Kommunism vs kapitalism
Prakhar Gajendrakar. Pallabi Banerjee. 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. 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.
Difference Between Capitalism and Communism
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.
Capitalism Vs Communism
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.
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.
What's the difference between communism and capitalism?
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.