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Essay on Capitalism and Communism

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Published: Mar 13, 2024

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Role of government, distribution of wealth, impact on society and economy.

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Communism and Capitalism Through the History Essay

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Introduction

Revolution of social darwinism.

During the modern history, there existed two main economic systems, namely: communism and capitalism. Their ideologies are intrinsically divergent and often unreceptive to each other. All over the hostilities defame and institutional propaganda has become extensive known creating worry and hatred between communist and capitalist.

Capitalism is defined as the economic system based on free trade where private sectors are allowed to do businesses with another individual or group of private citizens. In this system, the means of product and service production is mainly carried out and owned by the individuals instead of the government while communism also known as fascism is contrary to this where production and distribution of products is carried out by the state as non-profit organization.

The book “The Time Machine” is mainly a social appraisal of H.G. Wells who was a Victorian England predicted into a far future. The largest part of his life he remained a socialist with communist background and he argued in most of his books that capitalism was a major challenge to the post-modern future.

Fast development in technology, social life, education and other capitals had commenced the industrial Revolution in during 17 th and 18 th century. Additionally, he argued that by the late 19 th century of “The Time Traveler” the UK was most powerful with the economy whereas industrialists were enjoying their absolute wealth.

The capitalists during this era overworked men, women and even young children who were forced to work overtime with penny wages in dirty, smoke-filled industries. After observing all this as it took place, Wells decided to incorporate various scientific, natural and social ideologies in his arguments against capitalism and he majored on the citizens who were selective, discriminatory for their personal gain as they continued to exploit the poor and vulnerable members of the society (Wells 47 ).

First of all, Wells characterized capitalism as a revolution of social Darwinism. In this theory “Origin of Species”, the author Charles Darwin argued that nature allowed the reproduction of species that their characters fitted for best survival.

Therefore, social Darwinism was formulated by the British Philosopher Herbert Spencer whom regularly misrepresented this idea of natural fitness to validate 19th century social stratification among wealthy and unfortunate people. Wells contradicted with this philosopher where he argued that it did not imply that surviving species on an environment and the best but simply fit for their precise environment (Wells 83).

It is therefore concluded that evolution does not guide into perfectibility but to the maximum adaptability of a species. Communism was therefore aggravated mainly by the pessimistic impact of the industrial revolution on poor industrial employees. It was aimed at creating a social class of public common ownership where they believed that the society in general was more important than personal rights liberty and individual’s freedom.

On the other hand, as the communist fought hard against the capitalist, there were negative impacts that were associated with it where most dictators erupted as the results of communism for they were overall decision makers. For communism to work out, it relies on human nature where they need to be completely humane and ready to work for gaining of their neighbors (Wells 94).

Capitalism has the major economic system which takes control of the world economy and it has proved to be perfect enough comparing to the other economies such as socialism. It is characterized by its mode of production where prime resources such as capital and land are owned by the individuals.

Trade activities are fully controlled by the interaction between customers and sellers in the market and the owners here is free to make maximum profit from their resources. The main objective of a capitalist state is to secure concurrent high employment and stable prices (Wells 58).

During late 19 th century, wars uprising and economic despair has acted against capitalism. The great depression period has acted as the most challenging moment within the capitalism history where shares in the stock market depreciated at an alarming rate. Capitalism on its sides is referred to as the best economic friend for it freely allows for global competitive market and capitalist contributes a lot to the economy of a nation.

There are two types of capitalism which are commonly known, of which one of them is the proprietary capitalism. During this period of capitalism, there were only some corporations and no one could relate them to the modern society. The other form of capitalism is progressive capitalist economy.

In this type of capitalism, business outputs are present as inputs of the future. Even though capitalism has gone through transitional changes all over the years, capitalistic economy structure has remained to be most influential economy as well as the political structure in the world.

Finally, communism and capitalism has acted towards the economic development but several challenges have affected both economies. The communism has greatly affected it people where personal growth has been affected by national ideology of togetherness dragging back both economic and infrastructure development. On the other hand, capitalism has lead to emergence of life standards where it exists rich and the poor resulting to the exploitation of the vulnerable members of the society.

Wells, H. George. The Time Machine. Penguin Classics, 2007. Print.

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Essay Capitalism vs Communism

Understanding the Cold War: What is the difference between capitalism and communism?

The Cold War, a period of political tension and military rivalry that lasted from the end of World War II until the early 1990s, was more than a geopolitical struggle between the Soviet Union and the United States.

At its core, it was a battle of ideologies, a clash between two fundamentally different visions of how society should be organized, governed, and economically structured.

On one side stood communism, a system that sought to eliminate social classes and promote collective ownership, as championed by the Soviet Union and its allies.

On the other side was capitalism, a system that emphasized individual entrepreneurship and free markets, as embodied by the United States and the Western world.

The basics of communism

Communism, as a political and economic ideology, seeks to create a classless society where the means of production are owned collectively.

Rooted in the works of Karl Marx and Friedrich Engels, communism emphasizes equality and the distribution of wealth according to need.

In a communist system, there is no private ownership of capital goods, and the state often plays a central role in planning and controlling the economy.

During the Cold War, the Soviet Union was the most prominent example of a communist state, and its policies and practices were often seen as the embodiment of this ideology.

The basics of capitalism

In contrast, capitalism is an economic system that emphasizes private ownership and the free market.

Under capitalism, individuals and businesses own the means of production and operate for profit.

The distribution of resources is determined by supply and demand, and prices are set by competition in the marketplace.

Governments may intervene to some extent, but they generally allow the market to function with minimal interference.

The United States, during the Cold War, stood as a symbol of capitalist ideals, promoting free trade, individual entrepreneurship, and economic freedom.

Why were they in conflict?

The ideological divide between communism and capitalism during the Cold War was profound and often irreconcilable.

While communism sought to eradicate social classes and promote collective welfare, capitalism emphasized individual initiative and personal gain.

The communist belief in state control contrasted sharply with the capitalist faith in market forces.

In the political arena, these differences often translated into opposing views on democracy, human rights, and governance.

Communist states tended to favor centralized control and one-party rule, while capitalist countries generally supported multiparty systems and democratic principles.

Economic differences

In the communist economic model, the state plays a central role in planning and controlling the economy.

The means of production, including factories, land, and resources, are owned collectively, and the government often sets production goals, prices, and distribution methods.

During the Cold War, the Soviet Union's command economy was the most prominent example of this approach.

Centralized planning aimed to meet the collective needs of the population, but it often led to inefficiencies, shortages, and a lack of innovation.

Contrary to the centralized planning of communism, capitalist economies rely on the free market to determine production, distribution, and pricing.

Private ownership and competition are the driving forces, and governments typically intervene only to regulate or correct market failures.

During the Cold War, the United States and Western Europe championed this model, promoting free trade, open markets, and individual entrepreneurship.

The ideological divide between communism and capitalism had far-reaching effects on global economics during the Cold War.

The world was often split into two economic spheres, with the Soviet-led Eastern Bloc and the U.S.-led Western Bloc engaging in separate trade agreements, financial systems, and development strategies.

This division extended to developing countries, where the superpowers vied for influence by promoting their respective economic models.

The Non-Aligned Movement, comprising countries that did not formally align with either bloc, sought to navigate this complex landscape, often adopting mixed economic approaches.

Differences in government structures

Communist political systems are characterized by a centralized government that often controls all aspects of political life.

During the Cold War, the Soviet Union's one-party system became synonymous with communist governance.

The Communist Party held a monopoly on political power, and opposition parties were either suppressed or controlled.

In this system, the state controlled not only the economy but also education, media, and other aspects of daily life.

Decision-making was highly centralized, and citizens had limited political freedoms and civil liberties.

Other communist states, such as China, Cuba, and East Germany, followed similar political structures, with variations in governance and control.

