Advantages and Disadvantages of Capitalism and Communism There are many advantages and disadvantages to a communist or capitalistic society. According to the American Heritage Dictionary, Capitalism is an economic system characterized by freedom of the market with increasing concentration of the private and corporate ownership of production and distribution means. Capitalism is an internally stable economic system, in that it is consistent with human behavior. People understand that there is no such thing as a free lunch. You have to work to survive, and only the lucky who manage to prosper within the system make it to the top.
Capitalism is also externally stable, in that survival in a capitalistic system requires innovation and flexibility to keep up with the changes in supply and demand. Competition within the system also provides for many advantages. But sometimes under a capitalistic system, those in power tend to construct rules that limit diversity and competition, thereby weakening the flexibility and strength of the system as a whole. There are also many imbalances in opportunity, which may disrupt the proper flow of the system.
Yet Communism is a system, which allows for everyone to be equal. Those that participate benefit and those that don’t are left behind, creating an incentive to participate. Communism requires common goals and agreed upon rules to allocate proper responsibilities and resources. This usually leads to sharing, which builds stronger social communities, creating a stable economy. But there are also many problems with this system.
The Term Paper on Federalism Vs Communism
Definition: Federalism, with its division of power and its democracy, is a better system of government than that of communism. Within a federal government exists a central government, which is split up into smaller divisions in order to keep all the ruling power spread out and not concentrated in one place. Communism, on the other hand, attempts to completely get rid of the government and create a ...
Communistic systems tend to block out external cultures and exclude outside competition, weakening the system’s ability to learn from, or compete with external economies. Also large or geographically broad populations tend to be diverse, making it difficult to maintain a common goal or set of rules for shared effort and resources.
