Capitalism and Socialism - Essay Example

These two distinct economic philosophies have certain features that define them. The features of each of the philosophy are evident in each of the society that practices a particular ideology (Bradley and Roger 71). Both Capitalism and Socialism have key tenets that are used to identify and define them. The first key tenet of capitalism is individualism; in a purely capitalist society, personal and collective successes are based on individual efforts and interests (Schumpeter 95). In these societies, individuals are responsible for protection of their own interests within their communities and in the marketplace.

Since the role of the individual is very important, these societies tend to value the potential success of particular individuals. As such, individuals are encouraged to direct their skills, knowledge, and talents in ways that would benefit them, such as entering into profession that are highly profitable (Schnitzer 34). Competition is a feature related to individual and is a key tenet of capitalism. Competition rather than cooperation is emphasized in capitalistic societies. Since individuals are responsible for their success and interests, they ought to compete with others in order to achieve their personal and communal goals.

Capitalistic societies rely on the checks and balances system that bring about competition (Bradley and Roger 73). Individuals who own capital should compete with others in order to provide goods and services; in order to do this effectively there are mechanisms in place that regulate their activities. Another key tenet of capitalism is free market. In a capitalistic society, the economic system is based on corporate or private ownership of production and distribution of goods and services. In such a system, there is very minimal interference of the economy by the government as the law of demand and supply are left to prevail (Schumpeter 104).

Like capitalism, socialism has its key tenets. The first key tenet of socialism is collectivism where capital ownership is concentrated in the state rather than on individuals. The socialist states, the state is in charge of economic planning, as well as production and distribution of goods and services (Bradley and Roger 78). Another key tenet of socialism is cooperation; unlike capitalism that encourages competition, socialism encourages cooperation among individuals towards achieving the collective goal of their society.

This system believes in the economic sovereignty of the whole society rather than individuals (Schumpeter 111). In addition, controlled-economy is a key tenet of socialism. Rather than having a free market, socialist societies have centralized economic power that regulates significant economic activities and controls prices of commodities, rather than allowing market forces of supply and demand to prevail like in capitalistic societies (Schnitzer 66). Considering that these two are very different economic philosophies, I think that capitalism is more viable in the age of technology.

It is no doubt that the age of technology has brought with it changes in the economic systems such as emphasis on liberalization, speed, and versatility in doing business and way of living. As such, socialism may hinder the societies from realizing the full benefits of economy in the technological age (Schumpeter 124). Since