In contrast, capitalist political systems, particularly in the West during the Cold War, were often associated with democratic governance.

In countries like the United States, the United Kingdom, and Western European nations, multiparty systems allowed for competitive elections and a separation of powers.

Capitalism itself does not prescribe a specific political system, but in the context of the Cold War, it was often paired with democratic principles such as individual rights, freedom of speech, and rule of law.

Governments were typically limited in their control over the economy and private life, and checks and balances were implemented to prevent abuses of power.

The Cold War saw a complex interplay between democracy and authoritarianism within both communist and capitalist blocs.

While the Western capitalist countries generally promoted democratic values, there were instances of support for authoritarian regimes that aligned with their strategic interests.

How the different systems influenced their people

During the Cold War, both the communist and capitalist blocs engaged in extensive propaganda campaigns to promote their ideologies and discredit the other side.

State-controlled media in communist countries often portrayed capitalism as corrupt and exploitative, while Western media emphasized the lack of freedom and human rights under communism.

This battle for hearts and minds extended to film, literature, art, and even sports, where ideological messages were often woven into popular culture.

Education systems were also influenced by the ideological divide. In communist countries, education was often used to instill socialist values and loyalty to the party.

In capitalist countries, education emphasized democratic principles and individual achievement.

Academic exchanges, scholarships, and cultural diplomacy were tools used by both sides to spread their values and gain influence.

The Cold War had a profound impact on arts and literature, inspiring works that reflected the anxieties, hopes, and critiques of the time.

From dystopian novels like George Orwell's "1984" to the socialist realism of Soviet art, creative expression was both shaped by and responded to the ideological struggle.

Artists and writers often faced censorship or were used as cultural ambassadors, reflecting the complex relationship between art and politics.

The contrast between communism and capitalism was also evident in daily life and consumer culture.

The abundance and variety of consumer goods in the West were promoted as symbols of freedom and prosperity, while the austerity and uniformity of life under communism were portrayed as limitations.

This cultural competition extended to music, fashion, technology, and even food, reflecting the pervasive nature of the ideological divide.

The use of diplomacy and spying by both sides

Throughout the Cold War, numerous summits and agreements were held to manage tensions, negotiate arms control, and address other international issues.

Notable examples include the Geneva Summit (1955), the Cuban Missile Crisis negotiations (1962), the Strategic Arms Limitation Talks (SALT), and the Helsinki Accords (1975).

These diplomatic efforts often played a crucial role in preventing escalation and fostering cooperation, even amidst intense ideological rivalry.

The Cold War was also marked by extensive espionage and intelligence activities by both sides.

The CIA, KGB, MI6, and other intelligence agencies engaged in covert operations, surveillance, disinformation campaigns, and other clandestine activities.

The espionage battle not only influenced diplomatic relations but also contributed to technological advancements, cultural intrigue, and the mystique of the Cold War era.

The Non-Aligned Movement (NAM) emerged as a significant force in international relations during the Cold War.

Comprising countries that did not formally align with either the Eastern or Western blocs, NAM sought to navigate the Cold War's ideological divide and promote peaceful coexistence, economic development, and political independence.

Leaders like India's Jawaharlal Nehru, Egypt's Gamal Abdel Nasser, and Yugoslavia's Josip Broz Tito played key roles in shaping this movement.

The Cold War also influenced the functioning of international organizations like the United Nations.

The ideological divide often played out in the UN's chambers, affecting resolutions, peacekeeping missions, and international cooperation.

Other international organizations, such as the World Bank and the International Monetary Fund, were also shaped by the Cold War dynamics, influencing global economic policies and development strategies.

Places where communism and capitalism clashed

Germany: A Nation Divided

The division of Germany into East and West became a symbol of the Cold War's ideological divide. East Germany, under Soviet influence, adopted a communist system, while West Germany embraced capitalism and aligned with the Western bloc. The construction of the Berlin Wall in 1961 physically separated families and communities, reflecting the deep political and ideological rift. The fall of the Wall in 1989 marked the beginning of the end of the Cold War and the reunification of Germany.

Cuba: The Caribbean Cold War Flashpoint

Cuba's transformation into a communist state under Fidel Castro brought the Cold War to the Western Hemisphere. The Cuban Missile Crisis of 1962 brought the world to the brink of nuclear war, as the U.S. and the Soviet Union faced off over Soviet missiles in Cuba. Cuba's alignment with the Soviet Union and its support for revolutionary movements in Latin America made it a central player in Cold War dynamics in the region.

Vietnam: A War of Ideologies

The Vietnam War was a protracted and devastating conflict that pitted the communist North against the capitalist South, with significant involvement from both the U.S. and the Soviet Union. The war became a symbol of the ideological struggle, with profound impacts on Vietnamese society, American politics, and international relations. The war's legacy continues to influence contemporary debates about military intervention, human rights, and global governance.

Afghanistan: The Soviet Union's Vietnam

The Soviet invasion of Afghanistan in 1979 marked a significant escalation in the Cold War, leading to a decade-long conflict that became the Soviet Union's "Vietnam." The U.S. supported Afghan resistance fighters, turning the conflict into a proxy war. The war had lasting impacts on Afghanistan, contributing to ongoing instability, and played a role in the eventual dissolution of the Soviet Union.

Eastern Europe: The Struggle for Freedom

The countries of Eastern Europe, under Soviet influence, were central to the Cold War struggle. Movements for political reform and independence, such as the Prague Spring in Czechoslovakia and the Solidarity movement in Poland, challenged communist rule and inspired global support for human rights and democracy. The peaceful revolutions of 1989 marked a turning point, leading to the collapse of communist regimes across the region.

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Capitalism and Communism: A Comparative Analysis

Throughout history, various systems have been set to govern societies around the world. Capitalism and communism are the two most analyzed and debated systems that affect the economy and society in very different ways. They are concepts that can be analyzed through a multitude of disciplines. This paper attempts to draw a comparative analysis between capitalism and communism through the lens of sociology. It explores the historical context of both the ideologies and also discusses the contemporary relevance of the same, such that one can see the distinction between them.

The radical withdrawal from the 16th century economic system, mercantilism, that dominated Europe for many centuries was brought forward by Adam Smith. Often known as the father of capitalism, he is credited with establishing political economics with his disquisition An Inquiry into the Nature and Causes of the Wealth of Nations. Capitalism which is based on the free market or free enterprise promotes private ownership and individual economic freedom. The institutions of means of production in a nation are usually not owned by the government but rather by independent individuals. Laissez-faire or free competition is the most important characteristic of capitalism that highlights economic freedom for individuals without the interference of the government. This system keeps prices as low as possible for consumers to seek unlimited amounts of products for the least amount of money. Supply and Demand would be another important characteristic of capitalism which discusses how prices are controlled from getting either too high or too low by increasing and decreasing prices that directly affect the supply and demand of a product.

Communism on the other hand was developed by Karl Marx in the 19th century due to his dislike towards capitalism as it increased the gap between the rich and the poor. The system allowed for the more capable people to occupy the top which led to the rest of the population struggling to survive in the bottom. Being the father of communism, his view on capitalism was an “outmoded economic system that exploited workers, which would eventually rise against the rich because the poor were so unfairly treated (2009).” Communism’s main goal was to replace the principles of capitalism as according to Karl Marx, the society was ruined with the unfair treatment of the poor. Their main principle highlights the prohibition of private land ownership in the hopes of eliminating the gap between the rich and poor and promoting equality. According to communism, private ownership encourages greed due to private ownership, so its prominence lies in its main principle of shared property for the direct control of the economy by the people.

