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CHANAKYA NATIONAL LAW UNIVERSITY

NYAYA NAGAR, PATNA

FINAL DRAFT IN THE FULFILMENT OF THE COURSE TITLED

SOCIOLOGY OF LAW

ON THE TOPIC

COMMUNISM AND CAPITALISM: A COMPARATIVE ANALYSIS

SUBMITTED TO: SUBMITTED BY:

DR.SANGEET KUMAR NAME:AYUSHMAN

ASSISTANT PROFESSOR ROLL NO: 2015

SOCIOLOGY BBA.LL.B (HONS.)

1
DECLARATION

I, AYUSHMAN KISHORE, a student of Chanakya National Law University, Patna hereby


declare that the work reported in the BBA.LLB(HONS.) project entitled “COMMUNISM
AND CAPITALISM:A COMPARATIVE ANALYSIS” is an authentic record of my work
carried out under the supervision of DR.SANGEET KUMAR.I have not submitted this work
elsewhere for any other degree or diploma .I am fully responsible for the contents of my
project report.

2
ACKNOWLEDGEMENT

I would like to take this opportunity to express my profound gratitude and deep regard to
DR.SANGEET KUMAR sir for his exemplary guidance, valuable feedback and constant
encouragement throughout this project.

His valuable suggestions were of immense help throughout the making of this project.

I would also like to thank my friends and my seniors without whom the making of this
project would not have been successful.

I would also like to extend my gratitude to my parents and all those unseen hands who have
helped me throughout this project.

3
CONTENTS

i. AIMS AND OBJECTIVES

ii. REVIEW OF LITERATURE

iii. RESEARCH QUESTIONS

iv. HYPOTHESIS

v. RESEARCH METHODOLOGY

vi. TOOLS OF RESEARCH

vii. LIMITATION OF THE PROJECT

viii. SAMPLING TECHNIQUE

1. INTRODUCTION
2. HISTORICAL BACKGROUND OF COMMUNISM AND CAPITALISM
3. MERITS AND DE-MERITS OF COMMUNISM AND CAPITALISM
4. PERSPECTIVE OF DIFFERENT PIONEERS
5. IMPACT OF BOTH IDEOLOGIES ON THE CONTEMPORARY SOCIETY
6. CONCLUSION AND SUGGESTION

4
AIMS AND OBJECTIVES

The researcher intends to study the:

 concept and background of communism and capitalism


 the merits and de-merits of communism and capitalism
 perspective of different pioneers
 impact on the contemporary society.

REVIEW OF LITERATURE

1. KARL MARX,DAS KAPITAL,PENGUIN CLASSES,FEBRUARY 21st 1848:

In this book Serge Levitsky presents a revised version of Kapital ,abridged to emphasis the
political and philosophical core of Marx’s work. Here then is a highly readable and fresh
version of a work whose ideas provided inspiration for communist regimes, ideologiocal war
against capitalism.

2. DAVID FRIESTLAND,THE RED FLAG: A HISTORY OF COMMUNISM,GROVE


PRESS, NOVEMBER 1ST 2009:

In the red flag,david priestland tells the epic story of a movement that has been there for 200
years and consists of the perspectives of leaders including marx, Engels,Lenin,Stalin ,Castro,
Che Guevara, Mao and many others.

3. ARCHIE BROWN,THE RISE AND FALL OF COMMUNISM, ECCO,JUNE 9TH 2009

The rise and fall of communism is the definitive history from the internationally renowned
professor. Archie examines the origin of the most important political ideology of 20th century
,its development in different nations and talks the rise and fall of communism.

4. KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE 27TH


2009

In the communist manifesto , Marx’s and Engel’s revolutionary summons to working classes.
It is one of the most important political theory ever formulated . they produce an incisive
accpunt of idea of communism in which they envisage a society without classes, private
property or state, arguing exploitation of industrial workers.

5. KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE 27TH


2009

In this book,the prophetic work is presented and the most lucid and comprehensive history of
the origins ,structure and the posthumous development of the system of thought that had the
greatest impact on 20th century.

5
HYPOTHESIS

The researcher presumes that:

1. Capitalism is better than communism

2. the perspective of karl marx cannot be applied in the contemporary society.

3. communism as an ideology has more de-merits than merits.

RESERACH QUESTIONS

1. what is communism and capitalism as an ideology?

2.what is the historical vbackgrouund of these two ideologies?

3. what are the merits and de-merits of communism and capitalism?

4. what are the perspectives of different pioneers regarding these ideologies?

5. what has been the impact of these ideologies on world affairs?

LIMITATIONS

The researcher will base her research to the theory given by some of the eminent jurists only
and the non-doctrinal part would be limited to Patna only.

RESEARCH METHODOLOGY

The researcher will make use of doctrinal as well as non-doctrinal research in order to collect
qualitative and quantitative data to complete the project. The doctrinal research includes the
use of literary sources while interview of people, questionnaires and observation will form
the part of non-doctrinal research.

The methods of data collection will include:

I. Primary sources – Data would be collected through interviews, questionnaires,


observation, case study

II. Secondary sources – Data will be collected through library study and Internet search
(books, journals articles, etc.).

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TOOLS OF DATA COLLECTION

Tools of data collection will include Interview schedule, observation guide, questionnaire,
camera, voice recorder, notepad , pen.

METHOD OF SAMPLING

Researcher has used purposive and convenient method of sampling

7
CHAPTER 1: INTRODUCTION

Capitalism and communism are different in their political and economic ideologies.
Capitalism and Communism never go together.

One of the major differences between capitalism and communism is with regard to the
resources or the means of production.

Communism includes a variety of schools of thought, which broadly

include Marxism and anarchism (anarcho-communism), as well as the political ideologies

grouped around both. All of these share the analysis that the current order of society stems

from its economic system, capitalism; that in this system there are two major social classes;

that conflict between these two classes is the root of all problems in society; and that this

situation will ultimately be resolved through a social revolution. The two classes are

the working class—who must work to survive and who make up the majority within

society—and the capitalist class—a minority who derives profit from employing the working

class through private ownership of the means of production. The revolution will put the

working class in power and in turn establish social ownership of the means of production,

which according to this analysis is the primary element in the transformation of society

towards communism.In Communism, the community or society solely owns the resources or

the means of production. On the other hand, in capitalism, the resources or the means of

production lies with a private owner.While the profit of any enterprise is equally shared by all

the people in communism, the profit in a capitalist structure belong to the private owner only.

While the private party controls the resources in capitalism, it is the society that controls the
whole means of production in communism.

For Communists, the society is above individuals. But for capitalists, individual freedom is

above the state or society. While capitalism is a self regulated economic system, communism

is a government run economy. In capitalism, the individual has full control over production

and decides on the price structure. Contrary to this, it is the society or the government that
determines the price structure in communism.

8
Communism stands for equal sharing of work, according to the benefits and ability. But in

capitalism, an individual is responsible for his works and if he wants to raise the ladder, he

has to work hard.While Communism stands for abolishing private property, Capitalism

stands for private property. Moreover, communism stands for a class less society, which

doesn’t see any difference between the rich and the poor. On the other hand, capitalism

divides the society into rich and poor. Capitalism can be said to be the exploitation of the

individual. While every one is equal in communism, there is a great divide of the class in
capitalism.1

The term ‘capitalism’ implies an economic system that advocates private ownership of the
means of production, distribution, and exchange, to earn the profit. In this system, the
determination of production and price of the goods and services are done by the market, i.e.
the demand and supply forces play a significant role here.

The key features of capitalism are individual rights, private property, accumulation of wealth,
market economy, free and competitive market, self-interest, minimal government
intervention. In a capitalist economy, it is the owners who decide and invest, in financial and
capital market on the production inputs. The competition in the economy decided the price
and distribution of merchandise in the economy.

A form of socialism, in which the means of production, resources, and property are owned
and controlled by the egalitarian society, i.e. by the community equally is called
Communism. It is based on the idea of shared ownership. The theory of communism was
mainly sparked by the German philosophers cum sociologist Karl Marx and Friedrich Engels.
The central principle behind communism is, the contribution and share of each would be
based on his ability and needs.In this political system, the government owns everything and
all the individual works for a common goal. Therefore, the class distinction does not exist, as
all are considered equal. Communism aims at removing the gap between wealthy and poor,
and establishing equality in the economy.
Both communism and capitalism are a form of social organization,that are associated with
trade and industry in the economy and discusses the ownership of property.

