The Clash of Economic Idiologies

The Grapes of Wrath

Capitalism• Capitalism is an economic system in which

trade, industry, and the means of production are largely or privately owned and operated for a profit.– Private property and making money are

central premises of capitalism.• Central characteristics of capitalism include

capital accumulation, competitive markets, and wage labor.

• In a capitalistic society, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.– In pure capitalism, every person is free to

negotiate on his or her behalf using whatever advantages that s/he has.

– This is often referred to the “invisible hand of the market” which is used to determine to value of goods and services.

Communism• Communism is a socioeconomic system

structured on the common ownership and production. – In a communist system, usually the

state owns all property and businesses and administers it all for the “benefit” of all.

• Communism is characterized by the absence of social classes, money and the state.– In theory, all are equal in a

communist system.• Communism is a social, political, and

economic order that strives to achieve a “utopian” society.– Communism is always striving to

achieve a better world in which all will exist as equals.

Criticism of Capitalism• Capitalism has been criticized on many

grounds, most of which are1. Capitalism makes the rich more

rich and money is not evenly distributed in society;

2. Capitalism exploits workers, the poor, and minorities because they are seen as having less negotiating leverage for their labor;

3. Capitalism leads to inefficiencies and waste because it is not planned, and often businesses over produce leading to economic booms and busts.

4. Most countries that claim to be capitalistic are not truly capitalistic and have some protections that protect businesses and people, both of which are criticized.

Criticism of Communism• Because communism is a social,

political, and economic system, it has been criticized and many grounds, including:1. It has led to the death of more

than 200 million people over the last 100 years;

2. It does not allow for any dissent;3. It is completely opposed to

religion;4. Everywhere it has been tried as a

system, it has failed;5. It is antithetical to human nature,

resulting in some members to be far “more equal” than others.

6. Instead of providing more freedom for its citizens, communism censors and reduces their freedom.