Also Read: The Communist Manifesto – Summary

Historical Context

With time, the Industrial Revolution came around in the 18th century which developed technical practices which was reflected in Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The advocation of economic development with free trade, self-regulating markets, etc was all part of the policies in the 19th century. Moreover, industrial capitalism was also established around this time which created a wave of industrial workers which inspired philosophers like Karl Marx. World War I was also a major play in the evolution of capitalism. However, around World War II and its effects, there was a decline in international markets and The Great Depression had terminated governments’ noninterference with the economy. While major capitalist countries had regained their confidence in the system, by the 1970s many empathized with socialism due to the massive economic inequality it had created and questioned its stability in the long run.

Communistic ideas can be dated back to Plato’s Republic in which he explains the ideal state that contains an entire community that acts as a large family sharing common ownership in all aspects and avoiding private ownership due to its tendency of increasing selfishness. Similar thought processes encouraged monks to swear to serve and share their possessions with the needy.  Sir Thomas More’s Utopia (1516) further discusses monastic orders like the elimination of money and the idea of sharing everything like food, houses, and other assets.

Communism as a system was birthed from the rise of the Industrial Revolution in the 19th century. Karl Marx disliked the idea of high economic productivity at the rate of the distressed working class, so he developed theories that supported the idea of common ownership that avoided class struggles and private ownership. Engels, who was also horrified by the class-divided society, so he accompanied Marx to detail the struggles and poverty that the working class lived in. His The Condition of the English Working Class explained the poverty and sickness that haunted the proletariats or the working class and that the only way to end this struggle is to replace capitalism with communism. They detailed that in a communist system, industrial products such as factories and railroads would be public property and that it would benefit everyone equally. One of their major works, The Manifesto of the Communist Party (1848) encourages a group of radicals, known as the Communist League, and critiques capitalism and its implications and further sketches out a future communist system.

Perception through contemporary culture

Economic practices, social reforms and representation in media are all democratically enabled due to the presence of social media and modern techniques that encourage open discussions on digital platforms. Digital society as a whole serves as a space to evaluate feudal systems in terms of capitalism and communism and hence interprets and shares data with an overwhelming amount of mixed responses, views, comments and strong opinions. For example, digital societies create vaults that function within extremes. Capitalism historically originates from western thought and with the west’s massive influence on the rest of the world has allowed it to dominate economic policies and institutions.

Due to this, throughout history, there has been a massive backlash towards communism and its ideals. This can be backed up by Noam Chomsky’s five filters of Mass Media . He states in one of his filters, which is known as Anti-Communism, and explains that it is a control mechanism. He details that this filter is quite often used to scare the public of the evils of communism to keep it from threatening the very economy that dominates the world as of now. To Noam Chomsky, communism directly threatens the structure of classes and superiority status, and to avoid affecting this, the media uses this filter as a tactic to keep the economy running. Even though communism can be construed to be a topic of contention to this day, many continue to discuss its detrimental or essentially qualitative impacts. While some see it as a way to bring equality and fairness to society and allow for all citizens to have facilities, others believe that heavy control of the free market by the government could be seen as problematic. Overall, it is safe to say that the multiple and diverse viewpoints on both communism and capitalism, including its relevance in pop culture and issues to do with societal flaws are strongly conveyed and pondered over even now, hence validating and substantiating its perception in contemporary times and its generalizability through various time contexts.

• Key Differences

Know the Differences & Comparisons

Difference Between Capitalism and Communism

On the other hand, Karl Marx , a famous Philosopher, and Sociologist, from Germany, initiated the idea of Communism, in his book The Communist Manifesto , as a response to Capitalism. These two political theories are in opposition to each other as in the former promotes private ownership, the latter stands against it. Take a full read of the article given below, to have a clear understanding of the differences between capitalism and communism.

Content: Capitalism Vs Communism

Comparison chart.

Definition of Capitalism

The term ‘capitalism’ implies an economic system that advocates private ownership of the means of production, distribution, and exchange, to earn profit. In this system, the determination of production and price of the goods and services are done by the market, i.e. the demand and supply forces play a significant role here.

The key features of capitalism are individual rights, private property, accumulation of wealth, market economy, free and competitive market, self-interest, minimal government intervention. In a capitalist economy, it is the owners who decide and invest, in the financial and capital market on the production inputs. The competition in the economy decided the price and distribution of merchandise in the economy.

Definition of Communism

A form of socialism, in which the means of production, resources, and property are owned and controlled by the egalitarian society, i.e. by the community equally is called Communism. It is based on the idea of shared ownership. The theory of communism was mainly sparked by the German philosophers cum sociologist Karl Marx and Friedrich Engels. The central principle behind communism is, the contribution and share of each would be based on his ability and needs.

In this political system, the government owns everything and all the individual works for a common goal. Therefore, class distinction does not exist, as all are considered equal. Communism aims at removing the gap between the wealthy and poor and establishing equality in the economy.

Key Differences Between Capitalism and Communism

The following points are noteworthy so far as the difference between capitalism and communism is concerned:

• An economic system in which the trade and industry of the economy are owned and controlled by private individuals to generate profit is called Capitalism. A social system in which a country’s trade and industry are controlled by the community and the share of each individual relies on his ability and needs, is called communism.
• Capitalism is based on the Principle of Individual Rights, whereas Communism is based on the Principle of Community Rights.
• Capitalism is in favor of class distinction, i.e. working class and capitalist class, hence the degree of class distinction between rich and poor is very high. On the contrary, communism opposes a division of society according to class, as it promotes a classless society, so, there is no gap between rich and poor.
• There is a democratic system of government in capitalism. As against this, a totalitarian government system exists in socialism. Totalitarianism is a form of government in which government owns and controls almost everything.
• Under capitalism, the government does not have much involvement. In contrast to communism, there is a high level of government intervention.
• In capitalism, every individual has to work for himself to create wealth. As opposed to this, in communism wealth is distributed as per needs and ability.
• The production inputs like land, labor, and capital are privately owned by the individuals and enterprises, while the means of production are held by the state, in the case of communism.
• In communism, more preference is given to society rather than an individual which is not in the case of capitalism, i.e. freedom of the individual is vital.
• In capitalism, fierce competition exists between the firms whereas in communism, as the market is controlled by the state, the competition is quite low.
• In communism, the profit earned by the enterprise is distributed among all the people of the economy. On the contrary, the profit of the enterprise, in capitalism, is enjoyed by the owner only.
• While capitalism can be found in western countries, socialism is more popular in eastern countries of the world.

Both communism and capitalism are a form of social organization, that is associated with trade and industry in the economy and discusses the ownership of property.

As every coin has two aspects, a good and a bad, so as with the case of communism and capitalism. In capitalism, the distribution of wealth is uneven, due to which the rich get richer while the poor become poorer. On the other hand, in communism, there is an equal distribution of wealth, but it does not allow individuals to have private property. Communism attempts to eliminate capitalism in the economy, as it was introduced, as a response to injustices of capitalism.

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Betsy Trotwood says

September 11, 2017 at 6:05 am

This is a very clear explanation.

Umer Azib says

December 8, 2017 at 12:00 am

great explanation it help me for assignment in class thanks for uploading

April 15, 2018 at 2:16 am

Thank you so much, I have been struggling to understand the difference between the two and now i finally do, plus i have a presentation in class and i will definitely use this.

Alexander Braaahmilton says

June 27, 2019 at 5:33 pm

Thank you, keep us updated.

kumara says

July 12, 2019 at 2:08 pm

Diriga khalid says

July 22, 2019 at 11:06 am

Great info thanks a lot.

David Harris says

August 1, 2019 at 12:55 am

The US is a great Capitalist country. We have the greatest system in the world in my opinion.

Loved these explanations. This should be required reading for all US citizens (starting with junior high students). Our US Congress should have to memorize these differences and pass a test before they could run for any national office.

Mercy Omani (Ikediuba) says

October 6, 2019 at 10:33 am

Very Helpful. Thank you so much.