As every coin have two aspects, a good and a bad, so as with the case of communism and
capitalism. In capitalism, the distribution of wealth is uneven, due to which rich gets richer
while the poor becomes poorer. On the other hand, in communism, there is an equal
distribution of wealth, but it does not allow individuals to have personal property.
Communism attempts to eliminate capitalism in the economy, as it was introduced, as a
response to injustices of capitalism.2

1
Eric posner,difference between communism and capitalism, DIFFRENCE BETWEEN.NET(march 6,2018, 8:23
p.m) http://www.differencebetween.net/miscellaneous/difference-between-communism-and-capitalism/
2
KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE 27TH 2009

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CHAPTER 2: HISTORICAL BACKGROUND

Early communism

In its modern form, communism grew out of the socialist movement in 19th-century Europe.
As the Industrial Revolution advanced, socialist critics blamed capitalism for the misery of
the proletariat—a new class of urban factory workers who labored under often-hazardous
conditions. Foremost among these critics were Karl Marx and his associate Friedrich Engels.
In 1848, Marx and Engels offered a new definition of communism and popularized the term
in their famous pamphlet The Communist Manifesto.3

Modern communism

Marx predicted that socialism and communism would be built upon foundations laid by the
most advanced capitalist development. However, Russia was one of the poorest countries in
Europe with an enormous, largely illiterate peasantry and a minority of industrial workers.
Marx had explicitly stated that Russia might be able to skip the stage of bourgeois rule..4

Present situation

At present, states controlled by Marxist–Leninist parties under a single-party system include


the People's Republic of China, Cuba, Laos and Vietnam. North Korea currently refers to its
leading ideology as Juche, which is portrayed as a development of Marxism–Leninism.
Communist parties, or their descendant parties, remain politically important in a number of
other countries. The South African Communist Party is a partner in the African National
Congress-led government. In India, as of March 2018, communists lead the government of
only one state, Kerala. In Nepal, communists hold a majority in
the parliament The Communist Party of Brazil is a part of the parliamentary coalition led by
the ruling democratic socialist Workers' Party.

Communism was an economic-political philosophy founded by Karl Marx and Friedrich


Engels in the second half of the 19th century. Marx and Engels met in 1844, and discovered
that they had similar principles. In 1848 they wrote and published "The Communist
Manifesto." They desired to end capitalism feeling that it was the social class system that led
to the exploitation of workers. The workers that were exploited would develop class
consciousness. Then there would be a fundamental process of class conflict that would be
resolved through revolutionary struggle. In this conflict, the proletariat will rise up against the
bourgeoisie and establish a communist society. Marx and Engels thought of the proletariat as
the individuals with labor power, and the bourgeoisie as those who own the means of
production in a capitalist society. The state would pass through a phase, often thought of as a
socialism, and eventually settle finally on a pure communist society. In a communist society,
all private ownership would be abolished, and the means of production would belong to the
entire community. In the communist movement, a popular slogan stated that everyone gave

3
Mustafa rahaman,History and Backround of Communism,STANFORD EDUCATION(18 TH MAY 2015, 5:45
P.M) https://cs.stanford.edu/people/eroberts/cs201/projects/communism-computing-china/index.html

4
Mark,HISTORY OF COMMUNISM,HISTORY WORLD(24th july,2010)
http://www.historyworld.net/wrldhis/PlainTextHistories.asp?ParagraphID=mwg

10
according to their abilities and received according to their needs. Thus, the needs of a society
would be put above and beyond the specific needs of an individual.

Implementation

It became the dominant political philosophy of many countries across Asia, Eastern Europe,
Africa and South America. In the late 19th century, communist philosophy began to develop
in Russia. In 1917, the Bolsheviks seized power through the October Revolution. This was
the first time any group with a decidedly Marxist viewpoint managed to seize power. They
changed their name to the Communist Party, and sent their ideals to all European socialist
parties. They then nationalized all public property as well as putting factories and railroads
under government control. Stalin continued leading by the communist philosophies, and
extended the growth of the the USSR. This example of Communism has been followed in
many countries since then, including China.5

CAPITALISM

Some theorists are of the opinion that there are three periods of Capitalism known as early,
middle and late periods, while others consider capitalism to be a social aspect that cannot be
bounded by historical era, but rather by the recognition of timeless elements of the human
condition.

The earliest forms of capitalism originated in the fourteenth century crisis, a conflict that
developed between the land-owning aristocracy (the lords) and the agricultural producers (the
serfs). Feudalism inhibited the development of capitalism in a number of ways. The serfs
were forced to produce sufficient food for the lords as a result of this the lords had no interest
in the advancement of technology, but rather expanded their power and wealth through
military means. There was no competitive pressure for them to innovate because they were
not producing to sell on the market. The transition from feudalism to capitalism was
primarily driven by the mechanic of war and not by the politics of wealth and production
techniques.

However, modern capitalism arises in the early middle ages, between the 16th and 18th
century, when mercantilism was established. Mercantilism is defined as a distribution of
goods that are bought at a certain price and sold at a higher price in order to generate profits.
It provided the basic principles of capitalism in that it was the "large-scale realization of a
profit by acquiring goods for lower prices than to the sell them". In 18th century mercantilism
declined when a group of economic theorists led by Adam Smith challenged mercantilist
doctrines. They believed that a state could only increase its wealth at the expense of another
state's wealth while the amount of the world's wealth remained constant. Also, as a result of
the decline in mercantilism, Industrial capitalism arises in the mid-18th century due to the
vast accumulation of capital under the phase of merchant capitalism and its investment in
machinery. Industrial capitalism marked development of manufacturing factory system and
led to the global domination of capitalist mode of production.

5
KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE 27TH 2009

11
During the 19th century capitalism allowed great increase in productivity. It triggered great
social changes, which remained in place during the twentieth century where it was
established as the world's most prevalent economic model after the collapse of the USSR. By
the time the twenty-first century approached us, capitalism had become a widely pervasive
economic system worldwide.6

6
john billboard, Essays, UK. (November 2013,7:56 p.m). The Effect Of Capitalism On The Society Media Essay.
http://www.ukessays.com/essays/media/the-effect-of-capitalism-on-the-society-media-essay.php?vref=1

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CHAPTER 3: MERITS AND DE MERITS OF COMMUNISM AND CAPITALISM

Advantages of Communism
Following are the merits and advantages of communist economic system

Elimination of Wastage of Resources. Under comprehensive State planning, goods and


services are produced strictly according to need. Another benefit of communist economy is
the elimination of large-scale wastage of resources. Moreover, the cost of advertisement and
business mal-practices are entirely eliminated.

Elimination of Concentration of Wealth. Everyone receives compensation which supplies


his own needs only and no one has any other source of income except this compensation. It is
not possible to restrain national wealth in few hands.

Eradication of Exploitation. Since there is no opportunity to earn private profit in this


system, the exploitation and economic plundering of the weak is eradicated.

Eradication of Unequal Distribution of Wealth. Under communist economy there is no


scope for gaining wealth through rent, interest or private profit. Every member of the society
is a worker and receives a fixed wage. So unfair gaps or inequalities" in the distribution of
wealth do not take place at all.

Provision of Necessaries of Life. In this system, the provision of necessaries of life to every
citizen is the responsibility of the State. It is the responsibility of the State to provide basic
necessities of life to every individual.

Immunity from Economic Crisis. In communist economic system goods and services are
produced strictly in accordance with national demand. Hence there is no possibility of
overproduction in this system. The danger of economic depression is completely eliminated.
Moreover, the absence of interest secures the economy against several fatal maladies.

Elimination of Unemployment. In communism the process of production is kept going


according to a comprehensive plan, which enables the government to provide jobs to the
deserving people. 7

It embodies equality.In a communist society, everybody is equal and no one is left alone.
That is, no social class is better than the other because there is no social class system at all.
All the resources of a country like property are under the control of the state and governed by
a group that represents the masses. As such, citizens have the peace of mind that all the
people are equal. This is the opposite of capitalism where there are businesses are owned by
capitalists and employees who need to work in order to survive. It makes health care,
education and employment accessible to citizens.
What is seen as a significant advantage of communism is the access it gives to people when it
comes to attending school and given medical attention. This is because in this type of

7
Kimberley amadeo, Communism: Characteristics, Pros, Cons, Examples,THE BALANCE(November 30,
2017,7:24 P.M)https://www.thebalance.com/communism-characteristics-pros-cons-examples-3305589

13
ideology, even the poorest people can attend schools and provided with health care. It also
minimizes unemployment because everybody gets equal opportunities.

