Key Takeaways
Individual decisions on what to produce, how much to charge, and what to buy are informed by market prices that convey important information about scarcity and consumer value.
Proponents of capitalism argue that it delivers the best economic outcomes by giving individuals incentives to create and produce.
Critics of capitalism point to the persistence of poverty in market economies and rising inequality as proof that capitalism fails to deliver broad-based prosperity. These critics maintain that inequality ultimately gives the rich disproportionate economic and political power.
Proponents of socialism argue that the government choosing how to allocate scarce resources based upon what it determines to be most useful to society as a whole ensures that society’s resources are fairly distributed.
Which system is better for humanity? Debates on the question all too often devolve into name-calling and emotional arguments that fail to advance the discussion. The human prosperity project at the Hoover Institution seeks to overcome these preconceptions.
