What are the differences between the economic systems of capitalism and socialism?

Answer 1

The most obvious difference between these two is their economic philosophies, in socialism the economy is usually controlled by a private company and this company is owned by the government of that nation. Now in capitalism the economy is run by the people and the government usually stays out of the way.

Answer 2

Capitalism refers to individuals owning private property. They buy and sell resulting in profit or loss. If you have good business practices, you make money. If you have bad business practices, you fail. Therefore, it is kind of self-regulating. Just. You reap what you sow. Although, there is lots of room for abuse, (big companies can use their money as an advantage over smaller businesses. Monopolies are an example.)

Socialism refers to the government being the sole owner of private property. (In that, there is none. "Private property" actually belongs to the government.) Anything you produce gets "donated" to the government and is then "distributed" based on need. (google the term: "From those with ability, to those who need) While this sounds wonderful: "Hooray! We'll all be equal and everyone will get what they need!"....in reality YOU don't get to determine who "needs". The government does. Therefore, you may slave away, make all kinds of things, and be super productive....only to have the government determine that Joe Smith needs the fruits of your labor more than you do and reward him. Kind of like the welfare system in the U.S.: Bob works hard, makes money, and pays taxes. Steve sits at home, watches T.V. and gets a welfare check from the tax money collected from Bob. After all, he needs it more than Bob does.