It does not allow business monopolies.Since the government owns and controls the business
as well as allots the money to be spent for production costs, there is no business competition
and no manufacturer is better than the other. This means manufacturers can only produce
limited number of goods and are unable to demand for higher prices for their commodities
and monopolize the market.8

Disadvantages of Communism
Following are the demerits and disadvantages of communist economic system

End of Liberty. In this system man is treated like a slave. Economic and political power is
concentrated in the hands of the government and individuals are completely deprived of
freedom of thought and action.

Weakening of the Will to Work. Absence of the profit motive weakens the will of the
individuals to think about and discover new techniques of work. The process of inventions
and discoveries is adversely affected.

Errors in Planning. In a planned economy, goods are produced in general interest and
individual likes and dislikes are not given any importance. Similarly, while determining the
goals of planning the capacity and convenience of individuals are not kept in view. All
decisions in matters relating to planning are taken according to official priorities and people
are forced to meet the official targets.

Failure in Practice. The Communist system has failed to achieve its objectives in practice.
In a model Communist country like Russia despite the reign of terror and oppression and lack
of freedom, the level of production has fallen below the production of capitalist countries.
The rich and poor classes have not been eliminated. Interest-based system also existed in this
country in one form or the other. The institution of state not only did not fade away, but
actually gained enormous authority and power. Consequently, more and more restrictions
were imposed on individual liberty.9

It hampers personal growth.


One of the setbacks of communism is its being too controlling on the lives of the people.
Since it is a classless society, everyone is equal in social status and no one is above the other.
This can also be a disadvantage since people will feel they are at the end of the road because
there is no room for personal improvement. In Cuba, for example, all medical professionals,

8
Aman deshpande, 6 Advantages and Disadvantages of Communism,FUTURE OF WORKING*( February 24,
2016,8:56 P.M) https://futureofworking.com/6-advantages-and-disadvantages-of-communism/

9
Umar farooq,What is Communism - Advantages & Disadvantages of Communism,STUDY LECTURE
NOTES(Wed, 12/21/2011 - 06:55) http://www.studylecturenotes.com/management-
sciences/economics/242-what-is-communism-mba-economics-notes

14
medicines and hospitals are controlled by the government. The fees of these professionals are
regulated by the government and they cannot demand for higher fees.

It dictates on the people.


In a communist society, the government has the power to dictate and run the lives of people.
Although its goal is one of equality, there is basically less or no personal freedom at all to
criticize the government or demand for changes. Moreover, there is no freedom of speech and
whoever goes against the government can be subjected to punishments.

It does not give financial freedom.


Another setback of communism is the fact that entrepreneurs cannot expect to make more
money than the others. As opposed to a free market economy, the command economy which
is practiced by most communist countries ties the hands of business people. Consequently, it
is hard to get rich in these countries.

Main Features of Capitalism:


What a capitalistic economy actually is can be known through its main features. These are

derived from the way certain functions are performed and the main decisions of the economy

executed.

These may be stated as under:

1. Private Property and Freedom of ownership:


A capitalist economy is always having the institution of private property. An individual can

accumulate property and use it according to his will. Government protects the right to

property. After the death of every person his property goes to his successors.

2. Right of Private Property:


The most important feature of capitalism is the existence of private property and the system

of inheritance. Everybody has a right to acquire private property to keep it and after his death,

to pass it on to his heirs.

3. Price Mechanism:
This type of economy has a freely working price mechanism to guide consumers. Price

mechanism means the free working of the supply and demand forces without any

intervention. Producers are also helped by the price mechanism in-deciding what to produce,

how much to produce, when to produce and where to produce.

15
This mechanism brings about the adjustment of supply to demand. All economic processes of

consumption, production, exchange, distribution, saving and investment work according to its

directions. Therefore, Adam Smith has called price mechanism as the “Invisible

Hand” which operates the capitalist.

4. Profit Motive:
In this economy the desire to earn profit is the most important inducement for economic

activity. All entrepreneurs try to start those industries or occupations in which they hope to

earn the highest profit. Such industries as are expected to go under a loss are abandoned.

Profit is such an inducement that the entrepreneur is prepared to undertake high risk.

Therefore, it can be said that Profit Motive is the SOUL of capitalist economy.

5. Competition and Co-operation Goes Side by Side:


A capitalist economy is characterised by free competition because entrepreneurs compete for

getting the highest profit. On the other side buyers also compete for purchasing goods and

services. Workers compete among themselves as well as with machines for taking up a

particular work. To produce goods of the required type and quality workers and machines are

made to co-operate so that the production line runs according to schedule. In this way

competition and co-operation go side by side.

6. Freedom of Enterprise, Occupation and Control:


Every person is free to start any enterprise of his choice. People can follow occupations of

their ability and taste. Moreover, there is the freedom of entering into contract. Employers

may contract with trade unions, suppliers with a firm and one firm with another.

7. Consumer’s Sovereignty:
In a capitalist economy a consumer is compared to a sovereign king. The whole production

frame works according to his directions. Consumer’s tastes govern the whole production line

because entrepreneurs have to sell their production. If a particular type of production is to the

liking of consumers, the producer gets high profits.

8. It arises Class Conflict:


From this class-conflict arises. The society is normally divided into two classes the “haves”
and the “have-not”, which are constantly at war with each other. Conflict between labour and

16
capital is found in almost all capitalistic countries and there seems to be no near solution of

this problem. It seems that this class-conflict is inherent in capitalism.10

Merits of Capitalism:

The main merits and advantages of capitalism are as follows:

1. Production According to the Needs and Wishes of Consumers:


In a free market economy consumer needs and wishes are the upper most in the minds of the

producers. They try to produce goods according to the tastes and liking of the consumers.

This leads to maximum satisfaction of the consumers as obtained from his expenditure on the

needed goods.

2. Higher Rate of Capital Formation and More Economic Growth:


People under capitalism have the right to hold property and pass it on in inheritance to their

heirs and successors. Owing to this right, people save a part of their income so that it can be

invested to earn more income and leave larger property for their heirs. The rate of capital

formation increases when savings are invested. This accelerates economic growth.

3. There is Complete Freedom of Choice in a Capitalist Economy:


Economic freedom means the right to earn and retain property. It also means the freedom of

enterprise and choice of occupation. This leads to the automatic channelization of the

country’s man power resources in different vocations. There is no need to direct people or

force them. Further, there is the freedom of contract which ensures smooth and flexible

functioning of different production units. 11.

4. Efficient Production of Goods and Services:


Due to competition every entrepreneur tries to produce goods at the lowest cost and of a

durable nature. Entrepreneurs also try to find out superior techniques of producing the goods

consumers get the highest quality goods at the least possible cost because the producers are

always busy in making their production methods more and more efficient.
10
Gareth jones,The social implications of modern capitalism,LONDON BUSINESS SCHOOL(01 December 2001,
5:45P.M) https://www.london.edu/faculty-and-research/lbsr/the-social-implications-of-modern-
capitalism#.WtioB4hubIV

11
Jame adows.Features Of Capitalism, E NOTES(24TH july,8:43 p.m) https://www.enotes.com/homework-
help/what-main-features-capitalist-form-government-126861

17
5. Varieties of Consumer Goods:
Competition is not only in price but also in the shape design, colours and packing of products.

Consumers therefore get a good deal of variety of the same product. They need not be given

limited choice. It is said that variety is the spice of life. Free market economy offers variety

of consumer goods.

6. In Capitalism there is no Need of Inducement or Punishment for Good and Bad

Production:
A capitalist economy provides encouragement to efficient producers. The able an

entrepreneur is, the higher is the profit he obtains. There is no need to provide any kind of

inducement. The price mechanism punishes the inefficient and rewards the efficient on its

own.12

7. It Encourages the Entrepreneurs to Take Risks and Adopt Bold Policies:


Because by taking risk they can make higher profits. Higher the risk, greater the profit. They

also make innovations in order to cut their costs and maximise their profits. Hence capitalism

brings about great technological progress in the country.

8. It Provides the Best Atmosphere for Inventions:


Entrepreneurs are always on the look-out for new ideas to be applied to production. They try

to beat each other in innovations. This leads to rapid expansion, greater employment and

income. The investors are suitably rewarded with their royalties, through the copy right.

