Capitalism vs.

Communism

"Capitalism and communism stand at opposite poles. Their essential difference is this:
The communist, seeing the rich man and his fine home, says: 'No man should have so much.' The
capitalist, seeing the same thing, says: 'All men should have as much.'" - said by Phelps Adams
(1975). For centuries, societies have tried to find the most effective system to govern a nation,
capitalism and communism are the two most famous economic and political ideologies with
different approaches to addressing common societal challenges such as poverty, crime,
unemployment, and warfare. These two systems have started lasting debates between proponents
of capitalism and communism as they compete with each other's strengths and weaknesses.
Despite some advocating that communism offers equitable wealth distribution and aims for the
creation a fairer society, promising a more solid and just economy, a thorough analysis shows
that its implementation has often resulted in devastation and the collapse of numerous countries
and republics. Through historical analysis, it becomes evident that by implementing capitalism
and the limited role of government that comes with it proves more advantageous for the growth
of a country and its marketplace compared to full control of entrepreneurship and capital goods.
Additionally, capitalism promotes equality, fairness, individual ownership, economic prosperity,
and enhances individuals' standard of living and freedom. Since capitalism and communism
cannot coexist, thus it is crucial for every society and nation to embrace capitalism and resist
going back to the dark ages of communism. Capitalism fosters healthier economic growth and a
better standard of living for individuals, while also promoting freedom. Although the concept of
a stateless, wage-less, moneyless, classless society where production meets everyone's needs
without profit or competition is enticing and are things some argue in favor of communism, it
still remains theoretical and impractical in reality, as economic freedom provided by capitalism
is crucial, favoring equality over equity and emphasizing a free market and foster innovation and
societal happiness.

Opponents argue that communism, with its focus on distributing resources according to work
within a system of public ownership of the means of production, aims to ensure equal
opportunity and optimize resource allocation, thereby fostering a more equitable society and
efficient allocation of resources (Zhang, 2023). Despite this, after decades of observing both
capitalist and communist countries, capitalism has proven to surpass communism, offering
numerous benefits and abundant opportunities for individuals within society, including wealth
generation, innovation promotion, and significant enhancements to quality of life (Redd, 2021).
In addition to the above, the capitalist economic system empowers the market to determine
resource allocation, allowing capital, labor, and natural resources to flow to where they can yield
the greatest impact (profit), thus enabling the economy to self-organize. While concerns may
arise regarding the ability of low-skilled individuals to sustain themselves or integrate into the
system, it is inherently unjust for individuals with disparate educational backgrounds and skill
levels, such as a doctor and a low-skilled laborer, to receive identical compensation and it is
unfair for individuals to be forced to financially support the livelihoods of others without their
will, reminiscent of communist principles (CFI Team, 2019). In a study published by Michael
Ray, he states "By some measures, the Soviet economy ranked as the world’s second largest in
1990, yet shortages of consumer goods were a routine occurrence, and hoarding was widespread,
thus underscoring the economic challenges inherent in communism” (Ray, 2023). Therefore, this
supports what many scholars already believed, that the full control of governing rules and the
lives of individuals by the communist governments often leads to corruption, negatively
affecting economic growth, and countries and economy thrive under free-market principles like
in capitalism.

Proponents of communism argue that strong social communities are established under this
system, ultimately if citizens follow the laws of communism, it fosters a harmonious spirit of
shared goals, leading to the transition to a stateless and classless society, as envisioned by Lenin
(Cowling, 2011). Furthermore, communist supporters claim that communism facilitates the
creation of conditions where everyone can develop freely, as articulated in the Communist
Manifesto. However, this ideal has never materialized, and instead, communism has often led to
greater division between social classes and many oligarchs (individuals with significant wealth
and influence) and powerful criminals by abusing the system, have emerged from communist
countries. Both "communist" China and "communist" Vietnam serve as examples, as they have
transitioned into societies where millionaires and billionaires thrive, becoming safe havens for
the steady accumulation of capital, thus ultimately creating larger divisions between classes
(Bregman, 2020). In addition, collectivist ideologies, which are often associated with
communism, may only be successful or attractive to individuals who still prioritize their own
individual goals and aspirations, even within a system that emphasizes collective welfare, thus
explaining what happened in China and Vietnam. Despite associations of capitalism with
disparities and the promotion of individualism, studies indicate that increase in working-class
power can have positive effects on capitalist-class interests, fostering conditions for positive
class compromise and ultimately contributing to increased happiness and empowerment within
local communities. Additionally, the exchange of goods and services in a capitalist system
creates interaction and cooperation among community members, strengthening social
connections (Wright, 2000). Thus, instead of subjecting ordinary people to exploitation and
reducing them to mere working classes, where some individuals may take advantage of them,
capitalism promotes economic collaboration, strengthens bonds within communities and foster
competition and diversity.

