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Capitalism versus Communism comparison chart
Edit this comparison chartCapitalismCommunism
Philosophy Capital (or the "means of production") is owned, operated, and traded in order to generate profits for private owners or shareholders. Emphasis on individual profit rather than on workers or society as a whole. No restriction on who may own capital. From each according to his ability, to each according to his needs. Free-access to the articles of consumption is made possible by advances in technology that allow for super-abundance.
Ideas 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. 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.
Key Elements Competition for ownership of capital drives economic activity & creates a price system that determines resource allocation; profits are reinvested in the economy. "Production for profit": useful goods and services are a byproduct of pursuing profit. Centralized government, planned economy, dictatorship of the "proletariat", common ownership of the tools of production, no private property. equality between genders and all people, international focus. Usually anti-democratic with a 1-party system.
Key Proponents Richard Cantillon, Adam Smith, David Ricardo, Frédéric Bastiat, Ludwig von Mises, Fredrich A. Hayek, Murray N. Rothbard, Ayn Rand, Milton Friedman. Karl Marx, Friedrich Engels, Peter Kropotkin, Rosa Luxemburg, Vladimir Lenin, Emma Goldman, Leon Trotsky, Joseph Stalin, Ho Chi Minh, Mao Zedong, Josip Broz Tito, Enver Hoxha, Che Guevara, Fidel Castro.
Political System Can coexist with a variety of political systems, including dictatorship, democratic republic, anarchism, and direct democracy. Most capitalists advocate a democratic republic. A communist society is stateless, classless and governed directly by the people. This, however, has never been achieved. In practice, they have been totalitarian in nature, with a central party governing society.
Definition A theory or system of social organization based around a free market and privatization in which ownership is ascribed to the individual persons. Voluntary co-ownership is also permitted. International theory or system of social organization based on the holding of all property in common, with actual ownership ascribed to the community or state. Rejection of free markets and extreme distrust of Capitalism in any form.
Social Structure Classes exist based on their relationship to capital: the capitalists own shares of the means of production and derive their income in that way while the working class is dependent on wages or salaries. Large degree of mobility between the classes. All class distinctions are eliminated. A society in which everyone is both the owners of the means of production and their own employees.
Religion Freedom of religion. Abolished - all religious and metaphysics is rejected. Engels and Lenin agreed that religion was a drug or “spiritual booze” and must be combated. To them, atheism put into practice meant a “forcible overthrow of all existing social conditions.
Free Choice All individuals make decisions for themselves. People will make the best decisions because they must live with the consequences of their actions. Freedom of choice allows consumers to drive the economy. Either the collective "vote" or the state's rulers make economic and political decisions for everyone else. In practice, rallies, force, propaganda etc. are used by the rulers to control the populace.
Private Property Private property in capital and other goods is the dominant form of property. Public property and state property play a secondary role, and there might also be some collective property in the economy. Abolished. The concept of property is negated and replaced with the concept of commons and ownership with "usership".
Economic System 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. 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. Communism is predicated upon a condition of material abundance.
Discrimination Government does not discriminate based on race, color, or other arbitrary classification. Under state capitalism (unlike free-market capitalism), government may have policies that, intentionally or not, favor the capitalist class over workers. In theory, all members of the state are considered equal to one another.
Economic Coordination Relies principally on markets to determine investment, production, and distribution decisions. Markets may be free-markets, regulated-markets, or may be combined with a degree of state-directed economic planning or planning within private companies. Economic planning coordinates all decisions regarding investment, production and resource allocation. Planning is done in terms of physical units instead of money.
Political Movements Classical liberalism, social liberalism, libertarianism, neo-liberalism, modern social-democracy, and anarcho-capitalism. Marxist Communism, Leninism and Marxism–Leninism, Stalinism, Trotskyism, Maoism, Dengism, Prachanda Path, Hoxhaism, Titoism, Eurocommunism, Luxemburgism, Council communism, Left-Communism.
Examples The modern world economy operates largely according to the principles of capitalism. The UK, US, and Hong Kong are mostly capitalist. Singapore is an example of state capitalism. Ideally, there is no leader; the people govern directly. This has never been actually practiced, and has just used a one-party system. Examples 0f Communist states are the erstwhile Soviet Union, Cuba and North Korea.
Ownership Structure The means of production are privately-owned and operated for a private profit. This drives incentives for producers to engage in economic activity. Firms can be owned by individuals, worker co-ops, or shareholders. The means of production are commonly-owned, meaning no entity or individual owns productive property. Importance is ascribed to "usership" over "ownership".
Variations Free-market capitalism (also known as laissez-faire capitalism), state capitalism (also known as neo-mercantilism). Left Anarchism, Council Communism, European Communism, Juche Communism, Marxism, National Communism, Pre-Marxist Communism, Primitive Communism, Religious Communism, International Communism.
Way of Change Fast change within the system. In theory, consumer demand is what drives production choices. Government can change the rules of conduct and/or business practices through regulation or ease of regulations. Government in a Communist-state is the agent of change rather than any market or desire on the part of consumers. Change by government can be swift or slow, depending on change in ideology or even whim.
View of war War, although good for select industries, is bad for the economy as a whole. It wastefully diverts resources away from producing that which would raise consumers' standard of living (i.e., that which is demanded by consumers), toward destruction. Communists believe that war is good for the economy by spurring production, but should be avoided.
Means of control Capitalism promotes a "society of contract" as opposed to a "society of status." Production decisions are driven by consumer demand and resource allocation is driven by a price system arising from competition for profit. Theoretically there is no state control.
Earliest Remnants The ideas of trade, buying, selling, and such have been around since civilization. Free-market, or lasseiz-faire capitalism was brought to the world during the 18th century by John Locke and Adam Smith, aiming for an alternative to feudalism. Theorized by Karl Marx and Frederick Engels in the mid-19th century as an alternative to capitalism and feudalism, communism was not tried out until after the revolution in Russia in the early 1910s.
View of the world Capitalists see capitalistic and market-based societies as beacons of freedom, priding themselves on permitting social and economic freedoms not experienced under Communism and Fascism. The focus is on individualism as opposed to nationalism. Communism is an international movement; Communists in one country see themselves in solidarity with Communists in other countries. Communists distrust Nationalistic nations and leaders. Communists strongly distrust "big business."

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