April 22, 2021 at 11:24 pm

I like this website

Wilhelm Weber says

January 21, 2022 at 5:22 pm

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Deez Nutz says

February 23, 2022 at 3:19 am

Clement Etchie says

April 29, 2022 at 1:03 am

Thanks for helping me am so grateful

June 9, 2022 at 7:18 am

Easy to understand! Thank you!

Haseeb Khattak says

August 17, 2022 at 1:45 am

Tomorrow I have a presentation on these two topics Capitalism Vs Communism, it’s too much helpful. Thank you so much

Syed Zaini says

December 21, 2022 at 10:40 pm

well, I have prepared my presentation from it, for IR class.

Rosemary says

April 16, 2023 at 7:47 am

Thanks for this website, now I understand and know the meaning and also the different between ( Capitalism and Communism). Well explained for your understanding.

May 1, 2023 at 7:39 pm

Great explanation of the differences. Thanks!

May 5, 2023 at 8:30 pm

June 9, 2023 at 10:15 am

Ramathan Balyejjusa says

August 7, 2023 at 12:11 am

Very good explanation

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Capitalism vs. Communism: What Are the Differences?

In the ongoing discourse of economic and political systems, the debate between capitalism and communism has long been a focal point. These two ideologies represent starkly different approaches to organizing society, shaping the distribution of wealth, and determining the role of the state. As we delve into the complexities of capitalism and communism, it becomes evident that each system carries its own set of advantages and drawbacks, igniting profound discussions about equality, individual freedom, and the pursuit of prosperity.

This article aims to explore the fundamental principles, historical contexts, and contemporary implications of capitalism and communism, shedding light on their contrasting philosophies and impact on societies worldwide.

The Main Difference Between Capitalism and Communism

Capitalism vs. communism: key takeaways.

• Capitalism  advocates private property rights, market freedom, and individual economic interests.
• Communism  stands for common ownership of the means of production, absence of class distinction, and government-regulated economies.

Capitalism vs. Communism: The Definition

What does capitalism mean.

You understand capitalism as a system where businesses and properties are  privately owned . Key elements include:

• Profit motive:  The drive for individuals to improve their financial status.
• Market competition:  Encourages innovation and efficiency.
• Supply and Demand Laws:  Determine the price and availability of goods and services.

What Does Communism Mean?

Communism involves a theory where the  community owns the means of production . Distinctive elements are:

• State planning: The government decides on the production and distribution of goods.
• Equal distribution:  Aims to allocate resources fairly among all people.
• No class hierarchy:  Strives to dissolve class distinctions.

Here’s a quick comparison table between capitalism and communism:

• Capitalist Countries:  United States, Germany, Japan.
• Communist Countries: Cuba, China.

Tips to Remember the Differences

• In  capitalism , you are looking at  individual pursuits , where market forces drive the economy.
• In  communism , it is about  collective good , with the government steering the economic direction.

Capitalism vs. Communism: Examples

In comparing capitalism and communism, you will find distinct usage of these terms in various examples. These examples will help you understand how each system handles economic and social policy.

Example Sentences Using Capitalism

• Under capitalism , your company has the ability to enter the market freely and compete to maximize your profits.
• The country’s economic system is based on the principles of  capitalism  and free enterprise.
• The history of  capitalism  is intertwined with the development of industrialization.
• Critics of  capitalism  claim that it leads to income inequality and exploitation.
• The stock market is a key component of modern  capitalism .
• Some believe that  capitalism  promotes consumerism and materialism.
• The concept of private ownership and free trade is fundamental to the ideology of  capitalism .
• Capitalism  encourages individuals to pursue their own economic interests in a competitive market.

Example Sentences Using Communism

• Communism would mean that your work benefits everyone equally, and goods are allocated by the community as a whole.
• The fall of the Berlin Wall marked a significant moment in the history of  Communism .
• Some argue that the principles of  Communism  are inherently flawed.
• The country embraced  Communism  as its governing philosophy after the revolution.
• The effects of  Communism  are still felt in the region decades after its collapse.
• Many textbooks explore the rise and fall of  Communism  in the 20th century.
• The ideology of  Communism  continues to influence political thought and global relations.
• The Cold War was characterized by the ideological struggle between  Communism  and capitalism.

Related Confused Words

When discussing economic systems, you may encounter various terms that are often confused with capitalism and communism.

Socialism vs. Communism

You might mix up socialism and communism as they both advocate for public ownership to different extents. However, socialism allows for some private ownership and market functions, while communism usually aims for complete public ownership and planned economies.

Authoritarianism vs. Communism

Authoritarianism is a form of governance, not an economic system. It’s often confused with communism because many communist states have authoritarian leadership. However, communism as an ideology does not necessitate authoritarianism.

Democracy vs. Capitalism

Democracy refers to a political system in which power is vested in the people, who can express their will through free and fair elections. Capitalism is an economic system characterized by private ownership of the means of production and the pursuit of profit.

While a democracy can coexist with various economic systems, including capitalism or socialism, capitalism can function within both democratic and non-democratic political frameworks. In contrast, communist states often have a single-party rule, which can be perceived as undemocratic, and the economic system is based on communal ownership of the means of production.

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Communism is a political and economic system that seeks to create a classless society in which the major means of production, such as mines and factories, are owned and controlled by the public. There is no government or private property or currency, and the wealth is divided among citizens equally or according to individual need. Many of communism’s tenets derive from the works of German revolutionary Karl Marx , who (with Friedrich Engels ) wrote The Communist Manifesto (1848). However, over the years others have made contributions—or corruptions, depending on one’s perspective—to Marxist thought. Perhaps the most influential changes were proposed by Soviet leader Vladimir Lenin , who notably supported authoritarianism .

At one time about one-third of the world's population lived under communist governments, most notably in the republics of the Soviet Union . Today communism is the official form of government in only five countries: China , North Korea , Laos , Cuba , and Vietnam . However, none of these meet the true definition of communism. Instead, they can be said to be in a transitional stage between the end of capitalism and the establishment of communism. Such a phase was outlined by Karl Marx , and it came to include the creation of a dictatorship of the proletariat . While all five countries have authoritarian governments, their commitment to abolishing capitalism is debatable.

Exactly how communism differs from socialism has long been a matter of debate. Karl Marx used the terms interchangeably. For many, however, the difference can be seen in the two phases of communism as outlined by Marx. The first is a transitional system in which the working class controls the government and economy yet still pays people according to how long, hard, or well they work. Capitalism and private property exist, though to a limited degree. This phase is widely regarded as socialism. However, in Marx’s fully realized communism, society has no class divisions or government or personal property. The production and distribution of goods is based upon the principle “From each according to his ability, to each according to his needs.”

Although the term communism did not come into use until the 1840s, societies that may be considered communist were described as long ago as the 4th century BCE, when Plato wrote the Republic . That work described an ideal society in which the governing class devotes itself to serving the interests of the whole community. The first Christians practiced a simple form of communism, and in Utopia (1516) the English humanist Thomas More described an imaginary society in which money is abolished and people share meals, houses, and other goods in common. However, communism is most widely identified with Karl Marx , who outlined the system with Friedrich Engels in The Communist Manifesto (1848). Marx’s embrace of communism was motivated in part by the inequities caused by the Industrial Revolution .

communism , political and economic doctrine that aims to replace private property and a profit-based economy with public ownership and communal control of at least the major means of production (e.g., mines, mills, and factories) and the natural resources of a society. Communism is thus a form of socialism —a higher and more advanced form, according to its advocates. Exactly how communism differs from socialism has long been a matter of debate, but the distinction rests largely on the communists’ adherence to the revolutionary socialism of Karl Marx .

(Read Leon Trotsky’s 1926 Britannica essay on Lenin.)

