There are six characteristics on the basis of which capitalism and socialism can be differentiated. Firstly, in capitalism ownership of means of production are privately owned while in socialism it is publicly owned. Secondly, there are no limitations in the accumulation of private property in capitalism while there are limitations in socialism. Thirdly there are no or fewer government regulations of the economy while there are higher government regulations in socialism. Fourthly, government management of economy in capitalism is less as compare to socialism. In addition, the welfare system is more established in socialism as compare to capitalism.
