Versus Capitalism

• Modern capitalism was defined by Adam Smith in his 1776 work "Inquiry into the Nature and Causes of the Wealth of Nations." Basically it is the philosophy that if each person follows their own, individual self interest it will serve the interests of society as a whole. In pure capitalism it is wealth, not government, that should control the means of production and government should play a very small role. Pure socialism believes that it is labor, not accumulated wealth, that is of the most value, and that the aims of society, and the achievement of those aims, should be controlled democratically and not out of pure self interest.
  
  

Regulation

• Prior to socialism, capitalism and markets were almost completely unregulated. Governments were largely concerned only with taxes, imports and exports. The birth of socialism coincided with the early labor movement and greatly influenced its aims. Even in countries that never really embraced socialism, it still had an impact in terms of labour unions and government regulation. This includes things like minimum wage laws, the 40-hour work week, child labor laws, workplace safety, consumer safety and pollution control.
  
  

Democratic Socialism

• In much of Western Europe governments have adopted various forms of what can be considered Democratic Socialism, or a mix of democratic, capitalist and socialist philosophies. In these countries there are free market, capitalist systems but they operate in a heavily regulated environment. Some systems, deemed essential, in these countries such as health care, education and energy are state controlled or a mix of state and private control and they feature a strong social safety net or welfare system that provides benefits for the poor. This mix is designed to let capitalism exist while still providing some level of economic equality.
  
  

Communism

• Communism is socialism taken to the extreme. In communist countries, such as the former USSR, the state controls every aspect of the economy and every business. This includes the labor force. While full employment is generally guaranteed, workers may not be able to choose their employer or profession. Communist countries also tend to have one party systems, with the elections consisting only of votes for members of the communist party.