Rob

A further point is that government control of investment is often short-sighted and politically motivated. The socialist country may gain a temporary advantage in one field, but the capitalist country will simply diversify and invest in new areas, perhaps more profitable than the original. The socialist country will be left with massive investment in a certain industry, but that investment becomes useless when that industry loses importance. In the meantime, the capitalist country has developed new markets and has improved their products due to fair competition. If the government could make the right decision about how to invest money every time, then I'd be a socialist. The fact is that it can't, and it more than likely will make worse choices than those determined by a free market. In this case, the socialist country is abandoning long-term growth for the short-term appearance of success and prosperity.