We explain what socialisms and capitalisms are and what their objectives are. Also, their general characteristics and differences.

What is Socialism and Capitalism?

Socialism and capitalism are two social, political and economic systems of antagonistic relationship in terms of the management of goods and the mechanisms of production in a society .

Both terms are in common use in contemporary social and political debates , and popularly represent the two opposing models for the management of societies: one focused on the accumulation of capital ( capitalism ) and the other on the social management of production ( socialism ). .

The struggle between these two models stems from the times of the Cold War , in which two political and economic blocs in the world opposed each other: the communist, orchestrated by the USSR and the capitalist, by the United States and the allied countries ( France , England ) .

Characteristics of socialism and capitalism :

  1. origins


The capitalism as a system of socio - economic organization born in the Europe of the sixteenth century, in the context of the rise of mercantilism and replacement of the old feudal aristocracy by the bourgeoisie .

The socialism arises in the context of the French Revolution , the French philosopher Francois Babeuf, and will have different meanings and transformations over the centuries utopian socialism English, first to consider the proletariat as a social class independent, and philosophical, heir to French humanism .

  1. Concepts


The capitalism is a system of ordering the production of goods in which the upper classes control the means of production and benefit from the goodwill generated by workers, ie control over once covered production costs, building up monetary wealth to reinvest in various ways.

The socialism is a model that socializes control of the means of production , giving most of them (if not all) the workers themselves for the distribution of wealth is equitable between those involved and does not produce the "exploitation of the man for man ”, as Karl Marx called it .

  1. Differences between capitalism and socialism

The fundamental differences between capitalism and socialism have to do with private property : in capitalism the private property model allows the owner of the means of production to concentrate the surplus value, while socialism proposes a social or state property that has the purpose to satisfy the needs of workers rather than to generate wealth.

  1. Types of capitalism

Types of capitalism

There are many forms of capitalism, developed over the years that this system has remained in force. We can talk about, fundamentally:

  • Mercantilism . An early and nationalist form of capitalism, emerged in the 16th century and that goes hand in hand with imperialism and the interests of the State .
  • Free market . Also called “ laissez faire ” (from the French “let it be done”), it is a capitalist system with minimal state intervention, in which supply and demand regulate the characteristics of the economy .
  • Social market economy. Similar to the free market, but with minimal state interventions to provide protected basic services to the population , while keeping most of the companies as private property.
  • Corporate capitalism. Form of capitalism in which companies and large transnational corporate capital exercise economic dominance, managing the State in favor of its growth.
  • Mixed economy. A kind of intermediate capitalism, which believes in private property and in the self-regulation of the market , but corrects its possible “failures” through public protection policies.

  1. Types of socialism

Similarly, in its numerous attempts at application, various types of socialism have been theorized:

  • Utopian socialism. The first socialist current that emerged in the 18th and 19th centuries in Europe , emerged as an alternative to the terrible working and living conditions to which the socialism of the time subjected urban workers and peasants.
  • Scientific socialism. With this name, Karl Marx distinguished his proposals, drawn up together with Friedrich Engels, from the rest of the socialist doctrines of the time. It is so called because it proposed historical materialism as a doctrine of "scientific" study of societies.
  • Democratic socialism. Also called "social democracy", it pursues the democratic construction of a fairer system, which can gradually reform the political and socioeconomic mechanisms.
  • Christian socialism. An attempt to impose socialism from the Christian religion and its moral values . Many affirm that from the earliest times of Christianity, this ideology was already professed.

  1. Policies


  • Capitalism. It has shown enormous adaptability to the most diverse political and social organization regimes, although liberal democracies seem to be the ideal settings for its full realization and its greatest generation of wealth.
  • Socialism. It tends towards the centralization of economic, social and political power in one-party models, which can make the pertinent decisions and maintain the stability of the system. This has often led to dictatorships and authoritarian regimes.

  1. critics

Both systems have been the subject of much criticism from their detractors.

  • Capitalism has proven not to be a naturally fair model, far from it, of wealth management: it has caused not only enormous social inequalities, margins of poverty and therefore urban and rural violence and misery, but also sustained ecological damage.
  • Socialism is reproached for its tendency towards authoritarianism , its ability to abandon democracy in the pursuit of social and economic justice , as well as its economic management that tends towards distribution and redistribution rather than the generation of wealth.

  1. Society model

Society model

The build class societies capitalism , Karl Marx defined as a perennial " class struggle ", in which the lower sectors aspire to climb higher and try to stop them to keep their privileges obtained.

The socialism instead pursues a classless society in which the distribution is equitable and not privileged sectors exist.

  1. Economy


The economies of socialism and capitalism operate, in theory, in a very different way , since the first model is attached to the planning and control of the economy, while the second allows the "free" occurrence of the economy, based on supply and the demand for its self-regulation.

  1. Communism

In theory, socialism would be a transitional regime towards communism: a true society of economic and social justice and equitable distribution of wealth . But so far there is no evidence of the real possibility of achieving such a system.

The above content published at Collaborative Research Group is for informational and educational purposes only and has been developed by referring reliable sources and recommendations from experts. We do not have any contact with official entities nor do we intend to replace the information that they emit.


Passionate about understanding and contributing to a world that does not stop changing. New forms of Work, Sustainability and Technology. For many years he has worked as a creative for large international companies. He has a Ph.D. in information technology and he has been doing quantitative research in the interdisciplinary areas of information systems, cyber security, data analytics and artificial intelligence. He continue to look for creative solutions through technology to help companies to be more humane and sustainable..

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