Capitalism vs. Communism

Introduction

Over the course of humanity, humans have expressed many different ideals about equality, with a few main ones rising to the top. Capitalism is when the market is regulated by the people. It is an act of self-interest from both the buyer and the vendor, standing on the pillars of private property, self-interest, competition, a market that determines prices in a decentralized manner, freedom of product choice, and limited role of government in the market (Jahan & Mahmud, 2018). Communism, also called socialism, on the other hand, follows the principles of a single-party dictatorship owning all public property, money, and land (Victims of Communism, 2024). Everything is owned by the government and remains under its control. Both conflicting ideals, capitalism and communism have very different histories, ideals, and controversies.

The Histories of Capitalism and Communism

Though no one knows the exact origins of capitalism, many believe it rose from the 16th century, with some antecedents in the Middle Ages (Heilbroner & Boettke, 2026). Capitalism swelled during Protestant times, where societal expectations deemed wealthier people as more virtuous, which was an important part of Protestantism, as frugality was often seen as a sign of higher religious standing and stronger religious sanction. Capitalism did not spread much further than this until the 18th century, when England switched its sources of revenue from commerce to industrialization. This newfound concept was quite different from what people had previously witnessed, so it was summarized by Scottish economist and philosopher Adam Smith, who stated that economic decisions were left up to the free market.

Communism sprung up more recently when Karl Marx wrote his book, The Communist Manifesto, in 1850. Marx believed that society would reduce itself to a struggle between the rich and the poor; therefore, he based his ideas on that theory and created a new ideology that many communist countries followed: the abolition of private property (Victims of Communism, 2024). His writings didn’t spread well in countries that already had a firm form of government; however, impoverished places formed the “breeding grounds” for his writings, since they lacked certainty in their leadership and a desire for a capitalist society. Communism began budding most prominently in Tsarist Russia, led by Vladimir Lenin and Joseph Stalin. After Russia suffered crushing blows from the Russian Civil War in 1917, army and public morale was low; this was the perfect opportunity for the Extremists (believers in Communism) to strike, taking over the current Russian government and all its ideals in an event called the October Revolution. This uprising caused public riots and reduced the country to a wasteland; the Bolsheviks/Communists hung up their flags of victory, with Moscow becoming the hub of communism and expanding out to other countries 1922 (United States Office of Education, 1950). This formed what was called the Soviet Union; this was the main area of communism until its collapse on December 26, 1991.

Artist's rendering of capitalism

Flag of the Soviet Union, the main hub of communism

An map of communist countries between 1909-1991

Conflicting Ideals: Part 1

Following two different ideals, it becomes clear that capitalism and communism are two distinct forms of economic systems. For example, while communism favors control of the people in a just setting, capitalism allows people to start with some rights and climb their way to the top of industries, even if everyone starts on unequal footing. Communist ideals also rely on the ideal that everyone is equal, but underneath the government and other officials. They exercised this ideal in a way that was called “cruel” by many, taking complete control of the government and regulating what goods are to be sold at what prices. However, this did cause goods to be sold at uniform prices throughout, making it easier to access for people with fewer resources. However, capitalism values the markets and industries setting their own prices on items, regulating them through supply and demand.

A graph showing voter preference of capitalism vs. communism/socialism in the United States

Conflicting Ideals: Part 2

This may seem like a negative effect, causing people with fewer resources to be pressed on rations, as they may not have the same priced goods as another neighboring region. Finally, capitalism incentivises individualism, or each person being unique, while communism believed that individualism would lead to government overthrowing and a slow descent into anarchy. Therefore, communist regimes prohibited differences from the norm, allowing citizens to learn certain specialized topics in education and predetermining their lives for them, while capitalist countries allowed individuals to select their own future and work toward it with the resources they could acquire (Hampton Roads Naval Museum, 2020).

