It is critical to recognize that capitalism and socialism are economic systems that countries

employ to manage their economic resources and govern their production methods. In light of
the aforementioned, this academic paper will critically discuss the Socialist and Capitalist
approaches to development. The paper will further state the approach which is best suited for
Zambia’s development with supporting evidence.

Sachs (1992) defines Development as “a process that promotes growth, advancement, good
change, or the addition of physical, economic, environmental, social, and demographic
components.”

As explained by Scott (2011), the capitalist approach to growth is characterized by private

ownership of property and means of production, little state control over economic businesses,
and a free market governed by competition. The developmental approach likewise
emphasizes long-term expansion and modernization, as well as large-scale government
investment in the start. "Economic development would revolve around industrialization and
the transfer of an underemployed rural labor force to more productive employment in the
urban industrial sector," according to this viewpoint. To finance a program of guided
industrial growth, the government would have to collect local and international savings to
create an investment pool."

Meyer (2013) states that the socialist approach to development is founded on public
ownership of the means of production (also known as collective or common ownership). The
machinery, tools, and factories used to generate things that directly satisfy human wants are
examples of these means.

Governments play a minor influence in determining what to create, how much to produce,
and when to produce it in capitalist economies, leaving the cost of goods and services to
market forces. Entrepreneurs rush in to fill voids in the marketplace when they see them
(Meyer, 2013).

According to Kotler (2015), capitalism is founded on a free-market economy, which means

that goods and services are distributed according to supply and demand laws. According to
the law of demand, higher demand for a product leads to an increase in its price. Growing
output is usually accompanied by signs of increased demand. The increased supply helps to
level prices so that only the most powerful rivals survive. Competitors aim to make the
greatest money possible by selling their products for as much as possible while keeping costs
low. The free operation of capital markets is also an element of capitalism. Fair pricing for

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stocks, bonds, derivatives, currencies, and commodities are determined by supply and
demand.

Important economic decisions in socialist economies are neither left to the markets or chosen
by self-interested individuals, according to Gaus & Kukathas (2004). Instead, the
government, which owns or controls a large portion of the economy's resources, determines
what, when, and how production takes place. This method is also known as central planning.
Meyer (2013), a proponent of socialism, claims that shared resource ownership and the
impact of central planning allow for a more equitable distribution of commodities and
services and a more just society.

Lebowitz (2003) argued that people in capitalist economies, according to, have tremendous
incentives to work hard, increase efficiency, and generate superior products. The market
maximizes economic progress and individual prosperity while providing a diverse range of
goods and services for consumers by rewarding inventiveness and innovation. The
marketplace self-regulates by stimulating the creation of desired goods and services while
discouraging the development of unwanted or superfluous ones, leaving less room for
government intervention and mismanagement.

Scott (2011) contends that the socialist approach to development appears to be more humane,
yet it has flaws. One drawback is that people have fewer goals to aim for and feel less linked
to the results of their labors. They have fewer incentives to innovate and boost efficiency
because their basic requirements are met. As a result, the economic growth engines have
weakened. Furthermore, government planners and planning institutions are neither infallible
nor impervious to corruption. Even the most basic products are in low supply in certain
communist economies. Because no free market exists to facilitate modifications, the system
may not be able to regulate itself as quickly or as successfully.

It is critical to recognize that under socialism, everyone is on an equal footing. In practice,

hierarchies arise, with party officials and well-connected individuals gaining preferential
access to favored products. Formal economies function within the confines of policies and
regulations that have been established and are closely monitored. Formal economies include
capitalism and socialism (Meyer, 2013). The fundamental distinctions between capitalism
and socialism, according to Scott (2011), lie upon the role of the government and economic
equality. Economic freedom, consumer choice, and economic progress are all benefits of
capitalism. Socialism, which is defined as a state-controlled economy that is regulated by a
central planning authority, increases social welfare and reduces commercial fluctuations.
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Property rights and production control are the functional differences between socialism and
free-market capitalism. Private individuals and businesses possess the means of production
and the right to profit from them in a capitalist economy; private property rights are taken
very seriously and apply to almost everything. The government owns and controls the means
of production in a totally socialist economy; personal property is occasionally permitted, but
only in the form of consumer goods (Kotler, 2015).

Public officials regulate producers, consumers, savers, borrowers, and investors in a socialist
economy by taking over and regulating trade, capital flow, and other resources. Trade is
performed on a voluntary, or unregulated, basis in a free-market economy (Kotler, 2015).

