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Market vs. Demand. Now it is time for the final comparison between the two major economic systems which happen to be big ones in the world today the capitalist free market economy and the communist/socialist command-based one. We shall go about this comparison by going through a list of basic topics and questions required for setting up an economy, and provide the typical demand and the typical market response for them in the end, that is the true way to fully comprehend both systems. The first question that needs to be answered in the creation of an economy is "what shall be produced?" Every individual has a certain amount of needs and a certain amount of desires, which they are all in the end willing to work for in a capitalist economy, the government leaves the meeting of these needs to the actual people. The theory is that anyone who wants to succeed in a capitalist world, driven by Adam Smith's "invisible hand", will eventually discover these needs that need to be met by the people and sell them, mainly for the good of the entrepreneur himself, but ideally (you'll hear that word a lot during this comparison) for the good of the consumers and the employees as well basically, if you know that people want a certain product, you know that people will buy that certain product, so you can guarantee your own success as well as the fulfillment of those consumers in need (which is usually a secondary motive). Demand economies, on the other hand, do not believe in such private profiting rather, they assign a branch of the government as a "central planning committee" which decides what goods and services the people are entitled to. In a perfect world, this would work perfectly, and everyone would end up getting what they wanted unfortunately, in more cases than not this central planning committee is too disconnected from the laborers they are providing for to know exactly what is in demand and what is not needed if, for…
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The Cold war afflicted Communist Ideology. It was a war unlike any other. The cold war…
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Communism is when people can’t own anything (e.g. Companies, land, homes) but instead the government own it all. A Capitalist environment is when people CAN own something.…
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One of the first and major differences between a Communist and Democratic government is their contrary economic systems. In a communist government, the community owns the major resources and means of production. The goal of such a system is to prevent any one person or group of people from becoming very rich, while others are extremely poor. The system attempts to eliminate lower class by balancing the wealth between rich and poor, therefore giving everyone equal pay and ownership. Unfortunately, this results in an increased lower class. People can organize their own businesses and receive their own profits if it succeeds or debts if it fails. In this system, the harder a person works, the more money they receive, allowing them to make ends meet.' The downside to democracy is that people can get a high paying job through education, but may work just as hard at a lower paying job and receive less money. Generally, Democracy's seem be more successful economically.…
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Communism gives everyone equal opportunity to make money and create a self-sufficient nation, increasing a country’s overall employment and productivity. Furthermore with a larger workforce, a company can produce at a far more efficient rate in order to satisfy the needs of a growing market. In theory Communism provides the solution to all the economic, and social issues and divisions that create conflict within…
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The command system, which is also described as Marxism, socialism, or communism, is both a political and economic philosophy. In a communist economy, the government owns most of the firms, subsequently controlling production and allocation of resources. One of the most well-known and well-documented cases of a communist government took place in the Soviet Union, beginning in 1917 and eventually falling in 1992. Idealistically, communism eliminates social classism and provides equal work for all in a particular society. The government appoints a central planning board to “determine production goals for each enterprise and to specify the amount of resources to be allocated to each enterprise so that it can reach its production goals.” In theory, communism attempts to create an egalitarian society. However, due to its detrimental effects on the economy and the quality of life of the working class, the Soviet Union’s communist government failed to prosper.…
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Communism - state ownership of the means of production, and the belief that wealth should be shared.…
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When thinking of Communism, one may picture Nazi Germany or Soviet Russia. In reality Communism is meant to be so much more than an authoritarian government ruled by harsh dictators. Socialism, Communism’s predecessor, is essentially just a form of economic standards. Communism sprang forth from Socialism when greedy Socialists wanted more than just enough to get by and thirsted for power. It calls for extreme Socialist ideals with a reconstructed government and economy.…
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Secondly in a Communist economic system people are never unemployed because the government owns the means of production. Meaning the governments owns all the factories and stores because their is no private owner ship in a Communist system. This is good because the government can control and decide what is needed for the good of society and produce it.…
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Communism and capitalism are two forms of government that are vastly different but used by many nations. The United States and the former Soviet Union were ran by two economic systems that were on two different sides of the spectrum because of how vastly different they were. The Soviet Union used a political system that would allow government to control everything, including the means of production, where people were allowed to live, and even what career people were allowed to go into to. Communism is a political system that controls every aspects of the lives of every citizen that has to live under that government. The Soviet Union thrived with this system for as long as it possibly could, but ultimately it collapsed. After the Soviet Union’s…
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Capitalism is when individuals, not government, are in charge of production and can profit from their labor, and communism is when the state makes all economic decisions. The key difference is individuals take the production of goods and services in capitalism unlike in communism where the state establishes all production and economic goals, in communism the state controls all aspects of economy.…
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Communism additionally has a vast effect in economy. Communism works with the idea of putting the greater part of the power in everybody's grasp, but then being controlled by a world class few. The benefits are altogether collected and as far as anyone knows uniformly conveyed all through the country. Be that as it may, as a rule, the administration keeps more than what's coming to them, and is unwilling to change to an alternate technique for overseeing. In the primary years of the comrade time, there was an expansion in the economy. This was a result of the accomplishment in expanding the proficiency of all horticultural and creation territories, including the initial five year arrange objectives being…
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Capitalism is an economic system in which the factors are privately owned and money can be invested in businesses to make a profit. Socialism is the factor of production is owned by the public and operate for the welfare of all. Lastly, communism is a form of socialism. Communism allows people to own land, mines, railroads, businesses, and factories. All three practices are trying to better their citizens. These three practices compare and contrast in many ways.…
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Communism also reduces your citizen’s incentive to work hard. In a communist state everyone acquires the same amount of money. This is good for the facilitation of the state. Although, due to this lack of incentives the people who work a more difficult job will most likely lose motivation rather quickly. This lack of motivation will be evident in their work. You will slowly see a decrease in work effort and in the overall performance of your citizens. This will severely hurt your countries ability to create high quality goods and new technologies. In turn the lack of incentives will leave your country in a frozen technological stone…
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In capitalism, any individual can go out and sell goods or services at his own price, and can sell as much as he wants too. Whereas, in a communist state, the goods are services are provided by the government and priced by the government. To be an entrepreneur you have to be able to take risks, work hard and be able to handle the outcome whether you lose or win. You don't have to worry about losing in a communist country because you are assigned everything and given everything from money for school and college to medical care to food and shelter. In fact, in a communist country everyone is treated the same and it doesn't matter if you are a doctor or a janitor, everyone is equal. You do not have to worry about the market failing and you losing everything you have because everything is provided for you. A capitalist…
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