Controversies

Raised from almost opposing ideals, capitalism and communism are often debated due to their sheer power in society and how they vary. Pro-capitalist speakers argue that communism is an oppressive form of totalitarianism, denying its citizens basic rights and freedoms while giving the government complete control. They argue the superiority of capitalism by saying that it creates grit in society by having people work their way up the social ladder and allowing markets more freedom, increasing variety and upholding uniqueness. Those favoring communism, however, state that capitalism has individuals work from unequal footing, causing a lack of justness in society, which is something capitalism actually strives to create. Arguing its counterintuitivity, they favor communism because it allows all individuals to stand equally in society, creating a rigidity and ideals that society needs and that capitalism doesn’t provide (Samriddhi Foundation, 2014). This allows society to function in a set manner and remain relatively peaceful, whereas capitalism creates uneasiness and no predictability in one's future, which is especially negative if the person lives in poverty.

Diagram differentiating communism and capitalism

Significance and Moving Forward

Whether one favors capitalism, communism, or any other form of government, it’s important to understand all forms to create mutual peace in society. The American government has struggled with this topic, going through the Cold War, Korean War, and Vietnam War in order to stop the spread of communism and promote their capitalist economy. Many have been affected by this, including war veterans and families of those who died serving in any of these wars, making these economic system debates quite serious in the United States. Citizens can take this solemnity forward, using communism’s ideals of equality for all, strong social communities, and equal distribution of resources, and combine them with capitalism’s ideas of competition and drive to increase civic participation and create a more perfect union, just like our Founding Fathers set us out to be.

The U.S.A is a capitalist country; this diagram shows its GDP per state

Learn More

https://www.worldhistory.org/video/2544/capitalism--socialism-crash-course-world-history-3/

https://www.history.com/articles/communism-timeline

https://www.youtube.com/watch?v=X2ZIDALAkXo

https://www.loc.gov/item/19009131/

https://legalclarity.org/what-is-the-difference-between-capitalism-and-communism/

https://podcasts.apple.com/gb/podcast/communism-everything-you-wanted-to-know/id256580326?i=1000670632779

References

Cawthorne, E. (2024, September 28). Communism: Everything you wanted to know. Apple Podcasts. https://podcasts.apple.com/gb/podcast/communism-everything-you-wanted-to-know/id256580326?i=1000670632779

Crash Course. (2021, December 20). Capitalism, Communism, and Political Economies. YouTube. https://www.youtube.com/watch?v=X2ZIDALAkXo

Editors, History. com. (2025, September 29). Communism timeline. https://www.history.com/articles/communism- timeline

Green, J. (2021, May 30). Capitalism & socialism: Crash course world history #33. World History Encyclopedia. https://www.worldhistory.org/video/2544/capitalism--socialism-crash-course-world-history-3/

Hampton Roads Naval Museum. (2020, October 27). Socialism, Fascism, Capitalism, Communism Background. Hampton Roads Naval Museum. https://www.history.navy.mil/content/dam/museums/hrnm/Education/EducationWebsiteRebuild/RussianPropagandaAboutGermany/Socialism,%20 Fascism,%20Capitalism,%20Communism%20Background.pdf

Heilbroner, R., & Boettke, P. (2026, May 6). Capitalism | definition, characteristics, history, & criticism | britannica money. Britannica. https://www.britannica.com/money/capitalism

Jahan, S., & Mahmud, A. S. (2018, May 10). What is capitalism?. IMF. https://www.imf.org/en/publications/fandd/issues/series/back-to-basics/capitalism

Samriddhi Foundation. (2014, November 17). Debate on capitalism vs. communism. Samriddhi Foundation. https://samriddhi.org/global- entrepreneurship-week-updates/debate-on-capitalism-vs-communism/

Team, L. (2026, May 21). What is the difference between capitalism and Communism? https://legalclarity.org/what-is-the-difference-between-capitalism- and-communism/

United States Office of Education. (1950). Communism | Library of Congress. Library of Congress. https://www.loc.gov/item/2024603211/

Victims of Communism. (2024, August 20). Communism 101: Victims of communism. Victims of Communism Memorial Foundation. https://victimsofcommunism.org/communism-101/

Walker, G. L. (1919). Capitalism vs. Bolshevism. Library of Congress. https://www.loc.gov/item/19009131/

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