Essay On Capitalism And Communism

710 Words 3 Pages
In a world full of variety and mixed social economies, capitalism and Communism are the most well-known economies. The most attached country to capitalism is the United States, while Communism is mainly attached to Russia and China. Capitalism and communism are both ideologies used in many countries’ societies, however they are different in many ways. The wealth is distributed differently, and the ownership of property differentiates between the two economies.
Capitalism is founded from Adam Smith, a Scottish Philosopher. Smith believed that within a system of markets, individuals respond to the incentive of generating more wealth by specializing their product or service. This theory became widespread and is used in a majority of the world,
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Communism is founded on the principle of a whole populations resources being divided equally. This economy also theorizes the elimination of private property, as stated by Michael Dhar in his article “What is Communism?”. In essence, Communists believe that without ownership of private property there is more equality among the population.
Capitalism is founded upon the belief of individual rights and a free market economy. Kimberly Amadeo of TheBalance.com states that capitalist owners “control the factors of production.” And “derive their income from their ownership.” (Amadeo) These components give the owners the ability to operate their companies efficiently while also giving them the incentive to maximize their business profit.
One of the major differences between capitalism and communism is regarding to the resources and the way the resources are produced. In Communism, the government owns the resources and the ways of production. The people do not own the resources, however they are free to use them. Russia and China decided on a centrally planned economy through Communism that attributes management of the economy by the employees of the
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Capitalism is demonstrated by the people going out and making as much money as they desire if it is earned. However, the working class is stuck making a poor salary while the product they create makes a substantial profit, mostly going to the owners. Dr. Gordon Clark wrote an article called ‘Capitalism and Regional Inequality’ that described capitalism as being “dominated by the interests of individual enterprises.” (Clark) This piece shows that big businesses are only interested in making their profits while letting their own working class suffer with poor

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