Similarly, innovators enjoy the benefits of their research, through the system of patents and

trade-marks.

De-Merits of Capitalism:
The capitalist economy has been showing signs of stress and strain at different times. Some

have called for a radical reform of the free-market economy. Others like Marx have

considered capitalism economy to be contradictory in itself. They have predicted the ultimate

doom of capitalist economy after a series of deepening crisis.13

12
KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE 27TH 2009
13
Saqeeb, Communism vs Socialism vs Capitalism,BARTLEBY.COM(13th june 2009,6:53 p.m)
https://www.bartleby.com/essay/Communism-vs-Socialism-vs-Capitalism-P3R3KJ2L36YZA

18
The main de-merits or disadvantages of capitalist economy are as follows:

1. Inequality of Distribution of Wealth and Income:


The system of private property acts as a means of increasing inequalities of income among

different classes. Money begets money. Those who have wealth can obtain resources and

start big enterprises. The property less classes have only their labour to offer. Profits and

rents less classes have only their labour to offer. Profits and rents are high.

Wages are much lower. Thus the property holders obtain a major share of national income.

The common masses have their wages to depend upon. Although their number is

overwhelming their share of income is relatively much lower.

2. Class Struggle as Inevitable in Capitalist Economy:


Some critics of capitalism consider class struggle as inevitable in a capitalist economy.

Marxists point out that there are two main classes into which capitalist society is divided. The

‘haves’ which are the rich propertied class own the means of production. The “have not’s”

which constitute the wage earning people have no property.

The ‘haves’ are few in number. The ‘have not’s are in majority. There is a tendency on the

part of the capitalist class to exploit the wage-earners. As a result there is a conflict between

the employers and the employees which leads to labour unrest. Strikes, lockouts and other

points of tension. All this have a very bad effect on production and employment.

3. Social Costs are Very High:


A capitalist economy industrialises and develops but the social costs of the same are very

heavy. Factory owners running after private profit do not care for the people affected by their
production. The environment is polluted because factory wastes are not properly disposed of.

Housing for factory labour is very rarely provided with the result that slums grow around big

cities..

4. Instability of the Capital Economy:


A capitalist economy is inherently unstable. There is recurring business cycle. Sometimes
there is a slump in economic activity. Prices fall, factories close down, workers are rendered

unemployed. At other times business is brisk, prices rise, fast, there is a good deal of

19
speculative activity. These alternating periods of recession and boom lead to a good deal of

wastage of resources.

5. Unemployment and Under-employment:


A capitalist economy has always some unemployment because the market mechanism is slow

to adjust to the changing conditions. Business fluctuations also result in a large part of the

labour force going unemployed during depressions. Not only this, workers are not able to get

full time employment except under boom conditions.

6. Working Class does not have Adequate Social Security:


In a capitalist economy, the working class does not have adequate social security,

commodity, the factory owners do not provide for any pension, accident benefits or relief to

the families of those who die in employment. As a result, widows and children have to

undergo a good deal of suffering. Governments are not in a position to provide for adequate

social security in over populated less developed countries.

7. Slow and Unbalanced Growth:


A free market economy may work automatically but the rate of growth is rather slow.

Moreover as the economy progresses, there is no all round development. Some areas develop

much faster while others remain backward. Industries may expand fast while there may be

poverty in agriculture.

9. No Bargaining Capacity of Labourers hence Exploitation:


In a capitalist economy, workers are often paid a wage rate below their productivity. This is

because; they do not have the bargaining power to get their due from the rich capitalist.
Women and children are often paid a very low wage rate. There is no equal pay for equal

work..14

14
john billboard, Essays, UK. (November 2013,7:56 p.m). The Effect Of Capitalism On The Society Media Essay.
http://www.ukessays.com/essays/media/the-effect-of-capitalism-on-the-society-media-essay.php?vref=1

20
CHAPTER 4: DIFFRENT IDEOLOGIES OF COMMUNISM AND TYPES OF
CAPITALISM

Marxism

Marxism, first developed by Karl Marx and Friedrich Engels, has been the foremost ideology
of the communist movement. Marxism considers itself to be the embodiment of scientific
socialism and rather than model an "ideal society" based on intellectuals' design, it is a non-
idealist attempt at the understanding of society and history through an analysis based in real
life. Marxism does not see communism as a "state of affairs" to be established, but rather as
the expression of a real movement, with parameters which are derived completely from real
life and not based on any intelligent design. Therefore, Marxism does no blueprinting of a
communist society and it only makes an analysis which concludes what will trigger its
implementation and discovers its fundamental characteristics based on the derivation of real
life conditions.

At the root of Marxism is the materialist conception of history, known as historical


materialism for short. It holds that the key characteristic of economic systems through history
has been the mode of production and that the change between modes of production has been
triggered by class struggle. According to this analysis, the Industrial Revolution ushered the
world into a new mode of production: capitalism. Before capitalism, certain working classes
had ownership of instruments utilized in production, but because machinery was much more
efficient this property became worthless and the mass majority of workers could only survive
by selling their labor, working through making use of someone else's machinery and
therefore making someone else profit. Thus with capitalism the world was divided between
two major classes: the proletariat and the bourgeoisie. These classes are directly antagonistic:
the bourgeoisie has private ownership of the means of production and earns a profit
off surplus value, which is generated by the proletariat, which has no ownership of the means
of production and therefore no option but to sell its labor to the bourgeoisie.
An important concept in Marxism is socialization vs. nationalization. Nationalization is
merely state ownership of property, whereas socialization is actual control and management
of property by society. Marxism considers socialization its goal and considers nationalization
a tactical issue, with state ownership still being in the realm of the capitalist mode of
production. In the words of Engels: "The transformation into State-ownership does not do
away with the capitalistic nature of the productive forces. State-ownership of the productive
forces is not the solution of the conflict, but concealed within it are the technical conditions
that form the elements of that solution".This has led some Marxist groups and tendencies to
label states such as the Soviet Union—based on nationalization—as state capitalist.
Leninism
We want to achieve a new and better order of society: in this new and better society there
must be neither rich nor poor; all will have to work. Not a handful of rich people, but all the
working people must enjoy the fruits of their common labour. Machines and other
improvements must serve to ease the work of all and not to enable a few to grow rich at the
expense of millions and tens of millions of people. This new and better society is called
socialist society. The teachings about this society are called 'socialism'.
–Vladimir Lenin, 1903

21
Leninism is the body of political theory, developed by and named after the Russian
revolutionary and later Soviet premier Vladimir Lenin for the democratic organisation of a
revolutionary vanguard party and the achievement of a dictatorship of the proletariat, as
political prelude to the establishment of socialism. Leninism comprises socialist political and
economic theories developed from Marxism, as well as Lenin's interpretations of Marxist
theory for practical application to the socio-political conditions of the agrarian early-
twentieth-century Russian Empire. In February 1917, for five years Leninism was the
Russian application of Marxist economics and political philosophy, effected and realised by
the Bolsheviks, the vanguard party who led the fight for the political independence of the
working class.15
Marxism–Leninism, Stalinism:
Marxism–Leninism is a political ideology developed by Joseph Stalin, which according to its
proponents is based in Marxism and Leninism. The term describes the specific political
ideology which Stalin implemented in the Communist Party of the Soviet Union and in a
global scale in the Comintern. There is no definite agreement between historians of about
whether Stalin actually followed the principles of Marx and Lenin. It also contains aspects
which according to some are deviations from Marxism, such as "socialism in one
country". Marxism–Leninism was the ideology of the most clearly visible communist
movement. As such, it is the most prominent ideology associated with communism.
Marxism–Leninism refers to the socioeconomic system and political ideology implemented
by Stalin in the Soviet Union and later copied by other states based on the Soviet
model (central planning, one-party state and so on), whereas Stalinism refers to Stalin's style
of governance (political repression, cult of personality and the like). Marxism–Leninism
stayed after de-Stalinization, Stalinism did not. In the last letters before his death, Lenin in
fact warned against the danger of Stalin's personality and urged the Soviet government to
replace him.
Marxism–Leninism has been criticized by other communist and Marxist tendencies. They
argue that Marxist–Leninist states did not establish socialism, but rather state capitalism.
According to Marxism, the dictatorship of the proletariat represents the rule of the majority
(democracy) rather than of one party, to the extent that co-founder of Marxism Friedrich
Engels described its "specific form" as the democratic republic. Additionally, according to
Engels state property by itself is private property of capitalist nature unless the proletariat has
control of political power, in which case it forms public property. Whether the proletariat was
actually in control of the Marxist–Leninist states is a matter of debate between Marxism–
Leninism and other communist tendencies. To these tendencies, Marxism–Leninism is
neither Marxism nor Leninism nor the union of both, but rather an artificial term created to
justify Stalin's ideological distortion, forced into the CPSU and Comintern. In the Soviet
Union, this struggle against Marxism–Leninism was represented by Trotskyism, which
describes itself as a Marxist and Leninist tendency.
Trotskyism
Trotskyism is a Marxist and Leninist tendency that was developed by Leon Trotsky, opposed
to Marxism–Leninism. It supports the theory of permanent revolution and world
revolution instead of the two stage theory and socialism in one country. It
supported proletarian internationalism and another communist revolution in the Soviet Union,
which Trotsky claimed had become a "degenerated worker's state" under the leadership of
15
Sushil nanda,communism, preservearticles (12th march 2008,4:45
p.m)http://www.preservearticles.com/201102083939/what-are-the-merits-and-demerits-of-capitalism.html

