Lines
Economics 2
25 January 2013
Capitalism, Socialism, and Communism
Capitalism is an economic system that allows private ownership of productions. All that capitalism actually entails is relatively low taxes, and private health care, and small government. Capitalism is simply a system that does not have government control of production (the government does not own the factories, the companies or the processes to produce products. Capitalism is a term of coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Evens). Economic individualism’s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and profits; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international market. Socialism is an economic system that advocates either public or direct worker ownership or administration of production and allocation of resources. Socialism removes production and wage labor as commodities, maximizing the “use value” instead of the “exchange value” – that is to say, real wealth versus phantom wealth. In a socialist economy the worker owns the production means and rights to resources (Defining Capitalism, Communism, Fascism, and Socialism). Generally, socialism refers to state ownership of common property, or state ownership of the means of production. A purely socialist state would be one in which the state owns and operates the means of production. However, nearly all modern capitalist countries combine socialism and capitalism. It is considered to be the transitional phase between the capitalism and communism. Thus, you would find all communists advocating for socialism because it lays the foundations for communism. It advocates an egalitarian society where everyone shares equal wealth and power. There is a considerable disagreement over how the distribution should take place (S, Carlo). Socialism can be said to be between extreme capitalism and extreme communism with it being nearer to communism.
Communism is an economic and social structure that advocates complete public ownership of production and allocation of resources. Communism is by far the most intertwined with political control of classes, wages, and policies to eliminate poverty or wealth gaps. Communism is considered more of a political expansion of the economic system of socialism and has been in the past portrayed as an attempt to create a Marxism utopia through government. Each of these systems has political ramifications in any society that institutes it. However, capitalism and socialism in-and-of themselves are economic systems. More importantly, none of these systems require economic growth. You can easily have privately owned production without a continual expansion of the entire economy. Generally, communism refers to community ownership of property, with the end goal being complete social equality via economic equality. Communism is generally seen by communist countries as an idealized utopian economic and social state that the country as a whole is working toward; that is to say that pure communism. Fundamentally, communism argues that all labor belongs to the individual laborer; no man can own another man's body, and therefore each man owns his own labor (Lenin and Reagan). In this model all "profit" actually belongs in part to the laborer, not, or not just, those who control the means of production, such as the business or factory owner. Profit that is not shared with the
