Pros and Cons of Capitalism vs. Communism
Before making judgements upon whether or not capitalism or communism is positive or negative, we must first understand what each term means. Capitalism is defined as “a way of organizing an economy so that the things that are used to make and transport products are owned by individual people and companies rather than by the government” (Openstax, 2016, pg 82). Communism, on the other hand, is “a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned.” The main differences between the two are the means of production. With communism, the community owns the resources, and in capitalism, the resources lay with a private owner. source.
There are pros to capitalism, contrary to how it is viewed/presented. The ideal capitalist economic model has a lack of government intervention, which in some aspects, is beneficial. This allows for means of production to be owned privately, and for the products and goods of farmers and merchants to be distributed privately, rather than by the government. Political freedom is also a positive aspect of capitalism. This freedom could thereby lead into other aspects of life- such as economic freedom. Economic growth is also a benefit of capitalism. With wealth produced by individual control of product comes a higher standard of living. source.
Though there are pros to capitalism, there are also cons. The most interesting fall to capitalism is that of wealth inequality. People do not have equal opportunity, but rather are born into the privileged class- by inheriting wealth. This thereby creates social inequalities, and social division begins to occur. With a capitalist society also presents a term called the “boom and bust cycle.” With no government guidance, the economy booms and busts, leading to high rates of unemployment and economic downfall. source.
Communism also has pros. Classes are nonexistent within a communist system, with equal access to things such as health, education, etc. without any ruling elite. Unemployment rates thereby decrease, as everyone has to contribute to society. The people of a communist community have equal access to jobs and are provided with basic needs. Though debatable, dictators can also be a pro to communism. Though many dictators have higher living accommodations, they are said to have the best interest of the community. source.
Like capitalism, communism has cons as well. The fueling of poverty is a big con within communism. The lack of growth industrially leads to little cultural and technological growth. It also sometimes overpowers the voices of the people, stifling their freedoms. Also debatable, some say a negative aspect of communism is that it can be corrupt due to dictatorship. Dictators often live in royalty rather than being equal to the citizens of their community, when they claim to ensure equality among all inhabitants. source.
