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American Government Reflections

Chapter 22: Comparing Political and Economic Systems

Today the U.S. is classified as a capitalist country. The major principles of capitalism are
private ownership, competition, profit, and a market economy. Private ownership allows the
companies, and not the government, control over factors of production. Then, competition
between companies stimulates each company to try and make a better product for a lower price
than other companies, which then determines the price under the laws of supply and demand and
how much profit that the company will make. This is critical for the economy as market
economies goods and services are exchanged freely and the government has limited say in how,
what, and for whom they are produced. However, the U.S. must sometimes maintain the
businesses and industries that drive a free-enterprise economy. Though the government will
intervene within the economy using fiscal and monetary policy, the government's influence over
the economy is limited. This stems from the idea that an economy will guide itself to promote the
public good because of people's self-interest. I think that the government should have limited
influence over the economy and only intervene when necessary. I think that this mixed economy
of private ownership and government action help stimulate the economy and keep it from
declining. Additionally, because some of the economy is regulated it allows the government to
impose taxes and spending policies which help fund government social services. This creates a
healthy balance between government regulation and a free-market.
Socialism, unlike capitalism, has an economy in which the government or people as a whole
control the factors of production and manage the distribution of goods. This is also known as a
command economy. Under this system, they strive to create an economy where the wealth and
social services are equally distributed. Most socialist countries today follow democratic
socialism. This means that the government enforce nationalization, in which the government
controls industries. Also, individuals influence the economic planning by electing government
officials. However, a drawback to this form of economy is that, under socialism, taxes are some
of the highest in the world to help pay for government services and programs. I think that it is
better if the government does not regulate the economy is better for nations as it produces
healthier economies and provides lower taxes. However, a democratic socialist economy heavily
regulates only a portion of the economy in contrast to a communist country.
Communism evolved from the ideas of Karl Marx, the founder of modern socialist thought,
who wrote the Communist Manifesto. He believed that the proletariat would rise up to overthrow
the bourgeoisie and that afterward, there would be no classes and class struggle would be
destroyed. Marx also discusses forces of production and relations of production that drive the
economy. However, I believe that there can never be a world where classes are not present and
complete government control of the economy will make the economy weaker than one with
limited government control. The first communist nation, Russia, was lead by Vladimir Lenin
who lead the Bolsheviks in taking control of the Russian government. They then formed the
Russian Communist Party and spread communism to other nations. After Lenin, Stalin came to
power and implemented the Five-Year Plans which improved the economy, but decreased the
standard of living for many people. Also, both Lenin and Stalin created a dictatorial government

and did not tolerate opposition. I think that this violates basic human rights and that people
should be allowed to voice their opinions to help the public good. Most communist nations,
however, soon dissolved and are now struggling to develop new societies.