Capitalism and Communism

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Capitalism and communism are two terms that will remain to be different in their political and at the same time, economic ideologies. Therefore, in other words, capitalism and communism will never be together. One of the major known difference between capitalism and communism is in the regard of the resources and the means of production. In communism, the community or the society owns the resources or the means of production. However, for the sake of capitalism, the resources or the means of production lies with the private owner.

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Besides, the profits of every individual involved in communist are shared equally, but in the capitalist, the entire profit belongs to the private owner of the resources and the production. For the communists, the society is above the individuals while on capitalist, the freedom of the individual is the society or the state. Therefore, about both the communism and capitalism, they can never match, and they will continue to be different always. Concerning the cases of Hernando Desoto, on the mystery of capital and at the same time, Richard McGregor, the Party: the secret world of China’s communist rules, there will be the analyzing the actual differences between the two elements and how they have affected the growth of nations across the world.

Hernando DeSoto is a name that crops up in the regular readings related with development. Therefore, concerning Desoto, something else is necessary for the capitalist economy to be in a position of production of wealth. According to Hernando, the capitalist nations will not be able to produce wealth if they are not able to come up with a formal system of property rights. The right of owning properties is much important, and it should not be realized to specific individuals in the countries. There is the need for fairness and ensure that each person in a nation has the capability of owning properties whenever he or she wishes (Woodruff & De Soto, 2001).

He claims that the poor are not without the assets; this is because they have homes and farms. Therefore, the difference between the developing countries and the developed countries is that the latter have structured and established property rights as compared to the former, which have informal and local ownership of resources. According to Hernando, there is the need of integrating the extralegal agreements into a unified formal property right system and that the world poor is mostly realized due to the creation of fictitious commodities. Therefore, lack of establishment of the ownership of properties rights is what the capitalists’ nations will make them not wealthy.

Additionally, there are the five mysteries of capital about the analysis of DeSoto. The five secrets include the mystery of missing information, the mystery of capital, the mystery of political awareness, the missing lessons of the United States history and at the same time, the mystery of legal failure. These are some of the things that will make the capitalist nations remains not wealthy.

Firstly, there is the mystery of the missing information, and according to DeSoto, there is the dead capital. Therefore, when the poor could be in a position of realizing the dead capital into a live capital, they will be in a position of realizing their goals in life. According to Hernando, eighty percent of the world is considered weak. However, eighty percent majority of the people of the world are not poor.

There is numerous wealth that exists, but the poor lack the possession and the ability to produce the additional values from those possessions. Therefore, the eighty percent are still surviving all through. Therefore, even if they are the capitalist nation, they will not acquire wealth due to increased number of individuals who are poor.

With the mystery of capital, there is the need of coming up with solutions of the property rights. The poor will only remain wealthy if they are in a position of gaining the right of owning properties. Therefore, there is the need of making people accountable for their act. Besides, there is the mystery of lack of political awareness. There is the need of the government be in a position tapping into the potential of the poor. This is because, even if we have a capitalist nation and the poor remain poor, there is no creation of wealth (Diaz & De Soto, 2002). Therefore, in relation with the mysteries realized by Hernando, there is the indication that there is something missing for the capitalized nations and there is the need for determining these issues for them to remain wealthy in the end.

While the China’s government may be officially communists, the people of Chinese have been in a position of expressing the widespread of the support of capitalism. It has been estimated that more than three- quarters of the Chinese, people have been in a position of agreeing on the free market economy. Currently, the Chinese have remained the strongest proponents of the capitalists as compared to other countries in the world, including Americans and the western Europeans.

In the past thirty years, there have been increasingly changes in the economy of China. The government of China has been in a position of allowing or opening the economy of foreign investment and at the same time, privatization. With these changes in China, there has been increased economic growth in China, and the country has been rated the biggest economy in the world currently. The economic situation of the Chinese economy has enabled the country to remain happy all through due to their economic situation and the optimistic about their future.

The extent that the Communist China has that something else includes. Even though the country is changing from communism to capitalism, there have been some elements of communism that have enabled them to remain more successful as compared to another country. Firstly, the country has increased friendliness with other nations, and they have increased their opportunities in setting their companies in the country with the agreement that they will be in a position of engaging the people of China as employees. Therefore, such situation has enabled the people of China to be in a position of creating wealth as employees.

Additionally, there has been increased reform in China, due to the introduction of productive forces. China has remained one of the most economically stable countries in the world due to its reformation, and it has increased the necessity of capitalism for economic growth. Therefore, even though the country is regarded to be communism, it has been in a position of employing capitalist elements for the benefits of the country (McGregor, 2010).

Additionally, there has been increased creation of the socialist market economy in China. The Chinese government has capitalized the usage of the socialist market economy because there was the need of the market relation to developing a socialist economy. What is much importance of the socialist economy or system is to ensure that there is the dominant position of the public sector? Therefore, due to the involvement of the communist economy, the country has been able to acquire the elements of capitalism, and it has enabled the country to become one of the economic growth in the world surpassing the United States of America.

Milton Friedman indicates that the free markets combined with the government that is in a position of following the policy of do nothing can be able to produce prosperity and at the same time, freedom. According to Hernando, he claims that capitalism cannot make a country to remain successful since there is need of something else for success to capitalize in a country. However, in a case of China, the country have remained successful always because exercising in a free economy or market and at the same time, due to the creation of peaceful political societies that is always capitalized with the respect of other individuals rights and be able to ensure that there is the personal freedom.

In Chinese country have involved communist as their way of stay. However, they have been ensured that there is a free market in the country and through this, there is increased investment in the entire of China, which is beneficial to the country and its public. However, a state that capitalizes on capitalism cannot remain satisfied all through because there is the lack of freedom and right of ownership of property (Roll & Talbott, 2003).

The dictators in the Communist China will not be in a position of remaining successful in the usage of the capitalist system to produce prosperity. This is because the aim of China is to be able to stay successful in the free markets and growth in their economy. Additionally, there will be increased creation of freedom in the country, and there is the likelihood that dictatorship will end in the country. Therefore, through the utilization of the mystery of capital and the secret world of the China communist rulers, there is the indication that China will remain successful in its operation as a free market economy and there is no possibility that the dictators will use capitalist in staying successful.


Diaz, H. P., & De Soto, H. (2002). The mystery of capital. Why capitalism triumphs in the West and fails everywhere else.

McGregor, R. (2010). The Party: the secret world of China’s communist rulers. Penguin UK.

Roll, R., & Talbott, J. (2003). Political freedom, economic liberty, and prosperity. Journal of Democracy, 14(3), 75-89.

Woodruff, C., & De Soto, H. (2001). Review of de Soto’s”” The Mystery of Capital””.

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Capitalism and Communism. (2019, Jul 02). Retrieved December 4, 2022 , from

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