22
Stalin, in which class relations had re-emerged in a new form, rather than the dictatorship of
the proletariat.
Trotsky and his supporters, struggling against Stalin for power in the Soviet Union, organized
into the Left Opposition and their platform became known as Trotskyism. Stalin eventually
succeeded in gaining control of the Soviet regime and Trotskyist attempts to remove Stalin
from power resulted in Trotsky's exile from the Soviet Union in 1929. While in exile, Trotsky
continued his campaign against Stalin, founding in 1938 the Fourth International, a Trotskyist
rival to the Comintern In August 1940, Trotsky was assassinated in Mexico City on Stalin's
orders.
Trotsky's politics differed sharply from those of Stalin and Mao, most importantly in
declaring the need for an international proletarian revolution (rather than socialism in one
country) and support for a true dictatorship of the proletariat based on democratic principles.
Libertarian Marxism
Libertarian Marxism is a broad range of economic and political philosophies that emphasize
the anti-authoritarian aspects of Marxism. Early currents of libertarian Marxism, known as
left communism, emerged in opposition to Marxism–Leninism and its derivatives, such
as Stalinism, Maoism and Trotskyism. Libertarian Marxism is also critical of reformist
positions, such as those held by social democrats. Libertarian Marxist currents often draw
from Marx and Engels' later works, specifically the Grundrisse and The Civil War in
France, emphasizing the Marxist belief in the ability of the working class to forge its own
destiny without the need for a revolutionary party or state to mediate or aid its
liberation. Along with anarchism, libertarian Marxism is one of the main currents
of libertarian socialism. 16.
Left communism
Left communism is the range of communist viewpoints held by the communist left, which
criticizes the political ideas and practices espoused—particularly following the series of
revolutions which brought the First World War to an end—by Bolsheviks and by social
democrats. Left communists assert positions which they regard as more
authentically Marxist and proletarian than the views of Marxism–Leninism espoused by
the Communist International after its first congress (March 1919) and during its second
congress (July–August 1920).
Left communists represent a range of political movements distinct from Marxist–Leninists
(whom they largely view as merely the left-wing of capital), from anarcho-communists (some
of whom they consider internationalist socialists) as well as from various other revolutionary
socialist tendencies (for example De Leonists, whom they tend to see as being internationalist
socialists only in limited instances)17

CAPITALISM

Advanced capitalism
Jürgen Habermas has been a major contributor to the analysis of advanced-capitalistic societies.
Habermas observed four general features that characterise advanced capitalism:

16
KARL MARX,DAS KAPITAL,PENGUIN CLASSES,FEBRUARY 21st 1848
17
DAVID FRIESTLAND,THE RED FLAG: A HISTORY OF COMMUNISM,GROVE PRESS, NOVEMBER 1ST 2009

23
 Concentration of industrial activity in a few large firms.
 Constant reliance on the state to stabilise the economic system.
 A formally democratic government that legitimises the activities of the state and dissipates
opposition to the system.
 The use of nominal wage increases to pacify the most restless segments of the work force.
Mercantilism
Mercantilism is a nationalist form of early capitalism that came into existence approximately in
the late 16th century. It is characterized by the intertwining of national business interests to state-
interest and imperialism; and consequently, the state apparatus is utilized to advance national
business interests abroad. An example of this is colonists living in America who were only
allowed to trade with and purchase goods from their respective mother countries (e.g. Britain,
Portugal and France). Mercantilism was driven by the belief that the wealth of a nation is
increased through a positive balance of trade with other nations—it corresponds to the phase of
capitalist development sometimes called the primitive accumulation of capital.

Free market economy


Free market economy refers to a capitalist economic system where prices for goods and services
are set freely by the forces of supply and demand and are allowed to reach their point of
equilibrium without intervention by government policy. It typically entails support for highly
competitive markets and private ownership of productive enterprises. Laissez-faire is a more
extensive form of free market economy where the role of the state is limited to
protecting property rights.18

Social market economy


A social market economy is a nominally free market system where government intervention in
price formation is kept to a minimum, but the state provides significant services in the area of
social security, unemployment benefits and recognition of labor rights through national collective
bargaining arrangements. This model is prominent in Western and Northern European countries
as well as Japan, albeit in slightly different configurations. The vast majority of enterprises are
privately owned in this economic model.

State capitalism
State capitalism is a capitalist market economy dominated by state-owned enterprises, where the
state enterprises are organized as commercial, profit-seeking businesses. The designation has
been used broadly throughout the 20th century to designate a number of different economic
forms, ranging from state-ownership in market economies to the command economies of the
former Eastern Bloc. According to Aldo Musacchio, a professor at Harvard Business School,
state capitalism is a system in which governments, whether democratic or autocratic, exercise a
widespread influence on the economy either through direct ownership or various subsidies.
Musacchio notes a number of differences between today's state capitalism and its predecessors.
In his opinion, gone are the days when governments appointed bureaucrats to run companies:
the world's largest state-owned enterprises are now traded on the public markets and kept in
good health by large institutional investors. Contemporary state capitalism is associated with
the East Asian model of capitalism, dirigisme and the economy of Norway
In Socialism: Utopian and Scientific, Friedrich Engels argued that state-owned enterprises would
characterize the final stage of capitalism, consisting of ownership and management of large-
scale production and communication by the bourgeois state. In his writings, Vladimir
Lenin characterized the economy of Soviet Russia as state capitalist, believing state capitalism to
be an early step toward the development of socialism.

18
Smriti chand,Capitalism or Free Enterprise Economy: Features, Merits and Demerits,YOU ARTICLE
LIBRARY(13TH march 2009, 7:45p.m) http://www.yourarticlelibrary.com/economics/capitalism-or-free-
enterprise-economy-features-merits-and-demerits/10533

24
Corporate capitalism
Corporate capitalism is a free or mixed-market economy characterized by the dominance of
hierarchical, bureaucratic corporations.

Mixed economy
A mixed economy is a largely market-based economy consisting of both private and public
ownership of the means of production and economic interventionism through macroeconomic
policies intended to correct market failures, reduce unemployment and keep inflation low. The
degree of intervention in markets varies among different countries. Some mixed economies, such
as France under dirigisme, also featured a degree of indirect economic planning over a largely
capitalist-based economy.
Most modern capitalist economies are defined as "mixed economies" to some degree.19

19
Philip Ferguson,How capitalist ideology works,REDLINE(October 18, 2011,6:34 P.M)
https://rdln.wordpress.com/2011/10/18/how-capitalism-works/

25
CHAPTER 5: IMPACT OF COMMUNISM AND CAPITALISM ON THE WORLD

COMMUNISM
Communism's effects on economies across the globe have been particularly disastrous. By
nationalizing productive assets and placing their management into the hands of officials who
possess neither the competence nor the motivation to oversee them efficiently, Communism
invariably causes productivity to decline precipitously. Moreover, it causes the people at
large to view themselves not as self-sufficient individuals but rather as wards of the state,
dependent upon government largesse for every aspect of their well-being. The free-market
economist Friedrich Hayek has noted that only the prospect of enrichment can motivate
people to exert themselves beyond their immediate needs – and that such exertion most often
results in collateral benefits to society as a whole. But Communism, by rewarding equally the
worker and the slacker, kills those incentives. That is why Communist regimes have
traditionally relied on deception, coercion, and force in order to put their ideals into action.

