The concept of capitalism is based on private actors and favors free-market dynamics and individual control of the property to best serve their interests hence the society. Alternatively, socialism is a left-wing political and market philosophy typified by the dominance of society and government in ownership and production to yield a more egalitarian society (Piketty et al., 2019). For instance, public transport in China is controlled by the government and subsidized. While the U.S is a capitalist nation with Free Market Economy FME with individuals and corporations controlling production and the market, China is a Socialist Market Economy SME where production and market dynamics are government controlled.
First, compared to socialist China, capitalist economics in the U.S are more efficient and favor consumer choice and economic growth. Since the production of goods and services in capitalist systems is based on demand and supply market dynamics, there is high-quality assurance, low wastage, and high per-capita output. However, the unregulated market in capitalism has the disadvantages of monopoly power, high social inequality, and increased business and economic fluctuations. The significant advantages of socialism in China include social security schemes, business, economic stability, and minimized poverty levels. On the downside, socialism implicates poor entrepreneurial opportunity and competition, less consumer choice, and reduced individual initiatives. Therefore, following individual and corporate freedom in capitalist economic systems, there is more competition, productivity, and quality control in the U.S as opposed to state-regulated China.
To conclude, by incorporating capitalist methods into a socialist system to boost economic progress, China’s socialist political system has proven to be efficient and feasible. CCP upholds the co-existence of public entities and private capitalists and entrepreneurs controlled by the state, enhancing competition and economic performance. However, Capitalist America has better market economics, consumer choice, and economic performance than China.
Reference
Piketty, T., Yang, L., & Zucman, G. (2019). Capital accumulation, private property, and rising inequality in China, 1978–2015. American Economic Review, 109(7), 2469-96. Web.