Capitalism vs Socialism
Before we try to find out the differences between capitalism and socialism, it is prudent to have a look at the turn of events that led the development of socialism and finally communism from capitalism that had played a vital role during the industrial revolution in England and later in France, Germany, Japan, and many other European countries. The invention of the steam engine, mass production, and the industrial revolution in Britain meant a large-scale displacement of people from rural settings to cities where industries were established, making them work as wage earners. Capitalists that owned industries and mines attracted men and women from villages to cities where they were asked to work for long hours at low wages.
These events had a drastic effect on growing inequalities with rich becoming richer and poor becoming poorer. The great depression in the thirties prompted many countries to look for alternatives to capitalism. Thinkers like Karl Marx proposed state ownership of means of production (resources) and equal share of all. This appealed to many countries, especially the Eastern Bloc countries that adopted socialism, which appeared to them as being superior to capitalism.
The proponents of socialism suggested that the problems of unemployment and financial crises would not arise as economy would be planned with means of production, and distribution remaining concentrated in the hands of the state. This would safeguard the interests of the individual, as he would be shielded from the unpredictable forces of the market-dominated economy.
Socialists dreamt of a classless society as against the extremely rich and poor divide in capitalism, which was inevitable with individual property and ownership of means of production remaining in the hands of private people. Socialists argued that with wealth being equally distributed, there would be no poor, and all will be equal.
It was in 1917 that Soviet Union adopted socialism as state instrument of controlling the economy under the leadership of Vladimir Lenin. The initial success of the policies of the communist government attracted many other countries with China, Cuba, and many others following suit.
Capitalism, that is based upon the belief that competition brings out the best in people, evolved in 15th century, and ruled supreme in the world till the 20th century, with the industrial revolution taking place in countries with capitalism in place. Capitalism encourages individual enterprise with the incentive of earning more and rising up the social ladder working to motivate people. Private ownership of property means, wealth remains concentrated in the hands of capitalists, and they gobble up most of the margins with a very small share going to those who work in factories and mines, to produce goods and services.
The world has seen the rise and fall of socialism and the loopholes in capitalism. No one system is perfect and can be installed discarding the other. While there is no doubt that capitalism has survived the onslaught of all other ideologies like communism, socialism, etc, it is a fact that the great bubble of communism has burst with the breakup of Soviet Union and failing of other communist economies. The time has come to evolve and put into practice a system that takes up salient points of both ideologies, not only to encourage private enterprise but also implement government control in resources to work for the good of the poor and the oppressed in the society.