Capitalism and Communism

Capitalismand Communism

TheTwentieth Century was marked by the strongest ideological rivalry inthe world that was antagonized by the economic and politicalideologies. The two antagonistic ideologies were capitalism dominatedby Americans and communism on the socialist dominated by Russians.While the two ideologies are political and economic in nature, theyhave unique features that differentiate each from the other (Romanand Loebl 169).The discussion about these ideologies will compare and contrast themwith a view to understanding the distinct feature that relate to eachof them.

Capitalismis the ideology where economic resources are owned by individuals.Economic resources such as land, industries and capital are in thecontrol of individuals and not the government (Fulcher2).While the government can also own public resources, private ownershipis the main feature of the ideology. On the other hand, communism isthe ideology that has economic resources owned by the state.According toHolmes(23), communism does not allow individuals to own economic resourceslike land, productive industries and capital on a private basis.Under communism, all the economic resources are owned and controlledby the state, which has total authority over the economic resources.

Thefreedom of ownership is one of the differences that create a riftbetween the two ideologies. While capitalism gives the freedom to ownproperty and produce resources to the individuals, capitalismreserves such freedom fully to the state. As a result of thediversity, the private sectors of the countries with these ideologiesare significantly different. In the United States, the freedomprovided to the private sector led to the economic developments thathave led the nation to be a superpower in current time (Romanand Loebl 170).On the other hand, the limitation of such economic freedom crushedthe private sector in countries like Russia that had communism. As aresult, the difference of provision of freedom between the twoideologies makes all the difference.

Theeconomic difference between the two ideologies is further determinedby the determination of the producers, owners and consumers in themarket. Capitalism leaves the market to determine who produces goodsand services by allowing liberalization of prices and quantitiessold. On the other hand, communism reserves that right to thegovernment, which controls important economic activities (Fulcher24).Therefore, the government influences the prices and quantities thatare available in the market. While capitalism leaves the market todetermine what to produce and who to produce, communism left thegovernment to determine the variables by being the producer(Holmes28). Under communism the government produced what they decided to andto the population the state preferred.

Anotherunique contrast between the two is the access to services and utilityresources. While in capitalism the market decided who accessed whatand at what cost, communism gave the state the authority to decideaccess to services (Romanand Loebl 172).As a result of the disparity, the economic variations between therich and the poor are different between the two countries. Because ofcapitalism, the rich people in capitalistic countries are at freedomof their money to access any resource or service. However, communismprovides such services to citizens and decided who access certainservices and resources and those who do not(Holmes38). Therefore, the disparity in service delivery under communism isnot as pronounced as it is under capitalism.

Despitethe differences, communism and capitalism are both politicalideologies that have impacts on the economic environment of acountry. They both rely on the political systems to thrive in thesociety and impact on a country. While their impacts are different,they both dictate the policies that a government will take. The twoideologies, both determine the type of economic policies adopted byeach country. While communist countries centralized economic decisionmaking, capitalist countries adopted liberalist policies that gavefreedom to the private sector(Holmes46). The differences reflect the impacts that each ideology had onthe society through adoption of economic policies.

Anothersimilarity is that both ideologies relate to their focus on theprovision of services to the people. Despite having different ways ofachieving the provision, they are both focused on the people and howthey relate to the state. Capitalism is concerned with freedom ofpeople to own resources and provide services for themselves andothers (Fulcher35).At the same time, communism is concerned with the responsibility ofthe government to provide the services to the people. Through thepursuit of the similar role of service provision to people, the twoideologies take different perspectives.

Whilecapitalism and capitalism are both political ideologies, they havedistinct differences. Capitalism is attributable to the developmentsbecause of the freedom of ownership and control of economic resourcesleft to the private sector. On the other hand, communism strengthenedgovernment’s control of resources. The concept of communism seemsto be alienated from reality of equitable distribution of resourcesin relation to economic efficiency. It is only fair for those who aremore efficient in the economy to control more. The two ideologies aredifferentiated by their application and the impact on the social,economic and political setup of the countries that adopt them.


Fulcher,James. CapitalismA Very Short Introduction.Oxford: Oxford University Press, 2004, Print

Holmes,Leslie. Communism:A Very Short Introduction.Oxford and New York: Oxford University Press, 2009, Print

Roman,Stephen and Loebl, Eugen. Alternativeto Communism and Capitalism. NewDelhi: Abhinav Publications, 2013, Print