Socialism And Capitalism SS1 Government Lesson Note

SOCIALISM

Socialism may be defined as an ideology that advocates collective ownership, control and organization of the means of production, distribution and exchange of goods and services. In this system, most of the factors of production and distribution are controlled and operated by the government on behalf of the citizens. Goods and services are produced to satisfy the wants of the whole citizens and not the profit derived.

This ideology was formulated by Karl Marx, a German (1816- 1883) and through this ideology; he hoped to fight the evils of capitalism.

Features of Socialism

1. The government owns and controls almost all the means of production and distribution.
2. Goods and services are not produced to make profits but rather according to the needs and satisfaction of the citizens.
3. There is a central planning of production, distribution and exchange of goods and services.
4. Full employment is one of the cardinal principles of socialism.
5. Socialism encourages equality and equal opportunities for all.
6. Wealth is distributed according to individual contributions and needs.

COMMUNISM 

This is the highest stage of socialism in which all the means of production and distribution are controlled by the government. Individual ownership of property is completely abolished in a communist state.

Karl Marx also propounded this ideology. The theory and principles of communism have it that the state owns everything and resources are distributed to the citizens according to their needs and ability. No country has ever practised Communism.

Features of Communism

1. Communism advocates the complete abolition of government and a stateless society where there is no government, exploitation or oppression;
2. It seeks to enthrone a classless society where everybody is equal socially and economically;
3. It stipulates a compulsory confiscation of private properties without compensation;
4. There is a centrally planned economy and the use of force in achieving a communist goal;
5. Citizens receive resources only according to their needs and ability.

CAPITALISM

This is an economic ideology, which permits individuals to own and control the means of production, distribution and exchange in a country, while the economic activity of the government is at a minimum.

This political and economic ideology has been practised in nearly all countries of the world since the fall of Socialism in the 1900s. In this system, private individuals who have economic strength participate in all sectors of the economy. Profit is the main motive or reason for participation as resources are allocated according to prices.

Features of Capitalism

1. Private individuals are permitted under the law to own and control most means of production and distribution. Government participation is at a minimum.
2. The consumers have a wide range of choice in a capitalist economy.
3. The forces of demand and supply of essential commodities determine their prices and distribution.
4. The major goal of the businessman in a capitalist economy is profit.
5. There is usually competition and economic rivalry between firms, consumers etc.
6. A capitalist society promotes a class society. There are three classes of people in a capitalist society. They are:

i. The Peasants: they are the downtrodden masses that are struggling to earn their living.

ii. The Bourgeoisie: They are the rich capitalists that own large business organizations and control political power. There are three types of Bourgeoisie.

They are:

a) National Bourgeoisie: they are people who become wealthy through hard work.

b) Comprador Bourgeoisie: they are those who make wealth through fraud, money laundering, drug trafficking etc.

c) The Petit Bourgeoisie: they are the emerging wealthy persons.

iii. Proletariat: this refers to the working class persons who earn their livelihood by selling their labour for a wage or salary. Apart from the proletariat, there is also a set of people known as the lumpenproletariat. They are the unemployed or rather under-employed people in society. They are usually a security risk in society.

7. Capitalism is often associated with democratic principles. This is evident in the choice of leaders and permission of individual liberties.
8. A capitalist state allows freedom of enterprise. Private individuals can own companies and manufacture goods of their choice.
9. There is the use of advanced technology for a high level of productivity to be ensured, favourable competition and an increase in profit.
10. The masses can determine what type of goods to buy and where to work. There are no laws restricting people from working in any particular firm or for the government. 

There is personal liberty.