What is the disadvantage of socialism and capitalism?

Answer 1

Because of capitalism many companies / businesses, start to form barriers. Not just those but even people who are just working to earn money start to form barriers with others because of wealth or just how much money they earn.

Also, they government control is limited so less businesses can dominate their industry . :) i hope this helped

• It is not acceptable in most modern societies to allow portions of their population to be "culled".
• Those in power tend to construct rules that limit diversity and competition, thereby weakening the flexibility and strength of the system as a whole.
• Vast imbalances in opportunity encourages revolt, which disrupts and destablizes the system.

Answer 2

A disadvantage of Socialism is that it requires heavy government intervention to create equality and make sure profits benefit all equally. This is not good if your goal is to acquire wealth. A disadvantage of capitalism is that it creates a situation where great wealth is held by a small percentage, creating class systems.

Answer 3

There is slot of waste among the elegy waste in food and goods. There are also starving people all over the country due to all our waist when we probably have enough to feed all starving countries.

Answer 4

Not all governments with the word "Socialist" in them are socialist and there are a wide variety of socialist governments in the world. However, they have many of the same drawbacks:

1) Command Economy: Socialist economic policy creates national firms that are owned and operated by the government. Policy, as opposed to the market, becomes the primary determinant of how much or little of a certain good is produced. This leads to overproduction in cases where the government is trying to convince citizens to buy something and far more often leads to underproduction when the government does not provide sufficient amounts of an item because it does not believe those quantities to be necessary.

2) Limiting of Rights: Since socialist governments have a large and concentrated federal authority, this usually results in limitations on rights of the individual since the government is so expansive, every major lawsuit is an internal matter. Freedom of Speech is contingent on whether the State-owned newspapers wish to print what you say. Freedom from search and seizure has no independent judiciary to support it etc. While it is certainly possible to create a socialist state where fundamental rights are guaranteed (like Sweden), it takes a lot of work to make it feasible.

3) Welfare Expenditure - High Taxes: Socialist States provide medical and social benefits to citizens who need the funds. In order to provide for such a large expenditure, tax rates are very high in socialist countries. Income Taxes in Sweden, for example, can be as high as 70%. This greatly diminishes buying-power and loses funds through bureaucracy costs.

4) Fewer Incentives for Progress: One of the best incentives for inventors and scientists is the lucrative profits that come through patent protection and sales. With the high level of taxes, much of this monetary incentive is gone and this usually stalls technological progress.

Answer 5

The basic choice in economics is between various forms of capitalism vs. socialism. Capitalism is a system which depends upon people to act on selfish motivations. Since selfishness is a nearly universal trait, capitalism is successful in motivating people. On the other hand, as people become increasingly selfish, they often abuse other people, so capitalist societies often involve terrible injustices (sweatshops, child labor, etc.). Socialism is based on the needs of society taking precedence over selfish individual needs, so when it is done honestly, it overcomes the problems that arise from selfishness and gives a more fair and equitable society, but on the other hand, since people are for the most part still selfish, they will often fail to cooperate with a socialist economy, which is among the main reasons why the USSR collapsed after 70 years. People are much more likely to be devoted to their personal gain than they are to be devoted to social good. So, neither alternative works all that well, but some combination of the two seems to work better than either one does by itself.

Answer 6

There are three main disadvantages of unregulated capitalism:

Unregulated Capitalism Issues
One of the primary disadvantages of unregulated capitalism is that the accumulation of capital can lead to the creation of monopolies. Monopolies remove the primary benefit of capitalism, which is that there is constant competition between producers, allowing for the creation of a low price for consumers. Monopolies then can sell their products for exorbitant prices and impoverish consumers.

Capitalism also provides no mechanism to incorporate negative externalities into production costs. For example, a company can produce a television for $300 with a lot of pollution or produce a television for $400 and not produce any pollution, the market pressures would lead to the company producing the television for $300 and creating a lot of pollution in order to get the most profit. This leads to a worse environmental outcome.

Finally, capitalism has no mechanism for requiring that laborers are paid a wage commensurate with their contribution to the business, but rather that laborers are paid a wage based on competition between laborers. This often drives the wages of workers down tremendously. In many cases, laborers tried to strike and the business owners will either use strikebreakers (violent thugs who attack the striking workers) or make sure that the law bans collective bargaining and unionizing. In this way, laborers, who have few other opportunities to put food on the table, are forced to work for far less than their work is worth.

Note on Unregulated Capitalism
Unregulated capitalism has more-or-less been expunged from the First World. The United States, Canada, Europe, Israel, South Korea, and Japan all have regulatory agencies that address questions of anti-trust/competition, environmental preservation, and labor rights. Unregulated capitalism, however, does prevail in many developing countries where the government infrastructure is either lacking, corrupt, or so desirous of trade and wealth that they ignore the blatant problems associated with unregulated capitalism.

Answer 7

Capitalism implies exploitation, inequality and poverty. Socialism is a classless stateless society with none of those problems.