At their foundations, Socialism (central planning) and Capitalism (free markets) arise from two very different, opposing views of human behavior.
The fundamental differences between the two economic models explain why. Historically, free markets have flourished and central planning has a record of abject failure.
Capitalism embraces the reality that the human race responds best to a program that rewards initiative and satisfies the self interests of the individual.
Free markets embody that philosophy believing we are all better off in an economy that allows the most people to pursue their personal goals independent from outside political pressures, regulations and directives.
Socialism requires a strong central planning element that defines the best outcomes for all the citizens regardless of the personal goals and ambitions of any individual.
Central planning is built on the idealistic model that a few well-informed and well-intentioned people in authority can build a successful economy better than one driven by the individual goals and ambitions of its citizens.
Neither Socialism nor Capitalism as implemented by its proponents functions without problems and disparities ... but the economic model which best describes and harnesses human nature has a proven record of creating wealth and the highest standards of living for its citizens.
Free market economies have proven historically to harness the power of individual goals and dreams for the maximum benefit for the maximum number of its citizens.
Central planning economies have a history of failing to produce the utopian promises of its leaders and traps more people in poverty and despair than free markets have ever done.
Socialism functions for the benefit of the ruling elite who are prospering from the hard work of others. Although motivated by their own personal self interests, they expect the citizens to be more motivated by selfless altruism foregoing personal self interest. On the other hand, Capitalism acknowledges that humans produce the best results when pursuing their own self-interests.
Ironically, studies on the subject shows that the more freedom and opportunities an economy provides, the more philanthropic its citizens. While in societies directed by authoritarian central planning efforts there is measurably less willingness by its citizens to give to charitable causes.
It is impossible for a socialist economic model of any size and complexity to function without a strong bureaucratic government. Said another way ... with minor exceptions, history reveals that to establish and maintain a socialist state, the development of a strong authoritarian government is a prerequisite.
Capitalism, at its core believes what you produce is yours .... Socialism believes what you produce is theirs.
Capitalism, at its core believes you can spend your money best .... Socialism believes they can spend it better for you.
Capitalism, at its core believes you can best define your own self-interests .... Socialism believes they know what’s best for you.
Capitalism, at its core believes you preform best when pursuing your own self-interests .... Socialism believes top performance can be achieved without personal incentives.
Capitalism, at its core believes in personal property rights .... Socialism believes the government owns it all.
Capitalism, at its core believes you are smart enough to make your own decisions .... Socialism believes you need their help.
Capitalism, at its core believes in smaller government .... Socialism demands bigger government.
Capitalism, at its core prioritizes the value of each individual .... Socialism elevates the state above all.
As they say, “It don’t take a rocket scientist” to figure out why free markets work and central planning doesn’t!