Scott (2006) points out that under socialist economies, production and distribution are driven
by either the government or worker cooperatives. Although consumption is restricted, it is
still largely in the hands of people. The government decides how primary resources are used
and levies taxes to fund redistributive initiatives. Many private economic actions, such as
arbitrage or leverage, are considered irrational by socialist economists since they do not
generate immediate consumption or "use."

According to Lebowitz (2003), one of the implications of a Capitalist approach to

development is that it creates competition between countries and perpetuates poverty among
emerging nations due to private firms' own interests rather than the needs of their workers. As
a result, these organizations tend to prioritize wealth preservation, thus they only pay people
who work for them or have a lot of money. As a result, certain countries see increased rates
of poverty and unemployment, which has a severe influence on their economy, environment,
and population. Furthermore, most countries' current capitalism norm involves evading
environmental restrictions, underpaying workers, and subjecting them to unjust working
conditions.

The capitalist approach to development looks to be ideal for Zambia's growth since, when
properly implemented, capitalism may genuinely enhance Zambia's economy. Katotobwe's
(2006) statement that it can truly help the government create money for the country backs this
up. Attracting and retaining both domestic and international investors can provide fertile
ground for the development of industries or multinational corporations that will employ the
bulk of the country's population. In the long run, income distribution will become more
equitable. However, in order for this to happen, the government must protect the interests of
the rest of the population. And, in order to bear fruit, practice capitalism as it should be.

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In a Capitalist based society political liberty is aided by economic liberty. When governments
control the means of production and set prices, they usually result in a powerful state with a
vast bureaucracy that can spread to other aspects of life (Katotobwe, 2006). In a capitalist
system, businesses are compelled to be efficient and produce things that are in high demand.
These incentives put pressure on companies to minimize expenses and eliminate waste. State-
owned businesses are frequently inefficient (for example, they are less inclined to let go of
surplus personnel and have fewer incentives to try out new innovative working practices)
(Ibid, 2006).

An atmosphere of innovation and economic progress is created in a capitalist economy where

enterprises and individuals are rewarded for being innovative and hardworking. This
contributes to higher real GDP and higher living standards. This increasing money allows for
a higher standard of living; in theory, this increased wealth benefits everyone, and there is a
'trickle-down effect' from rich to poor (Kotler, 2015).

Capitalism is good for emerging countries like Zambia since it benefits the poor “writes Scott
(2011).” It recognizes the dignity and worth of individuals and provides all people, including
the powerless and destitute, with a field of action that is free from outside influence (Ibid).

According to Scott (2011), suitable capitalist institutions are the sources of economic growth,
and economic growth is the only way to maintain per capita gains in the commodities and
services required to raise everyone's standard of living. Most capitalist civilizations have
fostered both explicit and implicit appreciation of individual value throughout history.

To summarize, a Socialist approach to development is based on the public ownership of

productive assets. In a socialist economy, the government makes all legal production and
distribution choices. The government also sets all output and pricing levels, as well as
providing everything from food to healthcare to its residents. A Capitalist approach is
opposed to a Socialist approach since it believes in private ownership and seeks to maximize
profits. The capitalist approach to development looks to be a good fit for developing
countries like Zambia because it recognizes the right to self-ownership, which respects
human dignity. The spread of the right of self-ownership to all members of society is a vital
feature of wealth-producing capitalism. The poor have only had property, including the right
to claim the results of their labor, at the discretion of the powerful for most of human history.
They did not own anything, not even themselves, for all intents and purposes. Capitalism
provides dignity to the poor by presuming individual autonomy. Capitalism provides the poor

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with the means to better their own well-being by supporting people's entitlement to their own
labor, regardless of their economic status.

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 REFERENCES
Gaus, G. F. & Kukathas, C. (2004). Handbook of Political Theory. Thousand Oaks,
California: Sage.
Katotobwe, C. (2006). Zambia: Capitalism a Means to Development. 14 APRIL 2006 The
Post (Lusaka) column.
Kotler, P. (2015). Confronting Capitalism: Real Solutions for a Troubled Economic System.
New York: AMACOM.
Lebowitz, M. A. (2003). Beyond Capital, Marx's Political Economy of the Working Class.
London: Palgrave.
Meyer, T. (2013). The Theory of Social Democracy. Hoboken, New Jersey: Wiley.
Sachs, W. (1992). The Development Dictionary: A Guide to Knowledge as Power. London:
Zed Books.
Scott, B.R. (2006). "The Political Economy of Capitalism. (pdf)" Harvard Business School
Working Paper, No. 07-037, December 2006.
Scott, B.R. (2011). Capitalism Its Origins and Evolution as a System of Governance. New
York: Springer.