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Differences between Capitalism and Socialism/Communism

1. Ownership:

Under the capitalist economy, individuals own the means of production and distribution of their goods. In a socialist/communist economy, the State owns the means of production and distribution of goods.

2. Production:

The capitalist produces for the purpose of making profit. The socialist/communist produces mainly for the need of the people or society.

3. Prices:

Under the capitalist society, the forces of demand and supply determine the prices of goods but in a socialist/communist society, the government of the State regulates prices to avoid exploitation.

4. Salaries/Wages:

The salaries/wages under the capitalist societies are not commensurate to the amount of labour put in by an individual. This is because, the capitalist tries to maximise the cost of production in order to make more profit. The socialist/communist society pay liberal salary/wage taking into consideration the amount of labour put in by the workers.

5. Taxation:

The capitalist society charges excessive tax on both the workers and the companies and this in turn is ploughed back into the business for more profit making. The socialist/communist charges little or nothing at all because of the welfare nature of their societies.