Like most writers of the 19th century, Marx tended to use the terms communism and socialism interchangeably. In his Critique of the Gotha Programme (1875), however, Marx identified two phases of communism that would follow the predicted overthrow of capitalism : the first would be a transitional system in which the working class would control the government and economy yet still find it necessary to pay people according to how long, hard, or well they worked, and the second would be fully realized communism—a society without class divisions or government, in which the production and distribution of goods would be based upon the principle “From each according to his ability, to each according to his needs.” Marx’s followers, especially the Russian revolutionary Vladimir Ilich Lenin , took up this distinction.

In State and Revolution (1917), Lenin asserted that socialism corresponds to Marx’s first phase of communist society and communism proper to the second. Lenin and the Bolshevik wing of the Russian Social-Democratic Workers’ Party reinforced this distinction in 1918, the year after they seized power in Russia, by taking the name All- Russian Communist Party . Since then, communism has been largely, if not exclusively, identified with the form of political and economic organization developed in the Soviet Union and adopted subsequently in the People’s Republic of China and other countries ruled by communist parties.

For much of the 20th century, in fact, about one-third of the world’s population lived under communist regimes. These regimes were characterized by the rule of a single party that tolerated no opposition and little dissent . In place of a capitalist economy, in which individuals compete for profits, moreover, party leaders established a command economy in which the state controlled property and its bureaucrats determined wages, prices, and production goals. The inefficiency of these economies played a large part in the collapse of the Soviet Union in 1991, and the remaining communist countries (excepting North Korea) are now allowing greater economic competition while holding fast to one-party rule. Whether they will succeed in this endeavour remains to be seen. Succeed or fail, however, communism is clearly not the world-shaking force it was in the 20th century.

Although the term communism did not come into use until the 1840s—it is derived from the Latin communis , meaning “shared” or “common”—visions of a society that may be considered communist appeared as long ago as the 4th century bce . In the ideal state described in Plato’s Republic , the governing class of guardians devotes itself to serving the interests of the whole community . Because private ownership of goods would corrupt their owners by encouraging selfishness, Plato argued, the guardians must live as a large family that shares common ownership not only of material goods but also of spouses and children.

Other early visions of communism drew their inspiration from religion . The first Christians practiced a simple kind of communism—as described in Acts 4:32–37, for example—both as a form of solidarity and as a way of renouncing worldly possessions. Similar motives later inspired the formation of monastic orders in which monks took vows of poverty and promised to share their few worldly goods with each other and with the poor. The English humanist Sir Thomas More extended this monastic communism in Utopia (1516), which describes an imaginary society in which money is abolished and people share meals, houses, and other goods in common.

Other fictional communistic utopias followed, notably City of the Sun (1623), by the Italian philosopher Tommaso Campanella , as did attempts to put communist ideas into practice. Perhaps the most noteworthy (if not notorious) of the latter was the theocracy of the Anabaptists in the Westphalian city of Münster (1534–35), which ended with the military capture of the city and the execution of its leaders. The English Civil Wars (1642–51) prompted the Diggers to advocate a kind of agrarian communism in which the Earth would be “a common treasury,” as Gerrard Winstanley envisioned in The Law of Freedom (1652) and other works. The vision was not shared by the Protectorate led by Oliver Cromwell , which harshly suppressed the Diggers in 1650.

It was neither a religious upheaval nor a civil war but a technological and economic revolution —the Industrial Revolution of the late 18th and early 19th centuries—that provided the impetus and inspiration for modern communism. This revolution, which achieved great gains in economic productivity at the expense of an increasingly miserable working class, encouraged Marx to think that the class struggles that dominated history were leading inevitably to a society in which prosperity would be shared by all through common ownership of the means of production.

Communism Versus Capitalism

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• Thomas F. Phillips 3  

For capitalism: Free market, Free enterprise; For communism: Collectivism

“Capitalism can be described, in simple terms, as a social system of production and distribution , dominated by markets (markets being where buyers and sellers meet to trade goods and services).” (See “Capitalism” , in this volume). Communism can be described as a social system of production and distribution , dominated by command (command being where the details of production and distribution are determined by the state). Communist economies are associated with the central government, long-term planning of production and distribution; capitalism is associated with production and distribution adapting to market pressures that lead to socially beneficial results. While capitalist economies have aspects of command (i.e., the judiciary, national defense, and other roles of the state) that control some aspects of production and distribution, markets play the dominant role. Similarly, communist economies often...

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Marx K (1867) (Reprinted 1967) Capital, 3 vols. International Publishers, New York

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Marx K, Engels F (1848) (Reprinted 2002) The communist manifesto. Penguin, New York

Smith A (1776) (Reprinted 1971) An inquiry into the nature and causes of the wealth of nations. Cannan E (ed) Methuen, London

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Capitalism, Socialism, Communism: Distinguishing Important Economic Concepts

Capitalism, socialism, and communism are three key concepts in social studies, with complex definitions and complicated histories. Explaining these concepts in the classroom is muddled even more by how these words are used in modern media. The meaning is often obscured by political alliances and deliberate attempts to mislead.

The words capitalism , socialism , and communism describe different economic systems. A simple and effective way to present these key concepts in the classroom is through the economic continuum illustrated by the chart below. Students are much more likely to grasp the key differences if these concepts are first presented separate from political systems such as autocracy, theocracy, or democracy.

Capitalism, socialism, and communism are also easier to understand and remember when the histories of the words are explored.

Photo: iStock by Getty Images

Economic Terms Defined

Capitalism and socialism first came into use in the 1830s. Capitalism described an economic system in which wealth (or capital , another word for wealth) was owned by individuals for their personal profit. The British policy of government regulation of trade called mercantilism was being abandoned by the 1830s, and the free market (not the government) determined the production and distribution of goods. The word capitalism was a product of the changing economy of Great Britain during the Industrial Revolution.

The word socialism also began to be used in the 1830s, to describe a system different from capitalism. Socialism held that groups of people should own and regulate the economy for the benefit of all the members, not just a few. Early nineteenth-century socialists were often disturbed by the economic and social changes caused by the Industrial Revolution. In the first half of the nineteenth century, socialist ideals inspired utopian communities such as the transcendentalists’ Brook Farm, Robert Owen’s New Harmony, and the Oneida Community. An even older ideal of Christian socialism described in the Bible inspired religious socialist communities such as the Shakers, Rappites, Amana Colonies, and Hutterites. Even the term social studies alludes to how a community or wider society benefits from shared knowledge.

Communism was first a French word, coined in the 1840s, to describe a system of collective ownership in which individuals did not own private property and worked together for the benefit of all community members. This new French word described ideals similar to the English concept of socialism and derived from the word common , meaning something is free or open to everyone.

The word communism was adopted by Karl Marx and Frederick Engels in the 1850s to describe their ideology of opposing industrial capitalism. Marxist communism sought the overthrow of governments supporting a capitalist economy. By 1918, communism was the ideology of Russia’s Bolshevik Revolution and was associated with a single authoritarian political party. The combined economic and political ideology of modern communism was implemented in the Soviet Union (1922), the People’s Republic of China (1949), North Korea (1948), North Vietnam (1945), and Cuba (1965).

Modern Day Implications

Today, the historical words capitalism , socialism , and communism do not fully capture the economic systems of nations. New words are also used to describe economic systems: free market system ; mixed economy ; command economy . But these modern words can still lead to confusion because, in reality, modern nations are not purely free market capitalist or purely command/communist. In recent years, communist China and Cuba have loosened economic restrictions and allowed free market activities. On the other hand, the United States regulates many aspects of its economy and owns and manages very “socialist” enterprises such as public schools, public transportation, and public libraries.

In other words, communism, socialism, and capitalism are a continuum, with modern national economics falling somewhere in the middle, or mixed, zone. In American politics, those aligned to the right of the political spectrum are more likely to support free market policies, and those to the left are more likely to support government intervention in the economy.  Recent polls by the Pew Research Center  demonstrate how the political alliances of Americans influence perceptions of these words.

