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Under the socialist system all the factories, industries and means of production are the State property while in capitalist system these all belong to the private owners. The socialist system can have following advantages over the capital system.

1. Wealth is not concentrated in a few hands but whole society gets the benefits of the profits by equals distribution of wealth.

2. The workers and labourers are not forced to put in more work for less wages. Thus there is no exploitation of the workers.

3. In the socialist system of society the goods are produced according to the need of the society and not for the sake of profit only.

4. Socialism promises the fulfilment of the minimum necessities of life like food, cloth and shelter to all the people.

5. In the capitalist system the stress is laid to produce luxury goods while in the socialist system such goods are produced as are necessities for daily use which promote better life of all the sections of society.

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(Imp.)