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

 

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
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.
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