Ultimately, nations and citizens of nations must decide how much government regulation of the economy is appropriate. Therefore, a clear understanding of the historical developments, meaning, political associations, and synonyms of these three words is essential in social studies.

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Cynthia W. Resor is a social studies education professor and former middle and high school social studies teacher. Her dream job? Time-travel tour guide. But until she discovers the secret of time travel, she writes about the past in her blog,  Primary Source Bazaar . Her three books on teaching social history themes feature essential questions and primary sources:  Discovering Quacks, Utopias, and Cemeteries: Modern Lessons from Historical Themes ;    Investigating Family, Food, and Housing Themes in Social Studies  and  Exploring Vacation and Etiquette Themes in Social Studies .

4 thoughts on “ Capitalism, Socialism, Communism: Distinguishing Important Economic Concepts ”

Thank you for this article. I greatly enjoyed reading it. I am going to look for books by Cynthia W Resor. I would like to learn more. I usually read about science and mathematics.

I am trying to recall an old saying that used a cow and her milk to show how each was distributed via 5 various “isms”. ie. a capitalist sells the milk, keeps the milk and the profit; a communist does’t own the cow, mills the cow and earns a wage. Can you help me? I think I first read it in the ‘70’s. I would like to pass it on to my friends and family. Thank you, Steve Chase. shchase@msn. com

Thank you for this very clear and concise explanation. I searched through many sites before landing on yours and finally found the answers I was looking for.

this was a great way to describe the difference between these 3 complicated words that were for me. thank you so much!

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Socialism vs. Capitalism: What Is the Difference?

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Socialism and capitalism are the two main economic systems used in most countries today. The main difference between capitalism and socialism is the extent to which the government controls the economy.

Key Takeaways: Socialism vs. Capitalism

• Socialism is an economic and political system under which the means of production are publicly owned. Production and consumer prices are controlled by the government to best meet the needs of the people.
• Capitalism is an economic system under which the means of production are privately owned. Production and consumer prices are based on a free-market system of “supply and demand.”
• Socialism is most often criticized for its provision of social services programs requiring high taxes that may decelerate economic growth.
• Capitalism is most often criticized for its tendency to allow income inequality and stratification of socio-economic classes.

Socialist governments strive to eliminate economic inequality by tightly controlling businesses and distributing wealth through programs that benefit the poor, such as free education and healthcare. Capitalism, on the other hand, holds that private enterprise utilizes economic resources more efficiently than the government and that society benefits when the distribution of wealth is determined by a freely-operating market.

The United States is generally considered to be a capitalist country, while many Scandinavian and Western European countries are considered socialist democracies. In reality, however, most medium- and high-income countries—including the U.S.—employ a mixture of socialist and capitalist programs.

Capitalism Definition

Capitalism is an economic system under which private individuals own and control businesses, property, and capital—the “means of production.” The volume of goods and services produced is based on a system of “ supply and demand ,” which encourages businesses to manufacture quality products as efficiently and inexpensively as possible.

In the purest form of capitalism— free market or laissez-faire capitalism—individuals are unrestrained in participating in the economy. They decide where to invest their money, as well as what to produce and sell at what prices. True laissez-faire capitalism operates without government controls. In reality, however, most capitalist countries employ some degree of government regulation of business and private investment.

Capitalist systems make little or no effort to prevent income inequality . Theoretically, financial inequality encourages competition and innovation, which drive economic growth. Under capitalism, the government does not employ the general workforce. As a result, unemployment can increase during economic downturns . Under capitalism, individuals contribute to the economy based on the needs of the market and are rewarded by the economy based on their personal wealth.

Socialism Definition 

Socialism describes a variety of economic systems under which the means of production are owned equally by everyone in society. In some socialist economies, the democratically elected government owns and controls major businesses and industries. In other socialist economies, production is controlled by worker cooperatives. In a few others, individual ownership of enterprise and property is allowed, but with high taxes and government control. 

The mantra of socialism is, “From each according to his ability, to each according to his needs.” This means that each person in society gets a share of the economy’s collective production—goods and wealth—based on how much they need. Workers are paid their share of production after a percentage has been deducted to help pay for social programs that serve “the common good.” 

In contrast to capitalism, the main concern of socialism is the elimination of “rich” and “poor” socio-economic classes by ensuring an equal distribution of wealth among the people. To accomplish this, the socialist government controls the labor market, sometimes to the extent of being the primary employer. This allows the government to ensure full employment even during economic downturns. 

The Socialism vs. Capitalism Debate  

The key arguments in the socialism vs. capitalism debate focus on socio-economic equality and the extent to which the government controls wealth and production.

Ownership and Income Equality 

Capitalists argue that private ownership of property (land, businesses, goods, and wealth) is essential to ensuring the natural right of people to control their own affairs. Capitalists believe that because private-sector enterprise uses resources more efficiently than government, society is better off when the free market decides who profits and who does not. In addition, private ownership of property makes it possible for people to borrow and invest money, thus growing the economy. 

Socialists, on the other hand, believe that property should be owned by everyone. They argue that capitalism’s private ownership allows a relatively few wealthy people to acquire most of the property. The resulting income inequality leaves those less well off at the mercy of the rich. Socialists believe that since income inequality hurts the entire society, the government should reduce it through programs that benefit the poor such as free education and healthcare and higher taxes on the wealthy. 

Consumer Prices

Under capitalism, consumer prices are determined by free market forces. Socialists argue that this can enable businesses that have become monopolies to exploit their power by charging excessively higher prices than warranted by their production costs. 

In socialist economies, consumer prices are usually controlled by the government. Capitalists say this can lead to shortages and surpluses of essential products. Venezuela is often cited as an example. According to UNHCR, “inflation...as well as shortages of food, medicine and essential services have forced millions to seek refuge...” Hyperinflation and deteriorating health conditions under the socialist economic policies of President Nicolás Maduro have driven an estimated 7.7 million people to leave the country as food became a political weapon. 

Efficiency and Innovation 

The profit incentive of capitalism’s private ownership encourages businesses to be more efficient and innovative, enabling them to manufacture better products at lower costs. While businesses often fail under capitalism, these failures give rise to new, more efficient businesses through a process known as “creative destruction.” 

Socialists say that state ownership prevents business failures, prevents monopolies, and allows the government to control production to best meet the needs of the people. However, say capitalists, state ownership breeds inefficiency and indifference as labor and management have no personal profit incentive. 

Healthcare and Taxation 

Socialists argue that governments have a moral responsibility to provide essential social services. They believe that universally needed services like healthcare, as a natural right, should be provided free to everyone by the government. To this end, hospitals and clinics in socialist countries are often owned and controlled by the government. 

Capitalists contend that state, rather than private control, leads to inefficiency and lengthy delays in providing healthcare services. In addition, the costs of providing healthcare and other social services force socialist governments to impose high progressive taxes while increasing government spending, both of which have a strong effect on the economy. However, in some capitalist countries such as the U.S., healthcare is unbearably expensive for the consumer.

Capitalist and Socialist Countries Today 

Today, there are few if any medium- and high- countries that are 100% capitalist or socialist. Indeed, the economies of most countries combine elements of socialism and capitalism.

In Norway, Sweden, and Denmark—generally considered socialist—the government provides healthcare, education, and pensions. However, private ownership of property creates a degree of income inequality. An average of 65% of each nation’s wealth is held by only 10% of the people—a characteristic of capitalism.

The economies of Cuba, China, Vietnam, Russia, and North Korea incorporate characteristics of both socialism and communism .

While countries such as the United Kingdom, France, and Ireland have strong socialist parties, and their governments provide many social support programs, most businesses are privately owned, making them essentially capitalist.

