Question

6. List two characteristics of Socialism, Capitalism, Feudalism, and Mercantilism.

Answer 1

Characteristics of Socialism.

Socialism is an economic system where all the means of production are collectively owned and used for common good instead of private gain. The socialism has been interpreted differently by different economist as such there are different types of socialism. But the common characteristics of socialism are the following.

1. Social ownership of means of production.

Socialism believes in the abolition of private ownership of means of production. Land, factories, railway, mines and every other means of production must be nationalized. Their ownership and control must be vested in the state so that the state may provide work for everyone and maintain economic equality.

2. Economic equality.

The socialism aims at the reducing economic inequality of income and wealth. Since industrial and business enterprises belong to the state, there is little possibility of amassing wealth by private individuals. The system therefore aims at giving a fair share to all in the national income.

Characteristics of Capitalism.

Capitalism is another form of economic system where all means of production are owned and controlled by private individuals for making profit. Under capitalism all farms, factories and other means of production are the property of private individuals. They use these properties in order to satisfy their self interest of earning profit. Some important features of capitalism are the following.

1. The right to private property.

The right to private property is the backbone for the existence of capitalism. Everybody has the right to acquire private property, keep and use it and after his death to pass it on his heirs. These private properties are used by the people for their own personal profit and not for the benefit of the society.

2. Freedom of enterprise.

A very outstanding feature of capitalistic order of society is the economic freedom. This freedom implies freedom of enterprise, freedom of contract and freedom to use one’s property. Everybody is free to take up any occupation that he likes or start any business he likes and enter into a contract or agreements with his fellow citizens in a manner most profitable to him.

Characteristics Feudalism

Feudalism is an economic system prevailed in Europe during the medieval period.

This system existed during the period from 5^th century to 12^th century. This system was based on land tenure. The two main features of this system were:

1. Castle.

The king lived in a fort and keep arms and weapons. This fort is known as castle. The king was responsible to protect the subjects from external invasion. The forts were enclosed with high walls and ditch. The court of lord also existed inside the castle.

2. Manor.

The entire land would be under the ownership of the king and he distributes the land to the people for cultivation. Each estate so distributed is known as a manor.

Characteristics of Mercantilism.

The mercantilism is an economic idea or thought prevailed in Europe during the period from 16^th to 18^th century. Some of main ideas of this thought are:

1. Fuller utilization of national resources.

The Mercantilist advocates the fuller utilization of a nation’s natural resources. The mercantilist believed that a nation’s wealth and prosperity is its stock of precious metals like Gold and Silver. The way of getting precious metal is enlarged production and its export to foreign countries. They believe that export will bring wealth to the nation and import cause loss of precarious metals. So they advocated for maximum production and its export and they were strictly against the import from foreign countries. If a country is rich in the stock of precious metal they would become economically and politically powerful. A country could attain more gold and silver when it export maximum and import minimum. So for getting more precious metals through export they advocate for fuller utilization of country’s resources.

2. Foreign trade.

The Mercantilist gave undue importance to foreign trade. They believed that a country’s strength is determined by the availability of gold and other precocious metals. The best way of getting this precious metal is to maximize export as possible. The value of export must be greater than the value of import. Thus the Mercantilist encouraged export and discouraged import.