable, yet equally inexperienced, charges.

All that is necessary for capitalism to morph into socialism is an elixir formed of political tyranny combined with a naive public. The conditions are indeed ripe for such a morphology to occur in the USA today.

RE: I say this because at this point... the majority of the people now in poverty would be screaming for a government run economy so they can survive.

Which truly produces "real" poverty. Poverty in the USA today is only an attitude, not a condition. The attitude is summed up thusly: "the government (productive taxpayers) owe me..."

I have witnessed tangible permanent poverty and it is indeed ugly and it has always been the result of political intrigue.

If you gather the idea that I detest politicians and as such, am not inclined to turn the results of my productivity over to them, you would not be far off the mark.

@anon91007: Nice response! I liked it, just one question though.

RE: The power of invention requires even greater concentration of capital. A skilled surgeon is backed by several million in capital equipment; an engineer usually less than a million. True, a government union employee only needs to siphon off capital from those who actually create the capital.

The power of invention only requires "greater concentration of capitol" in a capitalist or socialist system. No capitol was needed to invent the wheel. If my memory serves, no one paid Einstein to create the theory of relativity. The capitol was invested after the fact to "mass produce" in a capitalist or socialist and apply these ideas to meet supply and demand of a society.

As you yourself pointed out, the need for manual labor in the work force is decreasing. If we keep creating new technology then logically it will someday remove the need for manually labor at all, leaving only the "idea of work" you mentioned. Which could become a huge problem for capitalism.

How will a capitalist or socialist system place value on that "greater concentration of capitol" mention? This question is focused on the value of capitol itself under said systems.

I ask because the article states that in a capitalistic society even work is a form of supply and demand. If technology eventually took over all manual labor (which employs the majority) then there would be less work, which would increase poverty levels. More poverty = less demand right? which = less supply which = less need for even the rare skills, right?

The way I understand it (and I could be severely wrong as I'm not an economist just a moron with a keyboard) the cost of labor and the ability of a government to tax its people coupled with a country's commodities and debt ratio formulates the equation when figuring out the worth of the capitol you mentioned (in a nut shell).

If you're removing a part of that equation (manual labor) what becomes of capitalism? Does it morph into Socialism? I say this because at this point (should my scenario take place) the majority of the people now in poverty would be screaming for a government run economy so they can survive.

Who really knows what's right? again just a thought. Thanks for your great response.

RE: "Just a crazy thought here: I've noticed that both of these systems (capitalism and socialism) seem to ignore the ripple effects of technology."

Technology is not new, it's as old as the human species and it does not replace the idea of work; it changes it. Most of my fellow engineers work long hours and make good money because their skills are somewhat rare; ditto doctors surgeons and nurses. It is true that menial work has been devalued.

That's why we have government employee unions who support socialism so that they can make far more than they are worth.

RE: "...could it be possible that our "power of invention" as a species, has finally out grown a need for a financial system at all?"

The power of invention requires even greater concentration of capital. A skilled surgeon is backed by several million in capital equipment; an engineer usually less than a million. True, a government union employee only needs to siphon off capital from those who actually create the capital.

In a world where the young that have not been propagandized by government education unions this would be called theft.

RE: "Could that be what we are witnessing in the worlds' economic environment right now -- A sort of global rehaul on value."

Of course we are, and that is not new; value is established by the marketplace where millions of free decisions take place that eventually create the high and low watermarks for value.

Valued services command high wages and valued products command high prices. Value, in other words is the measurement of the esteem that free people place on such highly esteemed products and services.

Socialists detest this notion; they don't like the idea of free people establishing value on their own within freely operating markets. They rather, want people who hold power over others to establish value instead. Naturally, these people place a very high "value" their power over others. They use some of this power to pay their friends more than they are work in an effort to secure this power relentlessly.

They can do this by taxing the people who create real value and spread this stolen value by subsidizing those who don't create value; as in "minimum wage" laws etc.

Just a crazy thought here: I've noticed that both of these systems (capitalism and socialism) seem to ignore the ripple effects of technology. Let's face it: every new gizmo, machine, software or whatever we invent leads to the inevitable fact that there is now one less task or job we will have to do in order to survive or fill a demand for a product. Doesn't this mean that eventually we will invent enough new gizmos, machines, software or whatever that none of us will ever actually have to work to survive or fill a demand for a product?

Doesn't that also mean the value of everything even our labor will become, well simply put, worthless. Though both socialism and capitalism both claim to inspire the invention of new technology, could it be possible that our "power of invention" as a species, has finally out grown a need for a financial system at all?

Could that be what we are witnessing in the worlds' economic environment right now? A sort of global rehaul on value. Again just a crazy thought.