Though long considered the prototype of capitalism, the United States employs certain socialist-like social safety net programs such as Social Security, Medicare, food stamps , and housing assistance. This is set in the Preamble of the U.S. Constitution , with one of the nation’s goals being to “promote the general welfare.”

Contrary to popular belief, socialism did not evolve from Marxism . Societies that were to varying degrees “socialist” have existed or have been imagined since ancient times. Examples of actual socialist societies that predated or were uninfluenced by German philosopher and economic critic Karl Marx were Christian monastic enclaves during and after the Roman Empire and the 19th-century utopian social experiments proposed by Welsh philanthropist Robert Owen. Premodern or non-Marxist literature that envisioned ideal socialist societies include The Republic by Plato , Utopia by Sir Thomas More, and Social Destiny of Man by Charles Fourier. 

Socialism vs. Communism

Unlike socialism, communism is both an ideology and a form of government. As an ideology, it predicts the establishment of a dictatorship controlled by the working-class proletariat established through violent revolution and the eventual disappearance of social and economic class and state. As a form of government, communism is equivalent in principle to the dictatorship of the proletariat and in practice to a dictatorship of communists. In contrast, socialism is not tied to any specific ideology. It presupposes the existence of the state and is compatible with democracy and allows for peaceful political change.

Capitalism 

While no single person can be said to have invented capitalism, capitalist-like systems existed as far back as ancient times. The ideology of modern capitalism is usually attributed to Scottish political economist Adam Smith in his classic 1776 economic treatise "The Wealth of Nations". The origins of capitalism as a functional economic system can be traced to 16th to 18th century England, where the early Industrial Revolution gave rise to mass enterprises, such as the textile industry, iron, and steam power . These industrial advancements led to a system in which accumulated profit was invested to increase productivity—the essence of capitalism.

Despite its modern status as the world’s predominant economic system, capitalism has been criticized for several reasons throughout history. These include the unpredictable and unstable nature of capitalist growth, social harms, such as pollution and abusive treatment of workers, and forms of economic disparity, such as income inequality . Some historians connect profit-driven economic models such as capitalism to the rise of oppressive institutions such as human enslavement , colonialism , and imperialism .

Sources and Further Reference

• “Back to Basics: What is Capitalism?” International Monetary Fund , June 2015, https://www.imf.org/external/pubs/ft/fandd/2015/06/basics.htm.
• Fulcher, James. “Capitalism A Very Short Introduction.” Oxford, 2004, ISBN 978-0-19-280218-7.
• de Soto, Hernando. The Mystery of Capital.” International Monetary Fund , March, 2001, https://www.imf.org/external/pubs/ft/fandd/2001/03/desoto.htm.
• Busky, Donald F. “Democratic Socialism: A Global Survey.” Praeger, 2000, ISBN 978-0-275-96886-1.
• Nove, Alec. “The Economics of Feasible Socialism Revisited.” Routledge, 1992, ISBN-10: 0044460155.
• Newport, Frank. “The Meaning of ‘Socialism’ to Americans Today.” Gallup , October 2018), https://news.gallup.com/opinion/polling-matters/243362/meaning-socialism-americans-today.aspx.
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What Is Communism? Definition and History

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Communism is a political and economic ideology that positions itself in opposition to liberal democracy and capitalism . It advocates instead for a classless system in which the means of production are owned communally and private property is nonexistent or severely curtailed. 

Key Takeaways

• Communism is an economic ideology that advocates for a classless society in which all property and wealth are communally owned instead of being owned by individuals.
• Visions of a society that may be considered communist appeared as long ago as the 4th Century BCE.
• Modern communist ideology began to develop during the French Revolution and its seminal tract, Karl Marx and Friedrich Engels' "Communist Manifesto," was published in 1848.
• Communism was pitted against capitalism, which relies on democracy and the production of capital to form a society.
• Prominent examples of communism were the Soviet Union and China. The Soviet Union collapsed in 1991 but China has drastically revised its economy to include some capitalism.

Communism is an umbrella term that encompasses a range of ideologies. The term's modern usage originated with Victor d'Hupay, an 18th-century French aristocrat who advocated living in "communes" in which all property would be shared and "all may benefit from everybody's work."

The idea was hardly new, even at that time. The Bible's Book of Acts describes 1st-Century Christian communities holding property in common according to a system known as  koinonia. This inspired later religious groups such as the 17th-century English "Diggers" to reject private ownership.

Modern communist ideology began to develop during the French Revolution and its seminal tract, Karl Marx and Friedrich Engels' "Communist Manifesto," was published in 1848. That pamphlet rejected the Christian tenor of previous communist philosophies, laying out a materialist and scientific analysis of the history and future trajectory of human society. "The history of all hitherto existing society," Marx and Engels wrote, "is the history of class struggles."

The Communist Manifesto presented the French Revolution as a major historical turning point when the "bourgeoisie," the merchant class that was in the process of consolidating control over the "means of production," overturned the feudal power structure and ushered in the modern capitalist era.

That revolution replaced the medieval class struggle that pitted the nobility against the serfs with the modern one pitting the bourgeois owners of capital against the "proletariat," the working class who sell their labor for wages.

Marx, Engels, and their followers advocated for and predicted as historically inevitable a global proletarian revolution in the Communist Manifesto and later works. They stated that it would first usher in an era of socialism , then of communism .

The final stage of human development would mark the end of class struggle and therefore of history in Communist theory. All people would live in social equilibrium without class distinctions, family structures, religion, or property. The state would "wither away," too.

As a popular Marxist slogan puts it, the Communist economy would function "from each according to his ability, to each according to his needs."

Marx and Engels' theories wouldn't be tested in the real world until after their deaths. An uprising in Russia toppled the czar and sparked a civil war in 1917 during World War I that eventually saw a group of radical Marxists led by Vladimir Lenin gain power in 1922. This group was called the Bolsheviks. It founded the Soviet Union on former Imperial Russian territory and attempted to put communist theory into practice.

Lenin had developed the Marxist theory of vanguardism before the Bolshevik Revolution. This theory argued that a close-knit group of politically enlightened elites was necessary to usher in the higher stages of economic and political evolution: socialism and finally communism.

Lenin died shortly after the civil war ended but the "dictatorship of the proletariat" led by his successor Joseph Stalin would pursue brutal ethnic and ideological purges as well as forced agricultural collectivization. Tens of millions died during Stalin's rule from 1922 to 1953 on top of the tens of millions who died as a result of the war with Nazi Germany.

The Soviet state became a powerful one-party institution rather than withering away. It prohibited dissent and occupied the "commanding heights" of the economy. Agriculture, the banking system, and industrial production were subject to quotas and price controls laid out in a series of Five Year Plans.

This system of central planning enabled rapid industrialization and growth in Soviet gross domestic product (GDP) outpaced that of the U.S. from 1950 to 1965. The Soviet economy generally grew at a much slower pace than its capitalist, democratic counterparts, however.

Weak consumer spending was a particular drag on growth. Central planners' emphasis on heavy industry led to chronic underproduction of consumer goods. Long lines at understocked grocery stores were a fixture of Soviet life even during periods of relative prosperity.

The Soviet Union collapsed in 1991 after a push to reform the economic and political system and provide greater room for private enterprise and free expression. These reform pushes were known as perestroika  and  glasnost respectively. They didn't halt the economic decline the Soviet Union suffered in the 1980s and likely hastened the Communist state's end by loosening its grip on sources of dissent.

Mao Zedong's Communist Party gained control of China In 1949 after more than 20 years of war with the Chinese Nationalist Party and Imperial Japan. It formed the world's second major Marxist-Leninist state. Mao allied the country with the Soviet Union but the Soviets' policies of de-Stalinization and "peaceful coexistence" with the capitalist West led to a diplomatic split with China around 1958.

