Capitalism vs. Communism S. Todd

Capitalism vs. Communism Capitalism and communism are opposing schools of thought in economics and politics The central arguments in the communist/capitalist debate are about: Economic equality The role of government

Communism Communism believes economic inequality is bad for society and the government is responsible for reducing it via programs that benefit the poor. E.g. free public education, free or subsidized healthcare, social security for the elderly, higher taxes on the rich

Capitalism On the other hand, capitalists believe that government does not use economic resources as efficiently as private enterprise and therefore society is better off with the free market determining economic winners and losers

Definitions Capitalism -a theory or system of social organization based on the free market and privatization in which ownership is held by the individual persons Communism -system of social organization based on the holding of all property in common, with actual ownership held at the community or state level -rejection of free markets and extreme distrust of Capitalism in any form

Philosophy Capitalism -laissez-faire means to "let it be“ -opposed to government intervention in economics because capitalists believe it introduces inefficiencies -a free market produces the best economic outcome for society -government should not pick winners and losers Communism -from each according to his ability, to each according to his needs

Ideas Capitalism -capital is owned, operated, and traded for the purpose of generating profits for private owners or shareholders -emphasis on individual profit rather than on workers or society as a whole Communism -all people are the same and therefore classes make no sense -the government should own all means of production and land and also everything else -people should work for the government and the collective output should be redistributed equally

Religion Capitalism -freedom of religion permitted Communism -all religion/religious practices are abolished

Economics Capitalism -market-based economy combined with private or corporate ownership of the means of production -goods and services are produced to make a profit, and this profit is reinvested into the economy to fuel economic growth Communism -the means of production are held in common, negating the concept of ownership in capital goods -production is organized to provide for human needs directly without any use for money

Political System Capitalism -can coexist with a variety of political systems, including dictatorship, democratic republic, and direct democracy Communism -usually takes the form of totalitarianism (absolute control by the state or a government)

Social Structure Communism -all class distinctions are eliminated Capitalism -classes exist based on their relationship to the means of production: the ruling class, or "capitalists“ own shares of the means of production and derive their income in that way -in contrast, the working class is dependent on wages or salaries Communism -all class distinctions are eliminated

Private Property -private property is the dominant form of property Capitalism -private property is the dominant form of property -public property and state property play a secondary role Communism -abolished -the concept of property is negated and replaced with the concept of commons and ownership with "usership"

Examples Capitalism The modern world economy operates largely according to the principles of capitalism -the UK, US, and Hong Kong are mostly capitalist Communism -ideally, there is no leader; the people govern directly -this has never been actually practiced, and has just used a one-party system -examples of Communist states are the former Soviet Union (1991), Cuba and North Korea

Class split into four groups Pros of Capitalism Cons of Capitalism Pros of Communism Cons of Communism