What is the difference between socialism and welfare capitalism?

The main difference between socialism and welfare capitalism is that socialism is an economic system based on public ownership of the means of production, while welfare capitalism refers to the application of a welfare state to a capitalist economic system.

A welfare state is a form of government in which the state plays an important role in protecting and promoting the economic and social well-being of its citizens. Capitalism is an economic system in which a country's trade and industry are controlled by private owners for profit reasons.

Key areas covered

1. What is socialism - definition, characteristics 2. What is welfare capitalism - definition, characteristics 3. Difference between socialism and welfare capitalism - comparison of the main differences

key terms

Socialism, welfare capitalism

Difference Between Socialism and Welfare Capitalism - Comparative Summary

What is socialism

Socialism is an economic system in which everyone in society has equal access to the factors of production, ie entrepreneurship, natural resources, capital goods and labor. This type of public or state ownership is carried out by a democratically elected government . Furthermore, in a purely socialist economic system, everyone works for wealth, and wealth is evenly distributed among everyone. Furthermore, the underlying premise of a socialist economic system is: "What is good for one is good for all". In other words, it underscores the fact that everyone in society should have the right to decide how resources are used and consumed. Difference Between Socialism and Welfare Capitalism

Furthermore, in a strictly socialist economy, the government makes all production and distribution decisions (in terms of legality), and people depend on the state for everything, from food to health care. The government also determines the goods and services and their price level. It is also important to note that the system of socialism is in direct opposition to capitalism.

What is welfare capitalism

The term welfare capitalism has two meanings. It can refer either to the combination of a capitalist economic system with a welfare state or to private companies providing welfare-like services to workers. A welfare state is a form of government in which the state plays an important role in protecting and promoting the economic and social well-being of its citizens.

After Gustav von Schmoller, the German economist of the 19th Esping-Andersen classified three different welfare traditions: social democracy, Christian democracy and liberalism . Although these models or traditions are widely criticized, these are the most widely used models of welfare states. Regions like Western Europe, Canada, Scandinavia, Australia, and New Zealand are known for their welfare state benefits. Some other countries in the world also have elements of a welfare state such as universal health care.

The second meaning of welfare capitalism, that is, corporate-sponsored policies that assume that the private sector can offer social welfare programs, is also known as industrial paternalism. However, the benefits of these welfare programs are often inconsistent and vary from company to company. In addition, the concept of welfare capitalism is particularly widespread in the American context.

Difference Between Socialism and Welfare Capitalism

definition

Socialism is an economic system based on public ownership of the means of production, while welfare capitalism refers to the application of a welfare state to a capitalist economic system.

capitalism

Furthermore, socialism is in direct opposition to capitalism, while welfare capitalism is an attempt to reform capitalism in some aspects.

diploma

The main difference between socialism and welfare capitalism is that socialism is an economic system based on public ownership of the means of production, while welfare capitalism refers to the application of a welfare state to a capitalist economic system.

Reference:

1. "Welfare Capitalism". Wikipedia, Wikimedia Foundation, May 17, 2021, available here . 2. “16.1H: Social State Capitalism.” Social Sci LibreTexts, Libretexts, Dec. 16, 2020, available here .

Image courtesy:

1. “Socialism in Pictures” by Rcragun - Own work (CC BY 3.0) via Commons Wikimedia

About the author: Hasa

Hasa holds a BA in English, French and Translation Studies. She is currently reading for a Masters in English. Her areas of interest include literature, language, linguistics and also food.