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Human Behavior
Capitalism vs Communism

Flaws of Capitalism. Flaws of Communism.

The basic tenet of Capitalism is that 'If individuals are free to act in their own best interests, the laws of supply and demand will guide the economy to operate most efficiently'.

Flaws of Capitalism:

  • The assumption that each person "knows" what is in his best interest. For example, who really "knows" the BEST way to invest their money for the next 5 years?
  • Even when a person knows what is in his best interest, will he act in his best interest? For example, people smoke even though they have the knowledge that it is not in their best interests.
  • Actions taken in an individual's best interest does not mean they are in society's best interest. For example, a man can literally use cash to start fires to prove his incredible wealth, but that money could have been better spent on other causes more beneficial to society.

The basic tenet of Communism is that 'Each man should contribute accordingly to his abilities, and receive according to his needs. Also, one for all and all for one. Also, treat others as you yourself would like to be treated'.

Flaws of Communism:

  • Communism assumes that all people will seek to stay at the same level as everyone else, but the reality is that most people will try to do something to "get ahead" of others.
  • Communism needs a mechanism, a governing body, to decide how to redistribute the wealth. This therefore assumes that the individuals that act as part of this governing body would not seek to promote their own interests over that of others. It also assumes that the governing body has perfect information, and perfect wisdom to make the appropriate decisions about how to redistribute the wealth.
  • Giving equal resources to all individuals sounds fair on the surface, but many resources may lie dormant. For example, society could give everyone a Pentium 233 computer. Some people would use it, some would not, and some would wish they had a Pentium 466 computer so they could do more, but the equality system would not allow this unless society could provide the Pentium 466 to everyone. The new technology must be made available to a priviliged few and accepted and desired so that society can determine whether or not the new technology will be mass produced for everyone.
Opinion: Americans generally have an overly negative opinion of Communism. This leads the US to a number of mistakes such as the training of Afgan rebels (including future Al-Qaeda members) in the war against Communism. If the US was not so blinded by the hatred of communism, perhaps we would not have trained our future enemies.
Challenge to you: Why does the US government so hate and fear communist governments? It is obviously NOT because the governments repress their people because many non-communist governments with whom we are allied are FAR more oppressive than the communist governments (North Korea excepted). Can you figure out what the US fears? Hint: Communism and Capitalism are economic ideologies, so perhaps we fear something about a Communist economic system.
Does Communism work? Some say no because the USSR failed. The educated person will keep in mind that one failure does not disprove the possibility. Russia, now under a "capitalist" system, is FAR worse off than it was under its "communist" system. Also note that China, a communist country not only appears to be working, but doing well and most economists forecast them to be the growing economic star of the 21st century! What about Cuba - it is certainly not doing well; but don't blame Communism or Fidel, blame the US for fifty years of economic sanctions. Without those sanctions, Cuba would likely be a wealthy, thriving, tourist destination.
Final note: I am not advocating communism, I just want you to understand what it is; and what it is not. Do your own research!

Find out more about communism at Wikipedia
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