Praxis Social Studies: Content Knowledge (5081) Practice Exam 2025 - Free Praxis Social Studies Practice Questions and Study Guide

Capitalism and Communism, while fundamentally different in their principles and implementations, both represent distinct economic systems. An economic system describes the method by which goods and services are produced, distributed, and consumed within a society.

In capitalism, the means of production are primarily owned and operated by private individuals or corporations, and economic decisions are driven by market forces. This system emphasizes competition, profit motives, and consumer choice.

In contrast, communism advocates for collective or state ownership of the means of production, aiming to eliminate social classes and promote an egalitarian society. Economic decisions in a communist system are planned by the government, with the intention of redistributing resources evenly among the population.

Both systems are drivers of economic organization, showcasing how societies manage resources, labor, and production, making "economic systems" the characteristic they share.