RE: "Capitalism is founded on the belief that competition brings out the best in people." The best what? Competition will make you try harder to win, and win in this case means win money. This isn't necessarily the best thing for society."

I am happy to see that some people still cheer for shoddy goods and poor performance sold for high prices.

When a good socialist goes to a performance, he

really doesn't want to listen to good music or see a fine performance. What he wants is to see that everyone who merely likes to perform will be paid the same as the ones who are actually very talented at what they do. You see competition for the right to perform before a willing audience "just brings out the worst in people."

And why is it that our socialists are always prating on about "what's good for society?" How the hell do they know? Isn't this the very seed of evil? of tyranny? of megalomania?

We should all become experts on what is good for ourselves; not on what's good for our neighbors.

Insisting that we know whats good for our neighbors is very rude; sometimes people who persist in doing it get an equally rude response - like a bullet between the eyes. It happens all the time; just watch the TV news.

"Capitalism is founded on the belief that competition brings out the best in people." The best what? Competition will make you try harder to win, and win in this case means win money. This isn't necessarily the best thing for society.

RE:"A balance needs to be struck somewhere between the two so that we all have a better chance to flourish and gain an understanding that you don't have to have your foot on your neighbor's neck to succeed and prove you're better."

Why do we need a "balance" between liberty and socialist tyranny? Perfect socialism is best described as two foxes and a chicken voting on whats for dinner.

RE: "We need to understand and be honest about the problems unchecked capitalism causes in any society and stop denying that it is the perfect system. It is in many ways far from it."

Grow up. There are no "perfect systems" simply because there are no perfect people. The Earth has been soaked in millions of gallons of human blood by the least perfect of us who dream up their own "perfect systems" of social equality, with themselves firmly entrenched at the top of these "equal" systems of social order.

The nonsense is so overwhelming I have an overwhelming need to puke when I hear these sub-par human beings put forth on "social injustice."

RE: "The greed (not competition) is the biggest problem in a capitalistic society because a lot of people will do anything to make the next dollar. This includes lying, cheating and stealing. You will find that in this kind of society, the less fortunate are often exploited in one way or another (i.e, pay higher fees, interest rates and general high rates based on where one lives) to line the pockets of those in financial power. This is capitalism run amok and no one wants to address it because a majority class of people have benefited from it enormously! This has become normal in capitalistic societies."

Stealing is a crime, lying and cheating are equally subject to either criminal or tort law, depending on the circumstances.

The less fortunate are not exploited in the USA; the lowest 54 percent of the population pay no taxes for the government that delivers them a bevy of "free" services paid for by the top 46 percent of income earners.

Wage taxes (FICA) deliver enviable retirement benefits to those who either choose to work very little or not work very hard or long. This is all paid for by FICA taxes paid for by the same people who pay most of the income taxes and whose Social Security benefits are a tiny fraction of their hefty contributions into this system.

There has been much idiot commentary on how mortgage lenders were engaging in "predatory lending" in the sub-prime lending business. How so? And just who was being preyed upon?

Certainly not the borrowers who put not one dime of their own money into their mortgages and are not require by law to pay once cent back. These defaulted mortgages afforded the borrower literally free rent in houses they could never afford thus leaving the banks no recourse but to repossess the often damaged properties with the borrower suffering no loss at all.

The government has wrongfully taken these bad loans off the backs of the banks who made them and put them onto the backs of the same 54 percent who pay all of the taxes and receive no benefit from all of this government largess; thus it is the government who prey upon the people who pay the tax bills with both the banks and the borrowers held harmless for this government inspired folly.

Re: "The important thing is to have a society that at least works for the majority of people. I think that is somewhere between capitalism and socialism."

This is an immature and a particularly un-american view of society. What "worked" for the majority at the Salem community was the hanging and drowning of presumed witches. What "worked" in ancient Athens, the first democracy, was the condemnation and execution of Socrates for questioning the wisdom of authority.

The American view of society is one based upon individual freedom; not collective "wealth sharing."

The founders understood the limits of the power of government over our individual freedoms. The proper use of government is thus to ensure the preservation of our individual liberties, not to adhere to some redistribution scheme that depends on the opinions of the camp with the most access to firepower to determine our individual "fair shares" of others' productivity and industry.

Re: "It is not true that in a capitalistic society a person owns or dictates his own worth through work. What happens now, is a person either takes the salary that a prospective employer is offering or goes without a job. I've never had a job where I was paid what I was actually worth."

Perhaps you have an inflated value of your worth. The fact that you say that you have "never" been paid what you are worth suggests this is probably the case.

Giving you the benefit of a doubt, if what you say is true, find an employer who will pay you what you are worth, failing that start your own business. It's very difficult, takes a lot of talent, hard work, long hours and if you succeed you can pay the hired help what each of them think they are worth.

