Capitalism Vs. Communism: a Comparison

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Many people growing up in the 1980s remember the Cold War between Russia and the United States, two ideologies pitted against each other, a time of tension between the two countries. Baby boomers might remember the Red Scare and McCarthyism. The two economic systems seem to be diametrically opposed. In comparing the architects of the two systems, it is easy to see why there was so much friction between countries that adhered to these economic systems.

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Adam Smith, the father of capitalism, explained his vision of capitalism in the 1700s in An Inquiry into the Nature and Causes of the Wealth of Nations. Jack Russell Weinstein conveys that Smith believed that government should not intervene except on three accounts: to protect its citizens from foreign invasion; to protect citizens from each other and deliver justice; and to maintain property and institutions for the public to benefit from and enjoy. This is a laissez faire approach, with as little government intervention as possible in the market, because Smith believed that the market would govern itself (Weinstein).

This means that everyone has free will to participate in the economic market as they please, and that the forces of supply and demand determine what goods are sold and for what cost. When the supply is plentiful and demand slackens, prices fall, and when demand outpaces supply, prices rise (Comparing Economic Systems). Thus, a working definition of capitalism is, an economic system in which all or most of the means of production are privately owned and operated, and the investment of capital and the production, distribution and prices of commodities (goods and services) are determined mainly in a free market, rather than by the state (Defining Capitalism, Communism, Fascism, Socialism). The end goal of capitalism is to operate at a profit.

These economic goals and forces are not the same in the communist economic system, and were more ideally based. As Foursov observes, communistic ideas are most likely as old as the bible, but came to fruition as the anti-capitalism system (103), a negation of capitalism (108). Communism, then, was born out of response to the capitalist system. Bertel Ollman quotes Marx as saying we do not anticipate the world dogmatically, but rather wish to find the new world through the criticism of the old. Thus, communism is in a sense, born of the old system, capitalism. Marx expressed that communism would be an inevitable movement that would rise and overtake capitalism (Ollman). While Marx’s ideas were an envisioning of the future, the now-defunct economic system operated on principles of community ownership of all property. Since everyone owned everything, in a sense, then everyone would become equal through this universal ownership (Defining Capitalism, Communism, Fascism, Socialism). The first phase of communism, a proletariat state taking over and running society until society was able to make its transition from capitalism to communism, was considered the first phase, and is what occurred throughout the communist states in the world. However, the second phase was never carried out, and led to the collapse of the communist systems throughout the world (Ollman).

Therefore, it is easy to see why the environment was one of fear and trepidation during the time of Communism. Capitalism was the established system that allowed anyone the freedom to participate in the economic market, allow market forces to control the market, and with little government intervention. Today’s capitalism, though, is not a pure form of this system. The government has many programs for the public that help society at large (Defining Capitalism, Communism, Fascism, Socialism). Communism was an ideology that was born out of criticism of capitalism, with its primary purpose to overthrow capitalism in society, and for everyone to own everything in a utopia society. This was not realistic to maintain in the long run. Through comparing the two systems, it is easy to see why the two were enemies from the birth of communism.

Works Cited

Comparing Economic Systems. US, 2018, US

Defining Capitalism, Communism, Fascism, Socialism. University of Idaho,

Foursov, Andre. Communism, Capitalism, and the Bells of History. Review (Fernand Braudel Center), vol. 19, no. 2, 1996, pp. 103-130.

Ollman, Bertel. Marx’ Vision of Communism.

Weinstein, Jack Russel. Adam Smith (1723-1790). Internet Encyclopedia of Philosophy,

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Capitalism vs. Communism: A Comparison. (2019, Jul 02). Retrieved February 6, 2023 , from

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