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Features of Capitalism:Main features of Capitalism are as follows:1. Private Property:Under capitalism, people have full right to use their own or private property in any manner they like and this right is protected by government. They can use the means of production like machine, tools, lands etc. in any manner. In case of death of owner of the property, his property passes to his successors. 2. Price Mechanism:Price mechanism is the guiding principle of capitalism. In Capitalism, price is determined by the forces of demand and supply. Government does not interfere in the fixation of price. Equilibrium between price and demand is brought through the process of price mechanism. 3. Freedom of Enterprise:In capitalism, every enterprise is free to choose any kind of business. He can take independent decisions with regard to what, where, how and when to produce. 4. Competition:-

In capitalism, freedom of enterprises leads to more and more competition, which ultimately results inefficiency of industrial units and production of goods at low costs. 5. Profit Motive:The only aim to start the business is to earn and maximize the profit in capitalism.

6. Sovereignty of the Consumer:Under this economic system, consumer is sovereign. Consumer buys only those things which give maximum satisfaction to them. 7. Labour as a commodity:In capitalism, labour acts as a commodity and can be bought and sold like any other commodity in the labour market. In some cases, exploitation of labour also takes place.

Merits of Capitalism:1. Rich Variety of Goods and Services:In Capitalism, different demands of the consumers are met through diversifying production. Different types of goods and services are produced in order to meet the demands of the consumers. 2. Proper use of Resources:-

The only aim is to earn profit and it is achieved through the optimum and proper use of resources. 3. Inducement to Work:Private ownership and law of succession induces the people to work more, under the capitalism so as to earn more income. 4. Efficient Production:In Capitalism, every firm tries to compete with one another by producing better quality products and lower prices. Modern and advanced techniques of production are adopted to achieve this aim. It results in efficient production.

5. Increase in the Standard of Living:More and more quality goods are produced at lower prices through different techniques of production. So this enables the poor people to purchase them at lower prices and consequently they can improve their standard of living. 6. Automatic:In capitalism, the balance between demand and supply is maintained automatically. If in any case, demand increases the supply, the new producers will enter the market and start producing that product and existing producers will increase its production.

7. Growth of Entrepreneurship:Various features of capitalism economy like private ownership, competition, profit motive induces the entrepreneurs to become more efficient, competent, hard working and dynamic. 8. Economic Freedom:In capitalism, everyone enjoys complete economic freedom. Everyone is free to use hisproperty in any manner he likes and there is no restriction on sale and purchase of goods and services. Demerits of Capitalism:1. Unequal Distribution of Wealth:The greatest demerit of the system is unequal distribution of wealth and income. This inequality is due to private property, less government interference, freedom of enterprise etc. These features of capitalism render rich more rich and poor more poor. 2. Class Struggle:On account of inequality of wealth and income, society under capitalism is divided into two classes. One the one hand, the rich and capitalist class leads a luxurious life and on the other hand, the labour class struggles hard to get even two square meals. 3. Exploitation of Labour:-

Another bane of capitalism is the exploitation of labour. Under capitalism labourers get wages which are less than their marginal productivity. 4. Wasteful Competition:Competition that is one of the distinctive features of capitalism is in reality quite wasteful. A producer spends thousands of rupees on advertisement to push the sale of his products. 5. Business Fluctuations and Unemployment:Automatic character of capitalistic economy is responsible for causing business fluctuations in it. The economy is afflicted with alternative cycles of boom and depression. In the boom phase there is considerable fall in production, income, employment and prices. 6. Disregard of Public Welfare:National resources are used by the entrepreneurs for the sake of personal profits. While fixing prices, private entrepreneurs ignore public welfare and consider only their personal profit. 7. Lack of Coordination:Due to lack of central planning, there is very little coordination in total production. Thus, some goods are produced in more than the required quantity while other goods fall short of the total requirement.

What are the features and merits of Socialism?

Characteristics of Socialism. We can define Socialism as a command economy with regulated price and no private property and where the Labor is given more importance and with central planning systems where What, How for whom to produce is decided by the government and non-existence of Consumer Sovereignty.

Now we will see the features of Socialism:

Command Economy: Central Planning and strict Bureaucracy is the main feature of Socialistic Economy. It directs all Political and Social Activities. Limited Role of Market. Generally the Market is determined by Demand and Supply and here as the Government decides the production allocation of resources it is having minimum role to play.

No private ownership of property or factors of production.

The government is the owner of all properties. Only a little Private property is allowed and no property rights, hereditary rights. Central Planning. The main feature of Socialism is central planning which decides the basic problems like a) what to produce? b) How to produce? c) For whom to produce? The Central Planning committee sets the goals for the economy and also his time frames within these goals are to be realized. Social Security and welfare: In a Socialistic Economy the government decides all economic decisions and sets the goal of the economic welfare and security of weaker sections of society and aged people.

Lesser Inequalities of income and economic opportunities. There are no inequalities in Socialism as the main aim of Socialism is in the interest of workers and the poor .

More Importance to the promotion of key and Heavy Industries. More importance is given to Key Industries and mega projects. Based on Russian Plans Chinese introduced in 1956 the Walking on two legs that is giving importance both the Agriculture and Industry. This had made the overall growth of Economy producing goods including wage goods.