Capitalism&Socialism - Admission/Application Essay Example

Capitalism and Socialism. Capitalism and Socialism are diametrically opposed political, economic, and social systems. In a capitalist system, the means of production are owned by private individuals, government intervention is limited and a free-market economy rules. Here, economic freedom is the greatest advantage.  Due to competition, private firms are innovative and efficient, leading to economic expansion and improved living standards. On the other hand, capitalism often leads to economic disparity and monopoly of wealth.

The profit motive may cause a tendency towards environmental degradation, unfair pay practices and unsafe working conditions. Money becomes the only criteria of success and the rich exert undue influence over the government. In a socialist system, the state controls the means of production and decides the distribution of goods and services. Education and health care are guaranteed to all. There is less economic disparity and the state strives to ensure that there is employment for all its citizens.

However, socialism imposes a high burden on the government and this results in proportionately high taxes. Entrepreneurship is discouraged as the creators of wealth end up paying higher taxes. This can lower the living standards and reinforce the tendency of people to be lazy and depend largely on the government to meet their needs. Capitalism is the better form of government, as it recognizes the fact that individuals inherently have different capacities, degrees of intellect and aspirations.

By rewarding hard work and merit, capitalism encourages innovation. It restricts state intervention and ensures that the concentration of power in the government does not lead to a bloated, inefficient bureaucracy. Most importantly, capitalism respects individual freedom of choice and creates an open environment which nurtures personal growth. It provides the infrastructure needed for any enterprising individual to make a success of his or her life, regardless of the circumstances of his birth.