Only the marketplace determines worth, not unions, not government, not pedigrees, and certainly not your own opinion; it by itself has virtually no "worth."

It is not true that in a capitalistic society a person owns or dictates his own worth through work. What happens now, is a person either takes the salary that a prospective employer is offering or goes without a job. I've never had a job where I was paid what I was actually worth.

So this aspect is obviously for a certain group of people who have the advantage in a capitalist society because of who they are or worse, who they know.

We need to get real honest here and start telling the truth so problems can be solved. Who cares what word is attached to what kind of society you have? The important thing is to have a society that at least works for the majority of people. I think that is somewhere between capitalism and socialism.

The greed (not competition) is the biggest problem in a capitalistic society because a lot of people will do anything to make the next dollar. This includes lying, cheating and stealing. You will find that in this kind of society, the less fortunate are often exploited in one way or another (i.e, pay higher fees, interest rates and general high rates based on where one lives) to line the pockets of those in financial power. This is capitalism run amok and no one wants to address it because a majority class of people have benefited from it enormously! This has become normal in capitalistic societies.

A balance needs to be struck somewhere between the two so that we all have a better chance to flourish and gain an understanding that you don't have to have your foot on your neighbor's neck to succeed and prove you're better.

We need to understand and be honest about the problems unchecked capitalism causes in any society and stop denying that it is the perfect system. It is in many ways far from it.

Re: "If you think it is OK to have crime and starvation endemic in a section of the population then your argument will be over smaller degrees of socialism/capitalism than if you argue with someone who sees great danger in having a starving underclass."

The most capitalistic society that I have ever experienced was in Hong Kong circa 1985. Some called it dog-eat-dog, laissez-faire, raw capitalism. Apart from a well run police department there was little government presence

from the then British governor.

Crime, almost non-existent.

Starving people: yes - boat people who were escapees from neighboring dystopian socialist regimes.

Vast disparities of wealth: Yes that's why everyone was trying to get in, not out. Opportunities abounded.

Capitalism is simply another way of saying that your work, your effort, your ideas, your industry belong to you and no one has the right to steal it from you for the benefit of the non-productive lazy louts in government, in academia, and the rest of the welfare class.

Color my neck red. At least red isn't the color of my political thinking.

A few thinkers and a lot of rednecks. I use the terms descriptively not intending to call names - that can be left to others who like doing that and are better at it than I.

Both of the categorizations of socialist and capitalist are usually misnomers because it is a matter of degree. Everyone displays some socialistic and capitalistic behavior.

Some are extremists and that is what the argument seems to be about if based on a similar moral acceptance.

If you think it is OK to have crime and starvation endemic in a section of the population then your argument will be over smaller degrees of socialism/capitalism than if you argue with someone who sees great danger in having a starving underclass.

Similar differences were seen when slavery was rampant and lawful but as that has changed in so much it is not now lawful. The words used are just a little different.

The situation is parallel and as much as the US tries to move ahead and leave the bad behind, some still appear to find that hard to do even though life and the rest of society is good to them.

Most comments seem to argue about relatively insignificant categorization and a bit of name calling.

That seems to be easier than looking looking ahead to where we need to go. The world is not our enemy; that beast lies within.

The fallacy is that most discussions here are speaking in terms of capitalist theory, rather capitalism as practiced in the U.S.

What we have in the U.S. is the concentration of power and capital in the hands of the (very) few.

Further these 'capitalists' have the backing of the legal and legislative (and sometimes executive) branches of government. In other words in a confrontation between capital and labor, government almost always comes down on the side of capital - whether or not justice is served.

The exception occurs when labor begins to agitate at a level that threatens the status quo. Then government - usually at the behest of capital - brings about just enough reform to stabilize the system, but not enough to effect any real and/or more equitable distribution of wealth.

We do not live in a true capitalist society, but rather an oligarchy. This was exemplified in my own personal experience when I was downsized (after a 40 year career, and receiving the highest possible review) as a cost saving measure, exactly one week before our CEO redeemed $800,000 in stock options more than 10 times my annual salary) he had received earlier the same year as a 'bonus'.

Communism = no government because everyone is the same. everyone does the same amount of work, and gets the same pay.(not very realistic)

Socialism = government stepping in to try to balance the wealth (more realistic)

It would be interesting to hear from someone who wasn't suffering from a Pavlovian reaction to the word Socialism.

Regarding number 13: Communism fails when it cannot trade with capitalists?

