CAPITALISM |COMMUNISM | |
|Definition: *An economic system based on the private ownership of |Definition: *A social, political and economic ideology that tends | |the means of production (technology, transport, and banking). |to establish a society essentially based on the private ownership of| | |the means of production. | | | | |Historical back ground: *Capitalism came to substitute for |Historical back ground: *Communism appeared in Russia in 1917 then | |Feudalism in the late 18th and early 19th centuries in Europe |extended to China in 1949 and eastern Europe during the same period | |particularly in Britain. Capitalism meant liberalism; it was |it also affected other countries like North Korea, North Vietnam, | |inspired by the Laissez Faire theory of Adam Smith, according to |and Cuba between 1989 and 1990. The founding fathers of Communism | |which the state must not interfere in the economic life. |are Carl Marks and Frederic Angles who published The Communist | | |Manifesto. | |Characteristics: 1) Ownership of Means of Production: |Characteristics: 1) Ownership of Means of Production: | | | | | |*The common ownership of the means of production. | |*The accumulation of capital wage, labour and competitive markets. |*Holding all properties in common and the ownership of the means of | |In capitalist systems investments are determined by private |production is controlled by the community as a whole. | |decisions. |*Government ownership of factories and agriculture. | |*Prices, production and the distribution of goods are also |*Government control of labour. | |determined by competition of free markets. | | |*The state exists to protect individuals’ rights while capitalist | | |are free to decide where to invest, what to produce or sell and what| | |prices to charge. They are also free to operate in locals, regional | | |and international markets. | | | | | |2) Individual freedom : | | | |2) Individual freedom : | |Capitalism puts individual freedom, before society. | | |*Some of the greatest advances in human history have happened due to|Communism asks one to put the society before the individual | |individual creativity and enterprise, which were self serving, |*Communism can kill that individual creative streak, by making a | |though they ultimately benefited the society....
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