ofiting the owners of the means of production while production in socialism is aimed at provision of goods and services based on the needs of the populace. Another difference is that production in a capitalistic economic system is determined by demand for goods and services while production in socialism is controlled and pre-determined by a central authority that makes the decisions on what goods and services are to be produced and the quantity of their production. The determinants of the prices of goods and services are different in either system; prices in capitalism are determined by the market forces of competition, demand and supply whereas the prices in a socialist economic system are determined by the same central authority that determines production (Brinkethoff, 301).
History of the two economic systems tends to put the two in diametric opposition of one another but this outright dissimilarity has faded over time and the two systems now have similarities. Socialism, which was based on the tenets of communism, has adopted a more pragmatic approach allowing for the making of profit. The purpose of this is to motivate higher rate of production of goods and services and guarantee better quality; a feature that lacked in socialist states as shown by production of shoddy goods and shortages in communist Russia. Means of production have also been privatized in socialist states to ensure efficiency in production (Brinkethoff, 303).
Capitalism has made some conspicuous changes, transforming from an unscrupulous system that only cares about profit to a system that also cares about the wellbeing of the worker; a feature that was exclusively associated with socialism. Some of the measures that have been put in place to ensure the worker is not exploited include mandatory health insurance and the imposition of minimum wage. Government policy has also ensured workers have access to basic amenities through unemployment compensation, social welfare systems, social