How does the capitalist and socialist systems produce/distribute goods? And how does it maximize freedom justice+general interest (look below)What is the capitalist view/opinion on how to...

How does the capitalist and socialist systems produce/distribute goods? And how does it maximize freedom justice+general interest (look below)

What is the capitalist view/opinion on how to produce/distribute goods. And what are their main points to support this? How does their view maximize freedom of justice+general interest?

What is the socialist view/opinion on how to produce/distribute goods. And what are their main points to support this? How does their view maximize freedom of justice+general interest?




Asked on by biancaxox

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geosc's profile pic

geosc | College Teacher | (Level 3) Assistant Educator

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Under the capitalist system, producers produce the goods that they think consumers want, then if consumers buy those goods, they make more of them.  Under a free market, each producer is free to produce what he thinks is needed, and each consumer is free to buy what he thinks he needs.  Producers receive signals about what to produce from the buying habits of the consumers.  The market is not always free; sometimes capitalists get government to creat a captive market, such as the California wine makers got government to place a 100% tariff on French wine, so that Americans have to buy the high-priced California wines instead of the lower-priced French wines.  [They claim we are still free since we can still buy the French wine if we are willing to pay a lot more for it than the French wine-maker is asking for it.  This is just a sophism (smoke and mirrors).]

Under the communist system, producers produce what ever a central, governmental planning board tells them to produce.  The few people on a planning board can never know nor sift through all of the information that the free market produces and sifts for the capitalist producer.  The communist consumers have to buy or reject whatever is put before them, because the producers are not responding to whether or not the consumers actually need their products; the producers are only responding to the central planning board, which cannot know and may not care what the consumers need.  The planning board's decisions may be driven by factors such as a member of the governing body has a lot of rubber plantations and wants automobile tires made from natural rubber instead of better petroleum based rubber.  (This kind of decision can be made under capitalism too.) 

Guideance for the producer under capitalism comes from politically powerful individuals and from the market.  Guideance for the producer under communism comes from the politically powerful and from communist party ideology.

Ideology is a political doctrine that promises salvation in the here and now if everybody will just do everything that the ideologist wants them to do, and if everybody does not want to do these things, then everybody must be forced to do them, or eliminated (starved, executed, worked to death).  Ideology is really just the excuse of a power-hungry, and evil person or party of persons to sieze and hold all political power.

The principle of communism is to have everything, including production, serve the siezing and holding of power.

akannan's profile pic

Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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In many respects, the answer to this depends on the point of view assumed. For the Capitalist response, the preservation of the marketplace is what constitutes justice, along with the institutional guarantee of individual freedom to pursue ends of self- interest.  The ability for the market to determine specific winners and those who are not as successful is what must be maintained within all circumstances.  It is in this idea against which the socialist aim strives.  For the Socialist, justice has to be defined by the equitable distribution of the ownership of the means of production.  Profit is not seen as an individual aim, but rather one experienced by the collective entity or element.  The marketplace has to be deemed as secondary to the needs and interests of the social group, at large.  Whereas the capitalist vision sees freedom as an individual quest, the socialist sees it as a social element that must be experienced on a collective sphere.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

Capitalist systems produce goods based on what consumers demand.  Firms will produce anything that people will buy (at a price the firms can accept).

Socialist systems produce goods based on what the government believes the people need.  Factories and such produce what the government tells them to produce.

Capitalist systems distribute goods based on who wants them and can afford them.  Anyone who wants a good and has enough money gets it.

Socialist systems distribute goods according to need.  At least in theory, those who need the goods get them.

Those who like capitalism say it gives the people what they want.  And the people get the best possible quality, variety, and price.

Those who like socialism say that it is fairer because no one has to do without things they need just because they don't have enough money to buy them.

krishna-agrawala's profile pic

krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted on

The primary difference between the capitalist and socialist system is that in capitalist system the means of production, which may be described as capital, is owned and controlled by private individuals, while in a socialist system the means of production is owned and controlled jointly by the people in the society. In practice, the joint ownership and control by the society takes the form of ownership and control by government.

The distribution of goods and services produced among different groups of people in an economy are also determined in different ways in capitalist and socialist systems. The capitalist system relies on the market mechanism and the competitive forces to determine this. It is argued that under ideal market condition this results in maximisation of benefit to the entire society. The socialist system, on the other hand, believes on equal distribution of the total goods and services of the economy among all the members of the society. It is further believed that central control of the means of product results in most efficient and effective production, leading to highest levels of economic production for the society.

The systems described above are theoretical models. In practice neither pure capitalist, nor pure socialist models of economy exist. Further, though the theoretical logic of both the system is valid, neither of the theory works in practice as envisaged. The capitalist economic system gets distorted because of market imperfections and the socialist system suffers from the increasing cost of centralized control, which increases in geometric proportion with the increase in size of operations to be managed.

Therefore, in practice, neither a pure capitalist or pure socialist system of economy works well. The best results are obtained by a judicious mix of the system.

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