Just as Communism devastates economies, so does it, by necessity, destroy liberty?


“Historical evidence,” writes Richard Pipes, “indicates that the liberties of individuals can
only be protected when property rights are firmly guaranteed, because these rights constitute
the most effective barrier to state encroachments. The recognition by the state of the right of
its subjects and its citizens to their belongings is tantamount to acknowledging limits to state
power. And in as much as property is a legal concept, enforced by courts, it also signifies
acknowledgment that the state is bound by law.” In short, Communism's primary objective,
the abolition of property, leads inevitably to the destruction of liberty and legality.
In their quest to impose total ideological conformity upon the populations they control,
Communist regimes historically have exiled, imprisoned, and otherwise silenced those who
would not conform. These were often the most talented, insightful, truthful, civic-minded,
and enterprising people in the land. By the wholesale elimination of such individuals, the
intellectual and moral fibres of the respective populations were degraded immeasurably.
Richard Pipes offers one example of this phenomenon:
“In Russia, which experienced Communism the longest, the population has been robbed of
self-reliance. Since under the Soviet regime all orders pertaining to non personal affairs had
to emanate from above and initiative was treated as a crime, the nation has lost the ability to
make decisions in big matters and small. People wait for orders. Communism also killed in
them the work ethic and a sense of public responsibility.”20
“And that is why the citizens of less socialist -- and more religious -- America give more
charity per capita and per income than do citizens of socialist countries. That is why
Americans volunteer time for the needy so much more than citizens of socialist countries do.
That is why citizens of conservative states in America give more charity than citizens of
liberal states do. The more Left one identifies oneself on the political spectrum, the more that
person is likely to believe that the state, not fellow citizens, should take care of the poor and

20 Henryk A. Kowalczyk,Capitalism, Socialism and Communism, huffington post(11/11/2015


04:31 pm ET) https://www.huffingtonpost.com/henryk-a-kowalczyk/capitalism-socialism-and-
_b_8523486.html

26
the needy. Under socialism, one is not only liberated from having to take care of oneself; one
is also liberated from having to take care of others.”
Critics of Communism often cite the atrocities of such monsters as Lenin, Stalin, Mao, Pol
Pot, and Castro as evidence of Communism's evil nature. But in response, Communism's
defenders are quick to suggest that these figures were merely perverters of a most noble
ideology; that by no means must genuine Communism necessarily lead to the horrors which
those men engineered; and that there is nothing inherent in Communism that causes such
tyrants to rise to power. But in fact, there is. In order for a Communist government to enforce
the economic equality and ideological conformity that it demands, it must compel people to
give up their private property and to surrender their private interests to the state. To achieve
these objectives, the government must possess boundless authority over all aspects of
national life, including the economy. The administration of such authority requires a vast
bureaucracy. Consider, for instance, that by the late 1980s the Soviet KGB was staffed by at
least 480,000 people, of whom approximately 250,000 – assisted by tens of millions of
informants – engaged in domestic counterintelligence and surveillance.

The willingness of Communist regimes to use brute force over their subjects is not
constrained, as it is in non-Communist societies, by any concern for the civil or human rights
of the populace. This is because such concerns are, by definition, contingent upon a bedrock
belief that human beings inherently possess a value and a dignity deserving of respectful
treatment. In the United States, for example, the nation's founding document – the
Declaration of Independence – affirms that all individuals are “endowed by their Creator with
certain unalienable rights,” and that “among these are life, liberty, and the pursuit of
happiness.” This perspective honours the supreme value of each individual, not of any party
or collective, and it stipulates specific limitations on the government's power over the
individual..

In its quest to redeem the collective “humanity,” the Communist regime is prepared to
literally sacrifice the lives of millions of individual human beings on the altar of despotism
and tyranny. Focusing its gaze intently on its long-range goal of worldwide expansionism,
such a government tolerates no dissenters who might act as impediments along the road
toward utopian Communism. Under this type of system, the leadership operates from the
premise that “the Party is always right.” From there, it is but a short logical leap to the notion
that “the Leader of the Party is always right.” Such are the conditions that pave the way for
the ascent of Communist tyrants, the bounds of whose power and barbarism are constrained
only by the cultural and political traditions amid which they arise.

Many of Communism's destructive effects are quantifiable. Below are some examples:
For example, in the pre-Castro years of the 1950s, the Cuban population as a whole had
access to good medical care through association clinics (clinicas mutualistas) which predated
the American concept of health maintenance organizations (HMOs) by decades, as well as
through private clinics. At that time, the Cuban medical system ranked among the best in the
world; its ratio of one physician per 960 patients was rated 10th by the World Health
Organization. In addition, Cuba had Latin America's lowest infant-mortality rate, comparable
to Canada's and better than those of France, Japan, and Italy.

But today, under the communist regime (with its system of socialized medicine) that Castro
first instituted decades ago, hospitals for ordinary Cubans possess a dearth of even the most
basic medicines and medical equipment. They have virtually no access to antibiotics, insulin,
heart drugs, and sphygmomanometers to measure blood pressure, sterile gloves, clean water,

27
syringes, soap, or disinfectants. They typically feature highly unsanitary conditions.
Consequently, infectious diseases such an impetigo and hepatitis, and infestations such as
scabies, lice and fungal diseases, are commonplace in the Cuban hospital population.
Cuba's healthcare system is a disaster not only for patients but also for physicians. Because of
the meagre salaries paid to Cuban doctors -- on the average 400 pesos per month (equivalent
to $20 U.S.) -- many have quit the profession to seek jobs in the only industry that offers
them any degree of economic opportunity: the Cuban tourism industry. Former doctors in
Cuba can commonly be found driving dilapidated taxis, acting as tour guides, or even
working in family inns as waiters or cooks. Those who choose to remain in the medical
profession work long hours in dismal conditions.21

* How Communism Devastated North Korea's Economy:

The contrast between the respective economic conditions of Communist North Korea and
capitalist South Korea is particularly striking.

North Korea, one of the world's most centrally directed and least open economies,
faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result
of years of underinvestment, shortages of spare parts, and poor maintenance. Large-
scale military spending draws off resources needed for investment and civilian
consumption. Industrial and power output have stagnated for years at a fraction of pre-1990
levels. Frequent weather-related crop failures aggravated chronic food shortages caused by
on-going systemic problems, including a lack of arable land, collective farming practices,
poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel.

A devastating famine struck North Korea in 1998 and 1999 as a result of decades of
economic mismanagement and resource misallocation, poor industrial and agricultural
productivity, the disappearance of previously lucrative markets following the Soviet Union's
collapse, and the government's massive military expenditures. This famine claimed an
estimated 2 to 3 million lives (out of a population of perhaps 22 million) and forced the
country to rely heavily on international aid to feed its population while Kim continued to
funnel all available funds into the maintenance of his million-man army. To this day, the
population continues to suffer from prolonged malnutrition and poor living conditions.

Moreover, systematic human rights abuses throughout North Korea have been rampant and
well documented during Kim's reign. It is estimated that there are some 200,000 political
prisoners in the country today; there have been innumerable reports of torture, slave labor,
and forced abortions and infanticides in the prison camps.

By contrast, since the 1960s South Korea has achieved a remarkable record of growth and
global integration to become a high-tech industrialized economy. In the 1960s, the country's
GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In
2004, South Korea joined the trillion dollar club of world economies, and currently is among
the world's 20 largest economies.22

21
Matthew Davis,The Effects of Communism on Popular Preferences,THE NATIONAL BUREAU OF ECONOMIC
RESERACH(Thursday, April 19, 2018,7:56 P.M) http://www.nber.org/digest/apr06/w11700.html

22
ARCHIE BROWN,THE RISE AND FALL OF COMMUNISM, ECCO,JUNE 9TH 2009

28
CAPITALISM

The effect of capitalism on the society and culture has been an issue of great discussion since
the time it emerged in Europe as a form of economic system in late 18th century. This issue
of impact of capitalism on the society is an exception in terms of economic perspectives.

In many ways, the cultural impacts outdo all other factors of the system. For the past two
hundred or so years, Western civilization has been shaped by the impact of capitalism on the
society. The impacts of capitalism on the culture are highly varied and therefore have created
room for those who support the idea and also the detractors to challenge its bad effects.

