Capitalism Vs Communism

The primary difference explained in capitalism vs communism is that capitalism is an economic system that allows private ownership and promotes the idea of a free market; in contrast, communism favors collective ownership and restricts the free market with government intervention portraying a planned economy.

While pure capitalism in a country represents a free market economy, the elements of communism are easily seen in command economies. Furthermore, capitalism motivates entities to work hard and innovate to make a profit, whereas communism does not emphasize or focus on providing an incentive to trigger hard work.

• The primary difference between capitalism and communism emerges from the ownership of factors of production. In capitalism, it is owned by individuals, whereas in a communist nation, the ownership lies in the hands of the government.
• Capitalism exhibits private ownership, profit motive, minimal government intervention, competitive market, capital accumulation, class system, etc.
• Communism exhibits common ownership, central planning, no competition, classless society, etc.
• In the socialism vs. capitalism vs. communism debate, socialism and communism oppose capitalism and stand to attain collective ownership and equal distribution of resources. Furthermore, socialism additionally allows individuals to own properties, unlike communism.

Capitalism Vs communism are two different political and economic ideology that has been existing in the global history for a long time. They are two separate approaches that are used to organize the social, economic and political method of distributing resource and wealth.

In the system of capitalism, the means of production is privately owned. The business and industries operate with the aim of making profit. This system depends on the market forces of demand and supply to fix the product prices, where the main criteria is consumer choice and their willingness to pay for the products available in the market. Due to high competition, the factors concentrate on improvement of efficiency and innovation. However, this often leads to disparity in income and wealth.

In case of communism, there is a classless society where the factors are commonly owned and allocated as per the ability and need of consumers. There is no private ownership at all and there is no reliance in demand and supply because everything is fixed by the government. However, even though there is equality in the resource distribution it is not based on individual contribution.

However, it is essential to note in the capitalism vs communism debate that no country has taken the path of complete capitalism or communism. Most countries have taken up a mix of both so that there is a balance between efficiency, welfare, and freedom.

The comparative table below shows a comparison between the two concepts is detailed manner using various criteria like the invention of the concept, the goal, various forms of both,level of government intervention, essential features, etc. These criterias in the capitalism vs communism debate help in understanding the concept clearly.

Capitalism occurs when people are allowed to own and control capital assets, use them according to their self-interest, and earn profit by producing valued goods and services utilizing capital resources. In a capitalist economy, government intervention will be minimal; hence, the production of goods and services is driven by supply and demand. It creates an environment that promotes individualism, innovations, competition, efficient allocation of resources, the efficiency of the private sector, presenting consumers with better choices, and improving living standards. capitalism vs communism.

On the other hand, capitalism is often blamed for favoring the rich. The opponents of the system advocate that in capitalism, the rich get richer and the poor get poorer instigating the unequal distribution of wealth and inequality, creating social division. Moreover, in the wake of producing profit, the capitalist model exploits the workers, and unfair competition can also lead to the emergence of monopoly in specific sections. All these disadvantages communicate the need for the reformation of capitalism.

Communism ideology aims to establish common ownership and eliminate the private property concept. It simply focuses on replacing private ownership and introducing state-owned organizations, projects, resources, and properties, ensuring economic equality and fairness. Such economies work towards achieving social development, the welfare, and the overall development of all the citizens of a nation.

China has long been a significant example of a communist government where the government-controlled major resources, funds, products, and services, but later due to globalization and certain other aspects, has started implementing some elements of capitalism to grow business and take advantage of trade opportunities. Similarly, it has been observed that many nations turn their heads toward capitalism to obtain more opportunities, attain industrialization, and reap the benefits of globalization hence strengthening the capitalism vs communism debate.

Capitalism and communism are inherently contrasting concepts. While capitalism propagates individualism, communism is associated with collectivism. Industrial capitalism was popularised in the 18th century, and modern communism was propagated in the 19th century.

The instances reflecting the conflict based on these ideologies were prevalent from the old times. For example, ideological conflict, capitalism vs. communism in the Cold War of the 20th century. During the Cold War, the United States and Western European nations were based upon capitalism and democracy. In contrast, the Soviet Union was based upon communism and dictatorship, and Eastern European nations were under Soviet communist control. Many of the significant events in the Cold War contributed to explaining whether capitalism was better than communism or not.

An infographics below shows the difference between the two in a concise manner, making it easy to interpret and remember. Therefore it shows capitalism vs communism simplified and clear.

Here we find capitalism vs communism simplified and similarities are shown clearly.  

• Communism and capitalism can result in an improved living standard for the people.
• Capitalism vs Communism explanations indicates that the foreign trade policies differ in both systems. However, both utilize globalization.

Both the concepts of communism and capitalism are forms of social organizations that are related to industry, trade and economy. They discuss the concept of property ownership, either by the government of private owners.

However, just as every concept has positive and negative sides and effects, same is the case with the capitalism vs communism activity. It is necessary to understand the effects of both clearly. In case of capitalism, there is private ownership or resources, leading to a profit motive, which again promotes innovation and economic growth. Since consumers have a wide range of choices, there is more competition, and which may lead to innovation but at the same time over utilization of resources. There is personal freedom in the process of decision making, which allows people to exercise choice, creativity, skill and knowledge, but personal choice may be prioritized rather than social welfare.

But in the case of communism, there is no income disparity, and resources are evenly distributed, but individual contribution is not looked into. But there is an expectation of community feeling and collective responsibility towards each other. It is not easy to point out any system as better than the other since both capitalism vs communism activity have pros and cons. Their effectiveness depends on the economic situation, implementation method, and cultural, political, and historical factors.

This has been a guide to what is Capitalism Vs Communism. We explain the differences with examples, which is better, their similarities & comparative table. You can learn more about them from the following articles – 

• Conscious Capitalism
• Fascism Vs Socialism
• Communism vs Fascism