Russia, China, Cuba, Vietnam, North Korea, and Laos.
Communism is a type of government and philosophy. Its goal is to form a society where everything is shared equally. All people are treated equally and there is little private ownership. In a communist government, the government owns and controls most everything including property, means of production, education, transportation, and agriculture.
History of Communism
Karl Marx is considered the Father of Communism. Marx was a German philosopher and economist who wrote about his ideas in a book called the Communist Manifesto in 1848. His communist theories have also become known as Marxism.
Marx described ten important aspects of a communist government:
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No private property
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A single central bank
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High income tax that would rise significantly as you made more
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All property rights would be confiscated
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No inheritance rights
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The government would own and control all communication and transportation
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The government would own and control all education
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The government would own and control factories and agriculture
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Farming and regional planning would be run by the government
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The government would tightly control labor
Communism in Russia
Communism began in Russia with the rise of the Bolshevik Party led by Vladimir Lenin. They led the 1917 October Revolution that overthrew the current government and took power. Lenin was a follower of Marxist philosophies. His views on government became known as Marxism-Leninism.
Russia became known as the Soviet Union. In World War II Russia sided with the Allied Powers in order to help defeat Germany and Adolf Hitler. However, after the war the Soviet Union took control of several countries in Eastern Europe. They became known as the Eastern Bloc. The Soviet Union became one of the world's two superpowers along with the United States. For many years they fought the west in what is today called the Cold War.
Communist China
Another major country to be ruled by a communist government is China. The Communist Party gained control after winning the Chinese Civil War. The communists took over mainland China in 1950. Mao Zedong was the leader of communist China for many years. The type of communism in China at the time is often called Maoism. It was also heavily based off of Marxism.
Actual Results
The actual results of communist governments have been nothing like the theories of Marxism. The low class people that were supposed to be helped by Marxism, were treated horribly by the leaders of the government. For example, it is estimated that Soviet Union leader Joseph Stalin had over 40 million people murdered for the "good of the state". Stalin created labor camps for anyone who disagreed with the government. He even created famines in order to break the will of the people and gain total control.
Communist states generally have much less freedom. They prevent the practice of religion, order certain people to work certain jobs, and prevent people from moving around or moving to other countries. People lose all rights to ownership and government officials become incredibly powerful.
Interesting Facts About Communism
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Many concepts of communism were included in Greek philosopher Plato's Republic.
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Other communist countries include Cuba, Vietnam, North Korea, and Laos.
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The Chinese government has been under fire for years for human rights violations. This included many executions, detaining prisoners without trial, and wide ranging censorship.
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In the era when Mao Zedong ruled China the poverty rate was at 53%. However, China began economic reforms moving away from communism in 1978 under the leadership of Deng Xiaoping. The poverty rate was down to 6% in 2001.
The most capitalist country in the world is Hong Kong followed by Singapore and Australia. The United States ranks 12th.
Capitalism is a type of economic system where business is privately owned and run by the people, rather than by the government. This is different from a command economy like communism where the government controls business.
Another name for capitalism is the free-market system. The "free" in free-market system means that the market is free to work itself out without government intervention. Businesses can decide what products to make and how much to sell them for. People can decide what products to buy and how much they want to pay.
Supply and Demand
One of the basic ideas of capitalism is the idea of supply and demand. Supply and demand says that the price of a product will eventually settle at a point where the demand for a product will equal the supply of a product. This way the market will find the perfect price and volume of a product. This is different from a command economy where the government might set the price and volume of a product.
Adam Smith
The idea of the free-market system was first introduced by Scottish economist Adam Smithin 1776. He wrote a book called The Wealth of Nations that described how a free-market economy would work. He said that government should stay out of the economy and let pure competition determine pricing and products.
Modern Capitalism
Modern capitalism is somewhat different than what Adam Smith described. Today, many countries have a capitalist economy, but the government takes an active role in stabilizing the economy and providing regulations to protect the public. This type of economy is called a mixed economy.
For example, the United States is considered a capitalist economy. However, the government has all sorts of laws to monitor businesses and the economy. There are laws against monopolies, regulations to make workplaces safe, anti-discrimination laws, regulations to protect the environment, taxes to redistribute wealth, and Social Security to help the elderly. Although much of the economy is run on capitalism, the government is very much involved.
Pros of Capitalism
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Efficiency - Capitalism forces companies to compete for business. This competition makes companies be more efficient.
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Freedom - People and companies are free to do what they want in a capitalist economy. Governments in a capitalist economy have less control and less power. This leads to greater political freedom.
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Innovation - In a capitalist economy, people and companies are rewarded for innovation. This leads to greater technological advances.
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Economic Growth - Capitalism leads to economic growth and a higher standard of living.
Cons of Capitalism
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Social inequality - Capitalism can lead to an unfair distribution of wealth with a few people holding a significant amount of the money.
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Monopolies - Capitalism can create powerful monopolies where one company can control pricing and supply without government intervention.
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Bad labor conditions - Capitalism can lead to unsafe work conditions and unfair wages for the working class.
Conclusion
A mixed system of capitalism with some government intervention can enable economic growth, freedom, innovation, and efficiency. Government intervention is needed to prevent monopolies, social inequality, and poor labor conditions.
Interesting Facts About Capitalism
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Most countries in the world today have a mixed form of capitalism with varying degrees of government regulation. There are really no countries that are purely capitalist.
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Although China has a communist government, much of their economy today is based on capitalism.
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According to the Heritage Foundation's 2014 Index of Economic Freedom, the most capitalist country in the world is Hong Kong followed by Singapore and Australia. The United States ranks 12th.
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An important characteristic of capitalism is private property.