It is true that some aspects of society and culture can be seen to be as a result of capitalism.
However, defining how and why an issue is said to be as a result of capitalism is quite
necessary. Some of the major ideas connected to the study of the impacts of capitalism on the
society and culture are beneficial, human, economical and desirable. The capitalist society
has its backup on individual consolidation and ownership of the production means where the
production of goods is directed by beneficial intention to fulfill human needs

The first effect of capitalism is that of promoting culture of work. Capitalism intends to
encourage all people to participate in activities that appear beneficial to them. This is what is
perceived by many people as capitalism's most important attribute. Actually, this is a very
important factor in the manner in which the system of capitalism has succeeded. A particular
level, profit motive and competition that is encouraged the capitalist's market system
stimulates the system.

The motive to act is the main factor in various products that are made by the capitalist's
societies. In a manner that the capitalist system is functional, however, the reward is not
usually proportional the process of contribution. In a number of ways, the capitalism system
is a case of winner taking it all hence encouraging stiff competition. In this case, the person at
the top is getting a fair share of the reward that was collected everyone. The winner pockets
more than what he collects, with the hope getting more than what he has collected propelling
the competition forward. It is obvious that could be perfectly fair because any one can
become a winner. No one is discouraged or discriminated from participating. In this
competition, the case is that an individual who collects a lot is proportionally rewarded with
the biggest share. In that perspective, it appears fare. It is apparent however that the amount
obtained by the winner is determined by the value collected by everyone else. The winner
takes more than what he contributed as n individual and gets part of what the rest of the
participants contributed. In the same way, working hard does not mean that one will win the
contest because there are some elements of chance involved.

Working hard is likely to increase the chance of anyone winning the competition. In the
perspective of such a competition does a modern capitalism process enhance progress and
create opportunities. It is also by the same fashion that capitalism promotes some form of
"work ethic", although not exact because it is hard for an individual to know exactly the
amount of reward he or she has or the amount held by his competitor. At the end of the day,
everyone believes that the amount of reward being given is the same amount they had
collected. This makes the first place winner believe that he has collected he has collected all
the prize not realizing that any gold has been taken from their contribution.

29
Apart from promoting the culture of work, capitalism can also promote the culture of desire.
College textbooks define economics as "the study of individual choice in using limited
resources to satisfy unlimited wants." The market is limited by the number of thing that
people want. This consequently creates a natural trend in the market system for those
individuals who sell in the system to work so that they can increase the human need, leading
to the development of the extra stronger needs hence expanding the market (Rosenberg,
1990).

Whereas marketing is a direct expression of the idea, it actually encompasses the whole
culture and reflects individual attitudes, general entertainment, education system, government
policy and religious values.23

The coming up of the culture of desire led as a result of market capitalism has indeed been
among the biggest transformation in the American society since its independence. A number
of Native Americans believed in strict lifestyles with the Puritans being the most conspicuous
example of this. The same Puritans never allowed dancing to take place and put on black
attire and practiced cultural self denial. Of course, the Puritans were relatively in small
groups particularly during the time of founding of the country.Initially, the average American
was comparatively reserve in the early times. It is apparent that America was not a capitalistic
nation in the early times because people were self-sufficient. A number of communities and
individuals provided for themselves their needs and wants in a direct manner without any
regard to the market system. During the early times, America was mainly a family farming
nation until the mid nineteenth century

Consumer culture and advertising had become significant in the early twentieth century when
the American capitalist economy started thriving. Later on consumer culture and advertising
increased with the adoption of radio although it was not realistic until mid 20th century with
much concern on the use of television and movies.

In terms of analysis, it is obvious that a rational need for a particular commodity has been
enhanced by the industry itself. However, it is the overall consumerism culture that has a
bigger influence. All the social and media practices that improve the desire are generally
embraced by the capitalistic culture due to the promotion of the need itself even when it is not
directly related to the a certain product, enhances the culture of consumerism and a
significant portion of advertising is not related to the promotion of a particular product, but
generally about promotion of the culture of desire.24

It is very important to remind ourselves that economics is the study of individual choice in
connection to limited resources. Fatty foods in America today are not scarce resources. In
terms of making a decision, people are mainly forced by their needs to choose fatty foods
over others even if the choice for such is not rational. Such acts have resulted in the
capitalistic market economy concentrating on marketing and production of fatty foods which
they can sell easily to people because of the instinctive desire they have. The culture resulting
from marketing feeds on these works and needs to make them more .

23
Surbhi s,Difference Between Capitalism and Communism,KEY DIFFRENCE(July 18, 2016,3: 24 P.M)
https://keydifferences.com/difference-between-capitalism-and-communism.html
24
Mustafa rahaman,History and Backround of Communism,STANFORD EDUCATION(18 TH MAY 2015, 5:45
P.M) https://cs.stanford.edu/people/eroberts/cs201/projects/communism-computing-china/index.html

30
Traditionally, many religions have come up because of the effort to limit the overloading of
the normal needs for selfish gains. The setting free and deepening of human passion and the
need creates the desire, and that the same demand moves the goods off shelf to satisfy those
needs, hence making profit for the sellers. Commercialization of sexuality, because sex is a
basic human need, is the initial result of capitalistic market structure.

There is a direct marketing of sexuality. However, sexual cues are also highly linked to non-
sexual goods in capitalistic economies. By relating sexual signals with goods like cars for
instance, the biological need is stimulated. People tend to believe that some products can be
achieved by behaving in certain manner.

This is not just in the perspectives of adverts, but all forms of media including stories, books
and music. People are highly influenced by things they see and would want to imitate them
and see the consequences of the same things when applied in real life situation. Without
capitalism, the society would have experienced a different form of life that is full of
limitation. Capitalism has enabled people to choose independently what they want for
themselves without considering the moral perspectives related to such systems of lifestyles.25

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CHAPTER 6: FIELD WORK

FIRST INTERVIEWEE:

1. what is your name?

Ans: my name is shivani pandey

2. what do you do?

Ans: i am a law student.

3. which system according to you is better for the contemporary society: communism or
capitalism?

Ans: communism because the rift between the haves and have not’s is very wide. For the
promotion of fair distribution of facilities, goods and basic amenities,communism is the key.

4. how far do you think is the Marxist ideology applicable with respect to the contemporary
society?

Ans: it is not applicable as it is an extremist ideology and proposes the fall of state and law
and that is not possible . if at all it happens ,it will culminate into a chaotic society that will
abound in various conflicts. I would say that mild form of communism i.e. socialism will be
best suited.

5. Which ideology regarding communism is the best and the most practical one?

Ans: revolutionary socialism.

6. which type of capitalism according to you can work in the best interests of a state?

Ans: as already mentioned, i do not support capitalism(of any type).

INTERVIEWEE 2:

1. what is your name?

Ans: my name is deepankar

2. which occupation do you practise?

Ans: i am a teacher.

3. which system according to you is better for the contemporary society: communism or
capitalism?

Ans: communism

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4. how far do you think is the Marxist ideology applicable with respect to the contemporary
society?

Ans: totally applicable. See, marx prognosticated that after capitalism,socialism will come.
When USSR brought communism, it was brought directly from feudalism. So,for this step
jump kind of thing ,USSR did not sustain. But now we are witnessing the slow but sure
undressing of naked capitalism and right wing hegemony all around the world. So i think the
right time for advent of communism is not very far,capitalism being well entrenched.

5. . which ideology regarding communism is the best and the most practical one?

Ans: no doubt anarchism. People often wrongly comprehend and interpret anarchism, but the
fact is that it can make a society literally for human beings and not for animals. If the
constituents can really perceive themselves as humans there can be no better system than
anarchism.

6. which type of capitalism according to you can work in the best interests of a state?

Ans: mixed economy, for sure. If it is brought in the correct sense of the term , i.e if a fine
blending of capitalism and socialism can be achieved, then there will be no better thing than
that. Positive things of both systems can eventually bring the best kind of society in
consequence.

INTERVIEWEE 3:

1. what is your name?

Ans: swaraj

2. what do you do?

Ans: i am a lawyer

3. which system according to you is better for the contemporary society: communism or
capitalism?

Ans: capitalism. India is a democratic country and has a multitude of cultural,social and
economic diversification,which would be undermined by the incoming of any ideology which
aims at unifying the masses’ identity as one,which communism basically aims at. Therefore
capitalism is the better option

4. which ideology regarding communism is the best and the most practical one?

Ans : i don’t support any form of communism.

5. which type of capitalism according to you can work in the best interests of a state?

