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The ideology was being put forward as being better than capitalism in many ways until the bubble burst and economies of the communist countries failed one after another. Communism is a political system where land and other resources are under the control of the state, which is the society or the people in effect.
No one having control over the means of production implies that everything is shared by all in communism. There are equal wages for all, and no one is richer or poorer than others are.
Thus, individual enterprise is discouraged and never allowed to bloom in communism. This is simply because communism wants to see a country where all the people are equal; not a country where a handful of wealthy enjoys life while most starve. The level of freedom people enjoy is less in communism. This is because, in communism, the society is always above individuals.
The government regulates the economy in communism. Moreover, in communism, it is the state that decides the prices of commodities keeping financial interests of the people in mind. In communism, no matter how much a person works he continues to get the same share.
He cannot think about moving up as everyone is treated equally. The first was dominated by the figure of Mao Zedong. Mao defended a revolutionary vision of communism. In his view all aspects of society, culture, economy and politics should be at the service of the ideological cause.
In turn, Mao reacted by launching intense campaigns of ideological reaffirmation. Their effects on Chinese society were felt for a long time. A pragmatic leader who put an end to revolutionary policies while maintaining the centralist and authoritarian character of the State. He was the one who launched a series of reforms that initiated a process of intense economic growth in China.
Capitalism is a social and economic system based on the free market, the right to private property. It is guided by the profit motive. In this system, the main means of production is capital itself, in the form of money or credit.
Capital enables the production of goods and services in accordance with the laws of supply and demand. Unlike communism, capital accumulation is not understood as a harmful effect on social structure. For this author, the possibility of profit accumulating capital increases production and consumption. Thus, an invisible hand guides individuals to attainable the common good.
In the context of free markets, the invisible hand would make producers offer increasingly better quality products at lower prices. Thus, generating a virtuous circle of production and consumption, supply and demand. Capitalism also differs from communism in that it does not have a well-defined social, political and economic structure. On the contrary, there are several distinct capitalist models. For example, welfare states with Laissez — faire economic systems and neoliberalism.
A welfare state means that a government guarantees the minimum basic rights for a dignified life to its citizens. The welfare state also allows free association between people and the free market. To some extent, most Western Democracies are welfare states. Factors of production Privately-owned State-owned Preference to Individual freedom Society Market Free and Competitive Absence of competition with State-owned market Individual Incentives Profit and wages depends on the person's ability and willingness to work Profits not allowed.
Workers are pushed to work for the fame of the state. Capital Sources Invested by owners which may be borrowed. It may be reinvested out of profits earned. Depreciation Legal No depreciation Labour Workers are free to select the employer and occupation State determines one's employer and employment.
Business Individuals have the right to own business All the productive capacity including communes are owned by the state. In this system, the determination of production and price of the goods and services are done by the market, i. 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. A form of socialism, in which the means of production, resources, and property are owned and controlled by the egalitarian society, i. 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.
The following points are noteworthy so far as the difference between capitalism and communism is concerned:.
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