Difference Between Communism and Capitalism

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Communism is a political and socio-economic ideology based on the abolition of private property and social classes. Capitalism, on the other hand, refers to a socio-economic system based on the right to private ownership of the means of production and free trade in goods and products.

Difference Between Communism and Capitalism
Difference Between Communism and Capitalism

In general, the term capitalism is used generically to refer to structures based on liberalism. Liberalism understands the right to property as a fundamental right, which is the great differential of this model for communism.

In turn, communism is generally understood as a stage after socialism. It is based on the existence of a single social class, the proletariat, and on the extinction of the State.

Communism Capitalism
Meaning Political and socioeconomic ideology that advocates the positive abolition of private property and social classes through the collectivization of the means of production. Social system whose mode of production is based on the free market, on the exchange of goods and services aimed at generating financial value (profit).
Main Features Abolition of private property;
Collectivization of the means of production;
Needs-based production;
Gradual extinction of the State;
Classless society,
Preservation of the fundamental right to private property;
Means of production are understood as a good;
Free Trade;
Production based on the law of supply and demand;
Low or no state intervention in the economy;
Freedom for the global flow of capital with the maintenance of borders between countries.
Main Theorists Karl Marx and Friedrich Engels Adam Smith, David Ricardo and Alfred Marshall
Society Egalitarian, classless in which individuals can devote themselves to nature itself. Individuals free to act in their own self-interest.

What is Communism?

Communism is a political, social and economic ideology based on an egalitarian society, without any kind of social division or class.

It can also refer to the concept of primitive communism developed by archeology. In a prehistoric period, human beings were organized equally within early societies.

However, the most common use of the term is based on the thought developed by Karl Marx and Friedrich Engels. According to them, communism is an egalitarian society, without social classes, obtained through the abolition of private property and the collectivization of the means of production.

This society would take place from the historical development of humanity and the overcoming of capitalism. For Marx and Engels, the end of capitalism would take place through a revolution that would initiate the socialist phase. In it, private property and social classes would continue to exist, but under the command of the working class, the proletariat.

During this period, called the “dictatorship of the proletariat“, a process of re-education and transformation of society took place. Property would be abolished and production would have as its strict objective the satisfaction of everyone’s needs.

From then on, the figure of the State would become irrelevant and could also be abolished, establishing a society where production is common to all.

This stage is summarized in the motto:

From each according to his ability; to each according to his needs“.

In other words, each individual should produce respecting their capacity and receive so that they can supply all their needs.

Thus, communism is understood as an egalitarian society, without classes, without private property, internationalist and without the presence of the State.

Throughout the 20th century, several countries had socialist regimes to a greater or lesser extent. However, none have been able to fully implement the proposals developed by Marx and effectively become a communist country.

What is Capitalism?

Capitalism is a social and economic system based on the free market, the right to private property and for profit.

In this system, the main means of production is capital itself, in the form of money or credit. Capital enables the production of goods and services in accordance with the laws of supply and demand.

Unlike communism, capital accumulation is not understood as a harmful effect on the social structure. On the contrary, for Adam Smith, one of the main thinkers of liberalism, people’s self-interest makes them productive and fit the system.

For him, the possibility of profit accumulating capital increases production and consumption. Thus, individuals are guided by an “invisible hand” to do good for society.

This “invisible hand” of the market would make the offer of products have an increasingly better quality and with ever lower prices. This would make more people consume and increasing the producer’s profit and enabling new investments in production. Thus, generating a virtuous circle of production and consumption, supply and demand.

Capitalism also differs from communism in that it does not have a well-defined social, political and economic structure. On the contrary, capitalism comprises several models that are quite contrasting with each other. As, for example, the welfare state, laissez-faire and neoliberalism.

The Welfare State calls for governments to guarantee the minimum of basic rights for a decent life that enables free association between people and the free market. The laissez-faire (“let you do” in French) has a strong idea that society can organize itself without the need for constant intervention of the State.

On the other hand, neoliberalism preaches the minimum State, the gradual reduction of the State’s presence and the self-regulation of the economy based on market rules.

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