Ans: the indian masses,at best needs a system as diverse as its masses it, and mixed economy
is the answer. In mixed economy, both private entities, as well as state sponsored institutions
are present ,giving flexibility to its citizens. Hence, having a mixed economy is more

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favourable option than any other option. Economy of the country must resonate with its
population to give its people ample space to accommodate itself. And in india’s
scenario,where the state needs to be a stakeholder in the economy , actively participates by
having its very own institutions at active participation in the economy.

INTERVIEWEE 4:

1. what is your name?

Ans: my mane is shatakshi

2. what do you do?

Ans: i am pursuing b.tech from NIT,patna.

3. Which system according to you is better for the contemporary society: communism or
capitalism?

Ans: capitalism

4. How far according to you is the Marxist ideology applicable with respect to the
contemporary society?

Ans: the society today stands at a point where the genetic pool of talent is anything but
uniform, and people’s talent are essentially different,hence their level of skills. The wages of
society should essentially be decided on the impact of work of a personhas on growth of the
organisation. Hence, Marxist society ,which advocates for uniform distribution of wealth is
outrightly impractical.

So, from all the interviews that have been taken ,it is evident that the citizens of the
contemporary society still favours communism but not totally. If at all,they support its milder
form i.e socialism and even the communists consider mixed economy as the best that can be
implemented in a state. Also, according to some of them the Marxist ideology is outrighly
impractical if we talk about its implementation with respect to the contemporary society.

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CHAPTER 7: CONCLUSION AND SUGGESTION

Communism versus Capitalism is a debate that has raged on for over two centuries. Whether
to allow everyone equal opportunities and to do with those opportunities as they please or to
mandate class equality in order to keep peace has in itself been the cause of wars. Karl Marx
and Friedrich Engels saw the working class of the world--the proletariat--being squashed by
the greedy business owners--the bourgeoisie. In their view, the bourgeoisie owned too much
and the proletariat had no chance to make their own fortunes. In Marx and Engels Communist
Manifesto, they propose doing away with private property, nationality, and even countries in
order to take power away from the bourgeoisie

"spirit of self-help" is the main cause for success in individuals and is the source for the
strength of nations. Marx and Engels would disagree. In their opinion the working class have
no country because it is all owned by the bourgeoisie. a world in which every citizen, with
hard work and determination, can become as successful as they want to be. He even points
out that some will naturally succeed more than others and that everyone may not rise equally.
this is due to a person’s ability, not the upper class making it impossible. To Marx and
Engels, it is exactly the opposite. Marx and Engels believe that the members of the working
class are slaves to the bourgeoisie and that the working class had their opportunities for
success taken away by industrialization.

Throughout history, there have been many systems developed in order to have a better
society. Two of the most analyzed, and debated systems that have tired to change an
economy for the best are communism, and capitalism. Communism, and capitalism have
been compared on many levels, such as why they will or will not work, and which one works
better. Throughout this project I have concentrated on the differences, and similarities of how
each operates, along with the benefits, and problems that each of them produces.
Both of these economic systems theories came about around the same time, in the late 17th to
mid18th centuries.

This is the theory of a free market, based on supply and demand to take care of the consumer
welfare. Capitalism gives people the freedom to do as they wish, and allows them the
opportunities to work to gain great wealth, or to just survive in the society. While
communism sets direct demands on the work you do and what you need to produce, so others
can benefit as well as you from your hard work.

There are many different outcomes and problems that can occur as a result of the different
systems. The benefits for communism are set up on a larger scale that takes time and effort,
as for capitalism hard work produces quick gains. Since it is harder for people of communism
to see direct results from their hard work, there can be a tendency of people doing less, but
still receiving the same as everyone else. Thus, there needs to be some type of point system,
which makes sure each person does enough work to show for the goods received. If the work
is not done then something needs to be done, such as not giving them their share, jail time, or
kicked out of the community, resulting in poorer living standards. Capitalism however, gives
each individual a choice of the benefits they will receive from working hard or not. You still
have the chance to be poor, but unlike communism you have the chance to become rich. In
communism the hardest workers receive the same, but in capitalism the hardest workers reap
the most rewards.

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Why Socialism or Communism don't work.

If you don't own it, your not going to work or take care of it. Look at apartments that are
turned into condos. When the apartments are rented, the renters don't own the apartments.
They are not likely to care if something gets broken and mistreated thus lowering the value,
because it is not theirs. It is the landlords. It is his problem. (Who cares, no skin off my
nose?) However once the people buy the condos and it becomes their property, they now
have a vested interest in keeping it in good shape. While they were renters they were living
under Socialism (no ownership). Once they brought the condo, they became Capitalist.
(ownership) and their thinking changed.

Under true Socialism or Communism, Steve Jobs could not have brought the parts for his
prototype computer. If he knew that his hard work, would never allow him to make more
money then his neighbor who spends his time watching mindless TV shows, why would he
even bother to waste his time trying to invent something new and useful. Why not take it
easy? Everybody else does. In Germany and France, union employees get months of paid
vacation time.

Socialism and Communism kill the 'will' to work, competition, innovation and creativity.
Why compete to work? You won't make any more money. Why spend time innovating new
ideas, or being creative, there won't be anything in it for me. As a result they fail to provide
goods and services for their citizens. The Soviet Eastern Communist countries of the 20th
century were noted for not having much goods and services for their citizens. Yet, the ruling
class always had plenty of everything, and it was usually imported from capitalist countries.
While we have rich people in America, we also have a large middle class, that live
comfortable lives. Even many if not most poor people in America have refrigerators, TVs,
and food on the table.

Socialism and Communism cost money:

Under Semi-Socialism in many Western European countries, the citizens are taxed at high
rates of 50% to 75% of their incomes. In return the State provides cradle to grave coverage of
health care, union jobs, subsidized corporations and subsidized transportation systems. While
the citizens in these countries live comfortable lives they pay a high price for government
services.

Under the Soviet Communist rule, the citizens are allowed to keep very little personal goods.
Effectively the state takes all the business profits, and gives the workers ration cards to buy
food, and clothing. Other personal items such as TVs, radios, AC units are hard to come by,
and are rationed out by the state, if you can prove you need them.

In the old Soviet Union the government paid the workers with ration cards, but the cards were
only good in government control stores where there were few goods of poor quality. So
citizen did not feel compell to work hard for so little. A common saying in the USSR
was. "We pretend to work, and they pretend to pay us."

Communism: no freedom!

Since Communism controls all goods and services, the individual is at the total mercy of the
State. You have no rights except those granted by the State. The old Soviet Union was a

36
police state, with total control over its citizens. Government Conrol has an inverse
relationship to Personal Freedom. The more control government has the less freedom
individuals have. At the two extremes you have either a total dictatorship or you have total
anarchy.

In a capitalist society individual rights come before the benefits of the state.

Capitalism isnt perfect, but in capitalism if you are willing to work hard, then you will have
food and a roof over your head. In communism everyone gets the same amount of money,
inequivelent to the work that they do . You can be a rocket scientist who worked hard your
entire life, or a bust boy, you would have the same amount of money. There is no room for
individual rewards. In life I believe people come before ideas.

 The human personality is compatible with the capitalist system more than the
communist one.

Humans are by nature, greedy, and this is not always a bad thing. If we want to achieve
something and there was a reward for it (usually a monetary reward) then we'd go to greater
lengths to achieve it. Capitalism is most associated with this proportionality -- the more the
reward, the more effort we put in. Ultimately all efforts of every member in a communist
society will be normalized by the monetary factor, and we will see the advance of
technology, economic and social sectors greatly become counter-productive.
Yes for a fair and rewarding society, no for an unhappy one.

Hence, by going through all the points that have been mentioned above,. capitalism works in
the better interests of a state instead of communism.

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BIBLIOGRAPHY

BOOKS:

1. KARL MARX,DAS KAPITAL,PENGUIN CLASSES,FEBRUARY 21st 1848


2. DAVID FRIESTLAND,THE RED FLAG: A HISTORY OF COMMUNISM,GROVE
PRESS, NOVEMBER 1ST 2009
3. ARCHIE BROWN,THE RISE AND FALL OF COMMUNISM, ECCO,JUNE 9TH
2009
4. KARL MARX, THE COMMUNIST MANIFESTO, PENGUIN CLASSES,JUNE
27TH 2009
5. ALEKSANDER SOLZHENITSYN, THE GULAG
ARCHIPELAGO,HARPERCOLLINS, FEBRUARY 1ST 2002

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