The four factors are entrepreneurship, capital goods, natural resources, and labor. At the same time the pace of development has been accelerated by allowing the private sector to function in a number of areas. As is clear from the features mentioned above, the capitalist system is essentially characterised by the absence of a central plan. It is very difficult to realise the avowed virtues of a free enterprise economy in the real world. Lenin believed, as he argued in his book What is to be Done? 4. However, the private sector is given positive support for growth and development in the areas in which it is expected to function. There is no scope for competition. It has been aptly remarked that socialism is a cap that has lost its shape because so many different people have worn it. Some believe that the government should own most of the property and natural resources, while others believe that small businesses should be owned privately. The concept of capitalism is explained as presented below: According to Gary M. Pickersgill and Joyce E. Pickersgill, “The capitalist system is one characterised by the private ownership of the means of production, individual decision making, and the use of the market mechanism to carry out the decisions of individual participants and facilitate the flow of goods and services in markets.”, According to Loucks and Hoots, “Capitalism is a system of economic organisation featured by the private ownership and the use for private profile of man-made and nature-made capital.”, In the words of D.M. Whichever, they consider fit for the progress of society. 7. Control on Monopolistic Activities- In a mixed economy, both public and private sector co-exist and the private sector gets the opportunity to develop. This is easier to see by looking at businesses. Socialism has become a very appealing and flexible concept. Thus, various forms of socialist ideals have developed. It creates imbalances in the standard of living also. A number of other types also emerged but all of them came close to any one of the above three types of economic systems. Competition reduces market imperfections and associated problems. The definition of socialism varies widely, and many people use it synonymously for communism, but it it is often distinguished as an economic system between communism and capitalism. This simple observation lays at the foundation of capitalism. Invest for maximum results with a minimum of risk. In communist countries like the USSR and China, the means of production are mostly owned by the state. Since there is governmental control over means of production, government has a hand in the matter of the kind of product to be produced, the quantity to be produced and determination of its price. They neglect the social interest. Even when the board of directors decides to get rid of a bad CEO, many of those CEOs walk away with millions of dollars of severance pay. It is the reason why people work in their own interest. In one part are the industries, the responsibility for the development of which is entrusted to the state and they are owned and managed by the state. 3. Socialism in the modern world has yielded to the 3rd way, a center-left position committed to the socialists' objective of equality and welfare for the masses, but abandoning class-based politics and public ownership of production. Consumers’ sovereignty means freedom of choice on the part of every consumer. For instance, in the United States, working income is taxed at a higher rate than either investment income or inherited income, income that accrues mostly to the wealthy. It has been reported periodically that Vladimir Putin is the richest man in the world, so, in Russia at least, it is Putin and his cronies who are benefiting from communism while it is the poor who are creating the wealth that the leaders transfer to themselves. But because the government is not collecting this money from the wealthy, then it must collect the money from someone else, usually from the lower classes, for which money has a much higher utility, since they need the money to live. Resource allocation under pure capitalism will not, therefore, be optimal. This is not to say that there have not been distortions or improper developments. Capitalism works best because it promotes competition so that only the most efficient businesses survive. From the above definitions it may be concluded that capitalist system is known as free enterprise economy and market economy. At the very early stage of development this system was found suitable but later on, its principles went on diminishing. Thus, capitalism provides the best means of achieving the efficient allocation of the factors of production and providing society with the goods and services that it most desires at the lowest possible cost. Tony Blair of the British Labour Party promoted this 3rd way in 1995. The Indian economy is a mixed economy characterised by the co-existence of private, public, joint and cooperative sectors and cottage, tiny, small, medium and large industries. Even in the United States, lobbyists continually try to influence Congress and the president to pass laws in their favor, which is always at the expense of everyone else. Imbalance in the Economy- The mixed economy cannot provide proper development as the government wants to maintain a balance between the private and public sector. 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