The final argument states that in order to eliminate wealth disparities, promote collective control
over resources, reduce potential for exploitation, and foster a more equitable society, communist
ideology is superior in the sense all economic resources are publicly owned and controlled by the
government (Hiley, 2018). In contrast, critics of communism argue that in order for individuals
or businesses to utilize their capital goods, a system must exist that protects their legal right to
own or transfer private property such as in capitalism, where contracts, fair dealings, and civil
law are used for this purpose. Conversely, when property is not privately owned but shared by
the public, a dilemma known as the tragedy of the commons can arise, where individuals
consume resources at the expense of society (Liberto, 2023). Moreover, the profit motive in
capitalism is the driving force of this system, which leads to competition, with companies aiming
to produce goods at the lowest cost to attract more customers. Hence, private ownership is often
deemed superior to communism's control over all property due to its ability to encourage
investment, promote productivity and respect individual autonomy, ultimately leading to a more
dynamic and flexible economy.

In conclusion, it becomes apparent that capitalism functions as the superior economic

system for production and resource allocation, differing from communism's centralized planning.
Capitalism relies on decentralized, competitive, and voluntary decision-making processes. It
prioritizes individual initiative and competition over equitable arrangements, distinguishing it
from communism. The capitalist economic system empowers the market and the competition
leading to lower consumer prices, while fostering a more efficient allocation of capital resources.
It is evident in capitalist countries that standards of living rise, fostering harmony among
individuals in society. Additionally, private property rights are protected, providing individuals
and businesses with assurance that they are shielded from unauthorized interference or
confiscation of their assets. Finally, capitalism has always emerged victorious over communism,
and the most famous evidence is noticed when the Soviet collapsed in 1991, signifying the
superiority of capitalist principles as the Cold War came to an end. Additionally, nations such as
China Vietnam underwent transformations from centrally controlled economies towards
adopting capitalist features step by step, resulting in rapid economic advancement.
Work cited:
1. Adams, P. (1975). "Capitalism and communism stand at opposite poles. Their essential
difference is this: The communist, seeing the rich man and his fine home, says: 'No man should
have so much.' The capitalist, seeing the same thing, says: 'All men should have as much.'"
Sourced from https://wist.info/author/adams-phelps/
2. Zhang, Z. (2023). Handbook of Chinese Economics. Sourced from
https://www.google.iq/books/edition/Handbook_of_Chinese_Economics/6gzJEAAAQBAJ?
hl=en&gbpv=0
3. Redd, I. (2021, June 21). Capitalism, the Greatest Economic System Ever. Sourced from
https://yipinstitute.org/article/capitalism-the-greatest-economic-system-ever
4. CFI Team. (2019). Capitalism. Sourced from
https://corporatefinanceinstitute.com/resources/economics/capitalism/
5. Ray, M. (2023, August 25). Why Did the Soviet Union Collapse? Encyclopedia Britannica.
https://www.britannica.com/story/why-did-the-soviet-union-collapse
6. Cowling, M. (2011). Would Communism Eliminate Crime? Sourced from
https://core.ac.uk/download/pdf/322325552.pdf
7. Bregman, A. (2020, December 4). China's billionaires set to dominate the world's art market.
Sourced from https://asia.nikkei.com/Opinion/China-s-billionaires-set-to-dominate-the-world-s-
art-market
8. Wright, E. O. (2000). Working-Class Power, Capitalist-Class Interests, and Class Compromise.
American Journal of Sociology, 105(4), 957-1002.
9. Hiley, S. (2018, January 4). Abolition of private property? Sourced from
https://www.cpusa.org/interact_cpusa/the-father-of/
10. Liberto, D. (2023). What Is Capitalism: Varieties, History, Pros & Cons, Socialism. Investopedia.
Sourced from https://www.investopedia.com/terms/c/capitalism.asp