Since the beginning of time there have been opposing ideas on how a nation should be run and the importance of involvement of the government in everyday life. Capitalism and Socialism are two of the most important economic systems that have defined much of the world. Capitalism and Socialism are two individual ideas that are rooted in the worlds economics that have influenced the way the world has functioned. Capitalism, also known as the free market, is the idea that private companies control the country through trade, profits and industry rather than individuals where the whole system is devoted to bettering the people. On the other hand, Socialism is based around equality for all through major government control to keep all resources even.
The idea of Capitalism came about following the Protestant Reformation when the tight restrictions against money started to disappear. Prior to the reformation, the catholic church found money to be similar to that of a sin. Though as the importance of trade grew, the importance of wealth did too. Another factor that allowed for capitalism to prosper was the growth of Europe’s precious metal supply. These goods led to higher prices on items, but wages could not keep up with the rapidly increasing prices, thus the private companies running the game were able to prosper. Then came joint-stock companies which were companies that were endorsed by investors to fund ventures to bring back desirable goods. Next, the industrial revolution brought the major growth of the free market and rise of wealth and hierarchy. The father of economics, Adam Smith, discussed a whole lot about the practices and ideas of capitalism in his book “On the Wealth of Nations”. Smith was not fond of the way the French government involved themselves in free trade and he wanted something that would operate totally different and benefit those who acted in self-interest. He thought some form of Laissez-faire government would work the best with a division of labor and wealth creation.
Socialism did not come about until after Capitalism had been successfully implemented in various governments. The founders of Socialism felt as though it would benefit the people if the market control was shifted towards the state rather than those wealthy private companies who controlled what was known as the free market. Many believed that the laborers were being treated poorly and being exploited for their work with little return. Henri de Saint-Simon found this to be wrong and he dreamed of a society that was run as a large individual factory. Before he could make this ideal society, he passed away. Although his loyal followers.