Communism or Capitalism?

Figure 1. Adam Smith and Karl Marx Boxing[5]

Neela Houshmand-Period 6

In communism, the resources or the means of production are either owned by the society or the community itself whereas in capitalism the resources or the means of production are owned by a private owner.[1] However, which economic system is considered to be the most efficient? Both economic systems focus on how best to allocate goods and services to the population. Capitalism uses free markets and democracy to best allocate capital in the most efficient way and ignores economic equality whereas communism focuses on state-run economies allocating all the resources and distributing them equally among the people.

Karl Marx argues that “Communism deprives no man of the power to appropriate the products of society; all that it does is to deprive him of the power to subjugate the labor of others by means of such appropriations.”[2] Marx is saying that communism does not take away man’s ability to work, but also that man cannot take advantage of other people’s work by not working. Marx essentially believes that communism does not disincentivize man’s ability to work. Even though communism’s principles might sound attractive since everyone receives the same amount, problems still arise. However, a communist society allows little to zero incentive to work harder in order to make a better life for yourself because everything is distributed equally. You could be a high-class surgeon and still receive the same amount of money as a busboy. You would never really have the chance to become a millionaire in a communist society. Communism has been experimented in several countries and the system has always been taken too far by a dictator. For example, after World War II, North and South Korea were created leaving the North communist and the South capitalist. Today, under the rule of Kim Jong-un, “North Koreans are the world’s most brutalized people. They endure severe restrictions on political and economic freedoms.”[3] Communism’s principles may seem fair, but when actually put into place, it fails to reach its goal.

Moreover, capitalism offers a greater incentive than communism. Adam Smith, the father of capitalism, “held that individuals acting in their own self-interest would naturally seek out economic activities that provided the greatest financial rewards.”[4]Because you do not receive the same amount of wealth as everyone else in a capitalist society, capitalism allows the worker to work harder and create better things in order to be more successful. In a capitalist economic system, people have the incentives to work in order to be richer. Humans are by nature, greedy, and if we want to achieve something usually involving more money, then we will go to higher extremes in order to attain it. In regards to capitalist countries, South Korea undergoes a capitalist system “where legal conditions safeguard free and uncoerced exchange of goods and services.” Today, South Korea is a first world country whereas North Korea falls behind as a third world country. Capitalism pays off in the long run and incentivizes one person to earn higher profits by working hard which also benefits the mass population as well.

Overall, capitalism offers a higher incentive and proves to work in countries who have capitalist economic systems whereas communism seems to have better principles, but tends to not work efficiently and correctly in communist countries.

[1] Prabhat S, “Difference Between Communism and Capitalism,” Difference Between, May 19, 2011, Accessed April 30, 2017,

[2] Karl Marx, Manifesto of the Communist Party, 3.

[3] James Wanliss, “Socialist North Korea and Capitalist South Korea: An Experiment We Ignore at Our Peril,” The Stream, June 8, 2016, Accessed April 30, 2017,

[4] William Welch, “Adam Smith: Capitalism’s Founding Father,” Vision, Accessed April 30, 2017,

[5] Louis Even, “Capitalism versus Communism,” Michael, January 1, 2010, Accessed April 30, 2017,


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