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The major differences between capitalism and socialism are established around the role of the government and equality of economics. Capitalism affords economic freedom, consumer choice, and economic growth. Socialism, which is an economy controlled by the central state, provides for a greater social welfare and decreases business fluctuations.



One of the bigger advantages to capitalism is consumer choice, which not only lets people decide what they want, but also leads to more competition among companies, which in turn leads to better products and service. Another point is that goods and services that are produced based on consumer choice create incentives to cut costs and avoid unnecessary waste.



Now, some of the disadvantages of capitalism is a chance of a monopoly of companies with monopoly power, which means they can abuse their power and charge higher prices than what was originally charged. Another disadvantage is inequality, if a capitalist society is based on the right to pass down wealth from generation to generation, and only a small group of people are holding onto the wealth, it continues to be passed down to the same small group of individuals. In turn, social inequality and social division take place.



A big advantage of socialism is that the citizens are equals and the wealth that is earned by employees is distributed equally among people. Not only that, but the government insures fairness in resources, utilization and distribution. Socialism also diminishes class distinctions, so there is no longer middle class, lower class, or higher class, and all of peoples basic needs are met in a socialist economy including but not limited to, shelter, education, and healthcare.



The disadvantages of socialism include, government inefficiencies, when the government owns all of the resources, workers can lack the motivation or incentives to work hard. When people are working for the state or a business they typically are trying to move higher up in the company, and earn more money by getting promoted. When there is no motivation for a greater reward, people can lose the incentive to work as hard as they once did. Another disadvantage is higher taxes, which may decelerate economic growth.



In conclusion, I believe that capitalism provides a greater benefit to society. Not only is consumer choice important but so is economic growth. Though there may be some downsides to capitalism, like monopolies. In my opinion, it benefits the people greatly and gives people freedom to choose.