Mao's rule in China resembled Stalin's in its violence, deprivation, and insistence on ideological purity. The Communist Party ordered the rural population to produce enormous quantities of steel during the Great Leap Forward from 1958 to 1962 to jumpstart an industrial revolution in China.

The same period's Great Chinese Famine killed at least 16 million people and perhaps more than 45 million. The Cultural Revolution, an ideological purge that lasted from 1966 until Mao's death in 1976, killed perhaps another 1.6 million people and subjected millions of others to political persecution.

Deng Xiaoping introduced a series of market reforms after Mao's death that remained in effect under his successors. The U.S. began normalizing relations with China when President Nixon visited in 1972 before Mao's death.

The Chinese Communist Party (CCP) remains in power, presiding over a largely capitalist system, although state-owned enterprises continue to form a large part of the economy. Freedom of expression is significantly curtailed and meaningful opposition to the reigning Communist Party isn't permitted. It would take a miracle for the CCP to be ousted.

The year marked the collapse of the Soviet Union and the end of the Cold War between that power and the U.S.

The U.S. emerged from World War II as the world's richest and most militarily powerful nation. The country, if not all its people, felt a sense of exceptionalism and historical purpose as a liberal democracy that had just defeated fascist dictatorships in two theaters.

The Soviet Union, its ally in the fight against Germany and the world's only revolutionary Marxist state, did as well. The two powers promptly divided Europe into spheres of political and economic influence: Winston Churchill called this dividing line the "Iron Curtain."

The two superpowers both possessed nuclear weapons after 1949 and they engaged in a long standoff known as the Cold War. The closest the U.S. came to direct military conflict with the Soviet Union was the 1962 Cuban missile crisis.

The U.S. did fight a prolonged war in Vietnam, however, in which its military supported South Vietnamese forces fighting the Chinese- and Soviet-supported North Vietnamese army and South Vietnamese communist guerrillas. The U.S. withdrew from the war and Vietnam was united under communist rule in 1975.

The Cold War ended with the collapse of the Soviet Union in 1991.

Communism failed for several reasons, including a lack of profit incentives among citizens, the failure of central planning, and the impact of power being seized by such a small number of people who then exploited it and gamed the system.

Why Did Communism Fail?

There's been extensive study of the reasons for communism's failure but researchers have pinpointed a couple of common factors that contributed to its demise.

The first is an absence of incentives among citizens to produce for profit. The profit incentive leads to competition and innovation in society but an ideal citizen in a communist society was selflessly devoted to societal causes and rarely thought about their own welfare.

The second reason for communism's failure was the system's inherent inefficiencies, such as centralized planning. This form of planning requires aggregation and synthesis of enormous amounts of data at a granular level. All projects were planned centrally so this form of planning was also complex. Growth data was fudged or error-prone in several cases to make facts fit into planned statistics and create an illusion of progress.

The concentration of power in the hands of a select few also bred inefficiency and provided them with incentives to game the system for their benefit and retain their hold on power. Corruption and laziness became endemic features of this system. Surveillance such as that characterized East German and Soviet societies was common. It also disincentivized industrious and hard-working people. The economy suffered in the end.

What Is an Example of Communism?

An example of communism would be a commune where people live together and share responsibilities and possessions. Many of these communities function well but they tend to be small in scale.

What Countries Are Still Communist?

Communism is the official form of government in China, Cuba, Laos, North Korea, and Vietnam. These countries also abide by some capitalist principles, however. They're largely autocratic and they don't reflect Marx’s definition of the term.

What Is the Difference Between Communism and Socialism?

Both communism and socialism advocate public over private ownership and they champion equality. They seek to give power to the working class. Socialism is viewed as a more moderate ideology, however. Unlike communism, it permits the continued existence of capitalism in some parts of the economy and favors gradual change over revolution.

Communism has been around as a theory since the beginning of humanity but the French Revolution, Karl Marx, and Friedrich Engels turned it into an influential political ideology. 

The idea of a classless society in which all property and wealth are communally owned has been tarnished somewhat since then. It has existed harmoniously in smaller communities but communism has so far failed to be successfully implemented on a larger level. Two major examples are Russia and China where communist leaders ruled with violence and suppression and often gamed the system for their own benefit.

Some say that this proves communism doesn’t work. Others argue that these regimes deviated from communism and therefore shouldn't be considered as examples.

Britannica. " Communism ."

Marx, Karl and Engels, Friedrich. " The Communist Manifesto ." Appleton-Century-Crofts, Inc., 1955, page 9.

Marx, Karl and Engels, Friedrich. " The Communist Manifesto ." Appleton-Century-Crofts, Inc., 1955, page xxviii.

Library of Congress. " Revelations From the Russian Archives ."

History.com. " Joseph Stalin ."

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U.S. Department of State Office of the Historian. " Fall of Communism in Eastern Europe, 1989 ."

U.S. Department of State Office of the Historian. " The Chinese Revolution of 1949 ."

U.S. Department of State Archive. " Background Notes: China, August 1999 ."

Meng, Xin, Qian, Nancy, and Yared, Pierre. " The Institutional Causes of China's Great Famine, 1959-1961 ." Oxford University Press, January 2015, page 1568.

Harvard University. " For Whom the Bell Tolls: The Political Legacy of China's Cultural Revolution ."

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Marxists.org. " How to Be a Good Communist ."

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History.com. " How Are Socialism and Communism Different? "

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31 Jul 2024  ·  Leonardo Ermann , Dima L. Shepelyansky · Edit social preview

We introduce the Ising Network Opinion Formation (INOF) model and apply it for the analysis of networks of 6 Wikipedia language editions. In the model, Ising spins are placed at network nodes/articles and the steady-state opinion polarization of spins is determined from the Monte Carlo iterations in which a given spin orientation is determined by in-going links from other spins. The main consideration is done for opinion confrontation between {\it capitalism, imperialism} (blue opinion) and {\it socialism, communism} (red opinion). These nodes have fixed spin/opinion orientation while other nodes achieve their steady-state opinions in the process of Monte Carlo iterations. We find that the global network opinion favors {\it socialism, communism} for all 6 editions. The model also determines the opinion preferences for world countries and political leaders, showing good agreement with heuristic expectations. We also present results for opinion competition between {\it Christianity} and {\it Islam}, and USA Democratic and Republican parties. We argue that the INOF approach can find numerous applications for directed complex networks.

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Kamalanomics, Revealed: A Solid Center-Left Agenda

By Paul Krugman

Opinion Columnist

On Friday, Vice President Kamala Harris gave her first big economic policy speech as the Democratic presidential nominee. It was, of course, very different from the “economic” speech and news conferences Donald Trump has held in the past couple of weeks.

For one thing, Harris actually outlined her economic proposals, rather than veering off onto topics like who has the biggest crowds and how windmills are killing birds . For another, she doesn’t seem to have said anything demonstrably untrue — a sharp contrast with Trump, who lied or distorted the facts about twice per minute during an event at Mar-a-Lago.

But what about the substance? The usual suspects are claiming that Harris revealed herself to be an extreme leftist. Even some middle-of-the-road economic commentators have been hyperventilating, saying that she’s essentially calling for price controls, which is odd, because she didn’t say anything like that.

All in all, Harris staked out a moderately center-left position, not too different from President Biden’s original Build Back Better agenda, which he was able to implement only in part because in an evenly divided Senate, Joe Manchin had an effective veto.

So let’s go through the substance, working off a fact sheet released by the Harris campaign, which provided more detail than the speech itself.

The most important and, as I see it, best proposal was for the restoration of an expanded child tax credit , which the Biden administration implemented in 2021 but expired at the beginning of 2022 because Democrats didn’t have a big enough congressional majority. This credit significantly reduced child poverty while it was in effect; Harris would supplement it with an even bigger credit for families with children in their first year.

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