Reality of Capitalism vs Communism

Posted Nov 01, 2011

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There is a huge, massive amount of debate about Capitalism and Communism. You can find all sorts of debates, arguments, charts, etc. showing the goals, similarities, differences, pros and cons of both these diverse concepts.

Part of the problem is that most of these arguments are philosophical and not really dealing with the real-life uses of these systems. Or if they do touch on the real-life aspects, it is only to point toward some example of why the other side is wrong.

"The fall of the USSR proves Communism is wrong."
"No, the failure of Enron, etc. prove Capitalism only brings disaster."

So which is right? Well ironically, there's one major part of each system that is always hinted at, yet never used as a basis for making a decision.

That part is simply: "What is the natural 'reset' action when corruption becomes too big."

As I said, proponents of both sides like to point out the failures of the opposing system, yet try to explain away the failures of their own. (Or if not, then at least down-play them) When the Reality is that all man-made systems are subject to corruption and failures.

So, if we can assume that failures will occur regardless of which system (or combination thereof) we use, let's examine what those failures consist of, and more importantly, how those failures are most often repaired.

Capitalism

While there's many permutations of it, the major point of Capitalism is that the power rests mostly upon the business owners and managers. And where power lie, corruption tries to breed. So in a Capitalistic system, the failures will occur mostly because of the business owners. (I'm unaware of any major business failing due to unscrupulous actions taken by the janitor.) These failures occur because the owners pay more attention to how much money is made, and not on how it's made. When the amount is more important than the how, prepare for corruption and theft.

In short, Capitalism fails mostly because of greed coupled with poor decisions.

These failures can take various forms, such as:

• Products made (and/or services performed) with lower quality materials than required


• Deceiving customers/suppliers about specific details of a transaction


• Misappropriating funds (I.E. taking money meant for employee health care and spending it on personal luxuries, while insisting the health care is covered)


• Etc.

So what most often occurs during the biggest failures?

• Customers left holding useless or even dangerous products


• Customers losing money


• Suppliers not paid for products/services rendered


• Employees losing their jobs


• Interconnected industries endangered


• Etc.

What's the usual effect of these failures?

• Customers forced to find new businesses to cover what products/services were lost


• Ex-employees forced to find work elsewhere


• If caught/convicted, the dishonest criminals are usually forced to pay back what they can and also serve some punishment, like jail time


• Similar businesses and those in the same industry learn of the failures, and in attempt to ensure their own survival, refrain from those actions which caused the problem


• More honest businesses take this opportunity to woo new potential customers


• The worst cases may require government to assist the victims where needed


• Etc.

While the rare occasional massive failure of a large business (Enron, the Bernie Madoff investment scandal, etc.) can hurt millions of people, the effects of these are an almost natural evening out, with usually very little stoppage of products/services. There are always honest people willing and able to work hard to serve the customers that were hurt in these crimes.

In all cases of business failure, there are other business that take up the slack left by a massive collapse. Even if a city's power company were to suddenly stop for any reason, the small generator manufactures/distributors rush in to fill the void. (unless outside forces, such as government mandates forbid them) Also other power companies large and small would jostle for a chance to supply those new customers.

While it's true that the guilty are not always punished (or not punished bad enough), in a decent Capitalistic system, only a fool would allow them a place of power again.

In short, the failures of a capitalistic system are usually dealt with using methods that, while causing hardship, result in relatively little loss of life.

Communism

In Communism, the source of power rests mostly within the Government (which we must never forget is simply a collection of fallible and corruptible humans) Ironically, while Communistic ideals are against the main issues of capitalism, Communism requires it in order to survive. Government doesn't actually make anything. They wait for the governed people to do the work, and then those who control government come in and decide how they want to distribute the results of that labor. It is the power of distribution (as well as personal gain) that sows the seeds of corruption in government.

In short, Communism fails mostly because of greed coupled with poor decisions.

These failures can take various forms, such as:

• Bribery, or taking money in exchange for illicit favors


• Election fraud or even downright power grabs. Whatever it takes to stay in control of the government


• In various ways, distributing the wealth not to those who most need it, but those who help keep them in power


• Etc.

So what most often occurs during the biggest failures?

• Companies/Industries forced to give up too much in order to continue, causing unemployment


• Assassination of specific people that can endanger the political control


• Mass murder of unhappy, rioting people


• Possible war with other countries to either increase or keep from losing power


• Etc.

What's the usual effect of these failures?

• Unrest among the governed people who are adversely affected by government actions


• Riots


• The dishonest political leaders are often exiled and even killed


• The worst cases may require other governments to assist, even if that means going to war to remove the corrupt leader(s)


• Etc.

In short, when communism, or more specifically government fail, it almost always leads to loss of lives.

And therein lie the most important factors that I can see. Even if we skip the issue of personal property that these two systems disagree with, when we view history one thing is abundantly clear. When businesses fails, it usually happens fairly quickly and the loss of life is minimal. Whereas when government is in the process of failure, it can take years and the death toll can become extensive.

In the end you need both business and government to hold certain aspects of power. However, if I am forced to choose between one or the other as the major holder of power, then I will choose that which brings the least amount of death and bloodshed.

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