Macroeconomics
May 13, 2014
The Two Economic Systems Throughout history there have been two basic forms of social organization: collectivism and individualism. To briefly define each one is to say capitalism is an economic and political system in which all the means of production and distribution are privately owned and operated within a free market society. On the other hand Socialism is an economic and political system in which all the means of production and distribution are collectively owned and operated by all members of a society.

In my opinion, both systems, in their purest form, have their pros and cons. Capitalism promotes a free market system whereby citizens are practically free to create almost any product or provide almost any service and ideally start their own business to make their own profits. One of the main selling points of capitalism is that it’s a system that primarily self-regulates. It’s meant to keep prices and the quality of products and services at least half way decent. Of course it doesn’t always work out that way, but that’s the general idea.

Another wonderful thing about capitalism is that it aims to preserve economic freedom from excessive government control. However, there is always at least some government regulation involved, as there should be in my opinion. Though most hardcore capitalists believe in the French expression Laissez-Faire, which means “leave it alone.” They hold to the idea that if government would just stay out of the way and not legally interfere or try to regulate what business owners can and can’t do, all would go well. Although in my view, as well as in the view of most leading economists, this is not realistic. The list of corruption that rises under a completely free market, is too long to go into. You know the old saying, “If you give them an inch, they’ll take a mile.” When