The Soviet Union was by far the largest country in the world and had wonderful communist trading partners in Eastern Germany, Poland, Romania, Hungary, Cuba, North Korea, China, etc etc

Result: The average Soviet worker spent four hours standing in bread lines, no meat, no fruit. Just bread and maybe some lard on a good day. A typical city of one million people was served by one or two gas stations - good stuff.

As for China, it has evolved and now fully embraces capitalism.

What 'communist' country has "for-profit" banks, corporations, and an open stock market?

Maybe communism is better for the looter class but when everyone decides that looting is easier than producing where does the loot come from; that is the "trade problem" of communism - nothing to trade but the idea of theft by government.

When unemployment reaches a certain level in a capitalist society, they are quickly outproduced by workers in a socialist system regardless of the work ethic concern. Socialist and communist financial models generally fail because of trade restriction from capitalist nations. When free trade is allowed, the socialist and communist financial models prove solvent (see China).

The way I learned it (way back) is that "socialism" usually means "democratic socialism" while "communism" means "totalitarian socialism" or "socialism under a dictatorship."

Communism is worse than socialism because the people collectively cannot make any adjustments. It's the ruler's whim. (Good to be king!) They argue that one person can react faster, like a commander in the military. But one person doesn't have the wisdom of the many.

However, socialism is worse than free-market democratic capitalism. People, using "spontaneous order," can adjust far better than any democratic process.

Furthermore, human nature shows that humans need personal motivation, which socialism doesn't account for. Even Ayn Rand's theory neglects the reality that A) people don't really know what's in their own long-term best interests, and B) even if they knew, there are conflicts with what is in your best interest and what is in society's best interest.

The problem that I see here are two things which makes socialism very unattractive. "Own" and "want". There is a necessity to highlight this, since the original article took such care in leaving out those essential details.

Under socialism, one cannot own anything specific, since everything is owned by all. This means every possession (think iPhone, books, car, house.) As it is, there is no _right_ of property in that structure. "You will be provided" is the essential credo.

Not many consider the difference between "I want" and "I need." Your *need* for food is met by the most minimum amount of calories per day. This can be tasteless goop, as practical example. Understand that quality is not a factor under socialism.

Your "want" is not considered under socialism. You will be provided with necessities, depending on the rules of what society deems necessary.

OpEd ...

On paper, socialism is terrific. It is the base for the Star Trek universe. But as with so many things, you introduce the human element, and you will find out that socialism doesn't work in real life.

Equality is achieved in socialism, but at the expense of quality. No motivation to be better than someone else, since there is no reward, no motivation.

I warn those glorifying the idea of socialism. You always have to consider that you want to live, that you have wishes and dreams that exceed the basic needs. Unless you break the rules, unless you exempt yourself from the confines of socialism.

Addendum: For those demonizing capitalism to be heartless to the have nots, consider the act of charity. Charity does exist, oddly enough with the USA, the epitome for a capitalist society, at the top of charitable efforts, especially in private contributions.

Seems that this country grew to be the greatest the world has ever seen under capitalism. Communism looks ideal on paper, but in its practical application it cannot work except in small and protected situations such as the Kibbutz. Communism in its actual embodiment has failed everywhere it has been tried, including untold deaths and imprisonments.

What was not mentioned is that under communism there is no incentive to do your best, because it doesn't really matter. Somebody else will pick up the slack for you if you just decide that you don't want to work as hard as everyone else, you'll still get your share. Whereas in capitalism, to be better off you need to work harder or smarter to get ahead. Therefore you are then responsible for your lifestyle and not dependent on someone else for your sustenance, your line of work, or your chances to succeed. In other words: Capitalism = your freedom to choose and it's consequences for good or bad. Communism = your inability to decide for yourself how you want to live. it's been decided for you.

RE: "Socialism is to Communism as Pot is to Heroin."

I thought I was a strict capitalist, but then read your comment. Put it this way, I promote socialism... socialism makes for a better concert, but screw communism

P.S. I just don't want AIDS

Capitalism = Individual power

Socialism = People (collectively) power

Communism = Government power with force

Re: "Isn't it under 'communism' that all resources are owned by all the people?"

Yep, just like with the White House and Airforce one. We all own them. Have you booked your nights in the WH or your rides on Airforce 1?

I hear the service is terrific. Oh I forgot you just "own" the bills.

Socialism is to Communism as Pot is to Heroin. Socialism is the gateway drug that sounds like lots of fun. Next to get introduced to something even more wonderful: Communism, by then your soul is dead.

to Anon31203: Communism and socialism is, if you ask communists or real socialists, the very same thing. The goal with communism is to abolish the state/government, the need for barter and setting up a system which would eliminate scarcity of the necessary resources we need to live a happy, normal life. This would be a (real) socialist society.

Isn't it under 'communism' that all resources are owned by all the people?