Capitalism, Socialism, Communism . . . What is the difference?
Capitalism and socialism are somewhat opposing schools of thought in economics. The central arguments in the socialism/capitalism debate are about economic equality and the role of government: socialists believe economic inequality is bad for society and the government is responsible for reducing it via programs that benefit the poor. e.g. free public education, free or subsidized healthcare, social security for the elderly, higher taxes on the rich. On the other hand, capitalists believe that government does not use economic resources as efficiently as private enterprise and therefore society is better off with the free market determining economic winners and losers. This lack of government involvement in the economy is called “laissez faire” (literally “let it be”) The U.S. is widely considered the defender of capitalism and large parts of Scandinavia and Western Europe are socialist democracies. However, the truth is every developed country has some programs that are socialist.
In the many years since socialism entered English around 1830, it has acquired several different meanings. It refers to a system of social organization in which private property and the distribution of income are subject to social control, but the conception of that control has varied, and the term has been interpreted in widely diverging ways, ranging from statist to libertarian, from Marxist to liberal. In the modern era, "pure" socialism has been seen only rarely and usually briefly in a few Communist regimes. Far more common are systems of social democracy, now often referred to as democratic socialism, in which extensive state regulation, with limited state ownership, has been employed by democratically elected governments (as in Sweden and Denmark) in the belief that it produces a fair distribution of income without impairing economic growth.
so·cial·ism | \ ˈsō-shə-ˌli-zəm \
A way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies
1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2a: a system of society or group living in which there is no private property
b: a system or condition of society in which the means of production are owned and controlled by the state
cap·i·tal·ism | \ ˈka-pə-tə-ˌliz-əm , ˈkap-tə- \
A way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government
An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market
com·mu·nism | \ ˈkäm-yə-ˌni-zəm , -yü- \
A way of organizing a society in which the government owns the things that are used to make and transport products (such as land, oil, factories, ships, etc.) and there is no privately owned property.
1a: a system in which goods are owned in common and are available to all as needed
b: a theory advocating elimination of private property
2a: a doctrine based on revolutionary Marxian socialism and Marxism-Leninism that was the official ideology of the U.S.S.R.
b: a totalitarian system of government in which a single authoritarian party controls state-owned means of production
c: a final stage of society in Marxist theory in which the state has withered away and economic goods are distributed equitably
d: communist systems collectively