Communism and Capitalism

Posted: February 24, 2014 in 1. Intro to Economics?
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Capitalism is the dominant economic system today. While there are countries that are still controlled by communist governments their economies are in transition to capitalist (mixed market) systems. While both systems provide mechanisms for distributing resources and satisfying wants they do it in very different ways.

In short, capitalism is marked by private ownership of resources and the use of competitive markets and self-interested individuals to create an efficient allocation of resources. Individuals acting out of self-interest will direct resources in markets to produce an efficient and effective outcome. Markets where there is strong competition will produce a least cost (efficient) allocation of resources in production.

Capitalism and communism are considered to be at opposite ends of the spectrum, especially considering that communism presents the strongest criticism of capitalism.

Communism is marked by the ideal that humans are basically good, however this goodness is suppressed by social structures (feudal, capitalist, etc).  By removing these structures all things would be commonly held (public ownership) for the common good, decisions of what to produce and how much are determined by the central government.

Communism was never thought of as a system that existed in isolation. It was envisaged as the final step in the evolution of human social structures. A final stable (ideal) human system where humans could realise their full potential (goodness). Capitalism is seen as inherently unstable, containing the seeds of its own destruction. A system built on promoting the self-interest of individuals would only seek to alienate people from one another and devalue any community that exists. Just as capitalism had evolved from former structures the ultimate future of capitalism lay in communism.

It becomes clear that the ideal of the inherent goodness of humanity and the ultimate perfection of human societal structures in the present age is at odds with Christian doctrine. Seeking perfection of human community apart from Christ and the persistence of sin in the present age is against the core message of the Bible. It is this fundamental misunderstanding of human nature that caused the fall of communism.

In my next post I will begin discussing capitalism more fully.


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