Do Some Basic Research Online And Write An Essay Defining And Comparing Capitalism, Socialism, And – Coursework Example
Capitalism, socialism and Keynesian economics Capitalism is a form of an economy whereby the percentage of government involvement is very small and hence the market forces are left to operate freely both in the public and private sector (Abel 543). It ends up making the society have different classes of people due to the exploitation of the low income earners. An example of a capitalist economy is the US. It favors a lot of competition compared with socialism that supports cooperation. The services and goods produced are always intended for making of profits and therefore capitalism encourages greed. This economy has consumer choice, efficiency, growth and expansion increasing the gross national product even though it leads to monopolistic practices (Pigou 249).
Socialism on the other hand is a form of an economy characterized by a huge percentage of government intervention. The households and firms produce, but the distribution is done by the state. Compensation of individuals is done by the state and a major setback to this view is its failure to recognize special skills and talents from the citizens. Thus socialism can be said to encourage envy since everyone gets a little bit of the national cake despite extra effort that may have been put. An example of a socialist economy is Cuba. For the socialist they advocate equality in society and thus there is no class existence. A socialist economy has significant social welfare with absence of monopolistic practices (Goodwin 553).
Keynesian economics is an economic theory founded by John Maynard Keynes (1883-1946) during the great depression advocating the use of monetary and fiscal policies for economic growth. He supports the government intervention in the economy using public policies to achieve full engagement of citizens in employment and price stability. His view is that in the short run economic output is strongly influenced by the aggregate demand (Ben 553). Neither capitalism nor socialism can entirely be implemented in an economy due to internal weaknesses associated with each one of them as seen from Wall Street Crash in 2008 and also failure of the economy in Cuba.
Abel, Andrew; Ben Bernanke. Macroeconomics (5th ed.). New York :Pearson, pp. 543–557, 2005. Print.
Goodwin, R. “A Growth Cycle,” in C. H. Feinstein (Ed.) Socialism, Capitalism and Economic Growth.Cambridge: Cambridge University Press, 1967. Print.
Pigou, A. C. Socialism versus Capitalism.London: Macmillan, 1937. Print.