Compare and Contrast Between Capitalism and Communism

Compare and Contrast Between Capitalism and Communism

Capitalism and communism are prevailing socio-economic philosophies in the modern world. In a communist society, all the members of the community own the property and participate in the production of goods and services. Capitalism is a social and economic philosophy that allows private owners to control the country’s industrial and trade activities rather than the government. Capitalism and communism are two different economic and political ideologies that differ in regard to means of production and distribution of resources.

Capitalism advocates for private ownership of property, unlike communism that gives the government full control of the country’s economic activities. In capitalism, all business activities in a country are owned by a few private investors (Cohen, 2017).Also, factories and industries are owned by private investors rather than the government. Since capitalism advocates for private ownership, the business owners decide on the means of production that they should adopt in their businesses. Also, the decision on what to produce and when to produce lies in the hands of the capitalists in a capitalist community. Capitalists tend to exploit their workers while maximizing profits. Capitalism hence widens the gap between the rich and the poor because private ownership is motivated greed rather than quality.

In the 19th century, Karl Max developed the concept of communism to mitigate the disadvantages of the capitalist socio-economic system (Gates-White & Thornhill, 2016).The communist philosophy allows people to own and control the means of production. In the name of the people, the communism concept enables the government to own and control the country’s trading and industrial activities. Since the government owns the property in a communist economy, the rights of the workers are protected, unlike in the case of the capitalist economy. Unlike capitalism, communism eliminates the disparity between the rich and the poor and promotes economic equality in society.

In a communist economy, the profits from production are equally shared among the community members. The state controls the means of production rather than individuals in a communist economy (Lane, 2018). Therefore, communism is a state-owned economy, which evenly divides the production gains among the state members. Contrary, in a capitalist economy, the profits belong to the capitalists. The means of production are controlled by private owners in a capitalist economy. Therefore, capitalism is an individual-owned economy where the benefits belong to private owners. Capitalism concept advocates for free competition without interference from the government. Capitalists believe that only the deserving producers win the market. As a result, unfair strategies can be utilized by some business owners in the capitalist economy to win the market, which may result in sub-standard goods and services. On the other hand, the government controls how businesses compete in the market in a communist society, which avoids instances of poor-quality products and services. In a capitalist economy, the price points are set by the capitalists, which may result in consumer exploitation. Contrary, the price structure is set and controlled by the government in the communist economy, which protects consumer rights. In a communist economy, society is more powerful than individuals, unlike in the capitalist economy, where few individuals control the country’s economic activities.

In conclusion, the capitalist economy encourages individuals to own and control means of production. Communism allows the government to own and control the country’s means of production. In a communist economy, profits are shared equally among the members, unlike in capitalism, where the profits belong to the private owners. Private ownership is motivated by greed, unlike in communism, where the state-ownership is encouraged by economic equality.

 

 

References

Cohen, G. A. (2017). Capitalism, freedom, and the proletariat. In Liberty Reader (pp. 163-182).   Routledge.

Gates-White, K., & Thornhill, C. (2016). Karl Marx: The Father of Communism.

Lane, D. (2018). Divergent social and economic consequences of transformation in post-   communist states. In Crises in the Post‐Soviet Space (pp. 39-59). Routledge.