Was Karl Marx a communist or a socialist?
Karl Marx was the co-author of The Communist Manifesto and an avowed communist. However, he recognized that promoting socialism was a means of achieving communism.
What is the difference between communism and socialism?
Socialism allows for some private property, while the government maintains control over businesses and resources in the economy. Communism goes further by abolishing private property. In practice, the differences are minor since both systems give the state ultimate control over an individual’s economic liberties.
Who are the intended beneficiaries of socialism?
Historically, the only people who have benefitted in “socialist” or “communist” countries are those who control the political system. Living standards fall or stagnate, personal liberties are curtailed, and economic opportunities shrink for most of the population, especially when compared to countries that embrace capitalism. The Soviet Union, Cuba, and modern-day Venezuela are clear examples.
Who benefits from capitalism?
The twentieth century demonstrates what happens when countries reject state-controlled economies and embrace capitalist economies. Incomes rise and people are lifted out of poverty. Critics of capitalism often contend that the rich gain but the poor don’t. The truth is that both gain, especially when compared to socialist alternatives.
What is the role of government in a capitalist economy?
The government always has a role to play in even the most “capitalist” economies. It acts to enforce contracts and uphold the rule of law. Since free-market capitalism is predicated on voluntary agreements, the government provides assurance that any injuries done to one another in the form of violence or breaking of contracts is punished with just compensation.
What is the role of government in a socialist economy?
The government centrally plans the economy in a socialist economy. Individuals must obtain permission from the government in order to work, change occupations, and even purchase scarce goods.
Does capitalism allow for large government assistance programs?
Yes. Many people believe that the larger the social safety net, the more “socialist” a country is. But that’s not necessarily the case. Under socialism the government owns the “means of production” and makes economic decisions instead of individuals. Large government transfers are consistent with market economies that tax economic activity, but ultimately leave individuals free to work and run businesses.
How are prices determined in a socialist economy?
Supply and demand determine prices in a capitalist economy. If consumers and producers can agree on a price for a sale, that is what the price will be. In a socialist economy, it is the government who sets the supply and price level of products. If demand is higher or lower than what the government supplies, there are shortages and surpluses, respectively.
Proponents of socialism claim that it will lead to a more equitable system of prosperity for the masses. Is that true?
Historically, no. The most prosperous societies have traditionally owed their success more to capitalist than socialist policies. Modern examples of Cuba and Venezuela, or China before allowing a more capitalist economy, show little to no effect in socialism’s lifting their poorest citizens from poverty.