There has been a lot of talk about capitalism and socialism. Some people want the government to have more control in the lives of everyday Americans in a socialist system. Others say that a capitalist system is better and that more powerful government can block freedom. What is the difference between the two systems?
What Is the Free Market?
Under capitalism, people can buy and sell as they want, and they are in control of their own money. This system does not involve a lot of government control. The government is not allowed to tell the people what they can buy or sell. The government does not manufacture (make) or sell products. It does not decide what prices items can sell for – companies and business do this.
What is Socialism?
Socialism gives that government more power than capitalism does. A socialist system usually does not have free markets where companies can compete with each other. Instead, the government controls the economy. The government is is charge of the manufacture and sale of products and services. It also sets the prices for each product.
Which System Do We Use?
The United States has a system that is mostly capitalistic but includes some aspects of socialism. For example, the government does not completely control the health care system, it is involved through laws like the Affordable Care Act, also known as Obamacare.
People disagree on how involved the government should be in American life. Socialists want the govern to have a larger role in the economy because they believe it will help more people. Capitalists usually disagree, and point to socialist countries like Venezuela and North Korea as examples of countries that end up with poor people and laws against freedom.