ABSTRACT
This chapter describes socialist and capitalist economies onto the world scene, and provides the economic strengths and weaknesses of Socialism. Under Socialism, the primacy of social over private preferences is ensured by the entire political and ideological superstructure. Socialist leaders are convinced of the ascendancy of Socialism, particularly in the economic sphere. In the European Socialist countries, the idea that workers can successfully manage enterprises was dropped long ago. The directive and administrative methods of economic management are being replaced in the European Socialist countries with financial incentives and disincentives. As to the content of peaceful co-existence, Socialist leaders basically look upon it as 'peaceful competition' on the economic front and they have no doubt of the eventual victory of Socialism over capitalism. Some idealists believe that economic development based on essentially similar technological progress makes the coalescence of advanced Socialism and capitalism not only possible but also highly desirable, and indeed historically inevitable.
