Mechanical Engineer, Diploma in Mechanical Engineering, Atlanta, Georgia
Answered on Oct 08, 2019
Capitalism and laissez-faire are both economic systems. There is no big difference between the two. Capitalism is an economic system that is based on private or corporate property rights, and it also includes the private ownership of resources. By definition, it shows that the means of production will be determined by private individuals. The government does not have so much control over the system. Laissez-faire, on the other hand, is also similar to capitalism just that government involvement or interference is absent.
There is no policy of the government on the economic system. In laissez-faire, you determine your own minimum wage. Both capitalism and laissez-faire consider any government policy or regulation as a big threat to their businesses. The major difference between the two economic systems is that capitalism may experience the interference of the government, while in laissez-faire, the system is left completely to private individuals.
With capitalism, almost all wealth is privately owned. There is little or no state involvement in market exchanges, creations, and transactions. Corporations regulate Production, distribution, and management of wealth. The purest form of capitalism is the free market. With laissez-faire, the person is the fundamental element of society and has supremacy over the community.
There is no minimum wage, no taxation, and no regulation of any kind. Followers of laissez-faire believe that state involvement hinders productivity and eradicates personal freedoms which are enjoyed within this particular form of government. With laissez-faire, the government should only intercede in the economic market.
Capitalism is a economy system that is known to be considered a greedy type of way of making money. It means that the businesses are mostly privately owned and they are not run by the government. There is very little if any interference from the government. The private businesses make their transactions and determine how and how much they will sell their goods and services for.
There are many similarities between capitalism and laissez faire. However, there are some differences in that the laissez-faire method has more freedom than capitalism. There is no taxing in the laissez-faire. The government will intervene if there are problems. Otherwise, the government is never involved in the matters of the companies in this type of system.