What is Communism - Advantages & Disadvantages of Communism

What is Communism
Communism is an economic system where means of production are controlled and managed by a Central
State Authority, and there is also a restriction on the ownership of personal property. In communism
personal belongings, as clothing, watches, and shoes are allowed to be owned by individuals and the
houses are owned by the State.

Communism is the extreme form of Socialism

In communism individuals are assigned work by the State and they are given a bit remuneration of their
service normally in kind. People get ration from Government department. People do not have choice of
their own. They have to be content with whatever is prescribed for them. State provides all social services
such as educational, recreational and hospital facilities.

Advantages and Disadvantages of Communism

Advantages of Communism
1. Following are the merits of communism
2. Careful life
3. Full employment of manpower
4. Rapid development and economic growth
5. Equitable distribution of wealth
Disadvantages of Communism
1. Personal freedom is lost
2. Workers are treated as machines
3. Materialistic approaches to life problems
4. Central State Authority holds all means of production

Advantages and disadvantages of Dictatorship or Totalitarianism

Every form of government has some merits and demerits. Following are some the advantages and
disadvantages of dictatorship or totalitarianism.
Advantages of Dictatorship
Following are the merits of dictatorship

1. Dictatorship establishes a strong government. As there is no opposition, no criticism, all

energies are directed to the achievement of the arms of the state, which can be achieved very
quickly.
2. It provides efficient and prompt administration. It is said that dictatorship is 10 years-
ahead of democracy. The reason is that dictatorship does not believe in consultation
discussion or debates. Since the leaded or ruling party has absolute powers, they can take
quick and prompt actions. They adopt such policy, which to them appears to be most
beneficial. Besides, such people are appointed to do the jobs as are efficient and competent.
In this way aims of the state are achieved in short possible time. We have the example of the
USSR and Germany.
Disadvantages of Dictatorship
Following are the demerits of dictatorship or totalitarianism.

1. Dictatorship regards the state as the end and individual as the means. Under this System the
individual is subordinate to the state. He has no rights. He is supposed to sacrifice everything
for the sake of the state. In this way he became a means to the end of the state.
 2. This system is based on force and violence. It demands complete obedience. No opposition, no
disagreement is allowed, if there is any such opposition, it is crushed. We have the example of
Italy and Germany during the 1920's, 1930's and the early 1940's.
3. This system kills the initiative among the people and makes them indifferent and disinterested in
the affairs of, the state. The people become sheep like. They lose interest in life. The result is
that the government becomes one sided arid cannot continue for a very long time.
4. Dictatorship is a form of government which encourages and spreads war, aggression, hatred etc.
The 2nd World War was the result of Fascism or Fascists dictatorship. This system is not a
permanent one. It continues till the leader is alive or remains in power. It has been seen that
Fascist Dictators are sooner or later overthrown.

What is Socialism, Advantages and Disadvantages of Socialism

What is Socialism
In socialist economic system means of production are owned and managed by the State. Ownership
of means of production is not allowed. In socialism economic activities are carried on mainly for social
gains and personal interest is of less significance. In this economic system the anti social activities like
smuggling and hoarding find no place. Economic activities are planned with the motive of social benefit by a
central planning authority.
The individuals in socialistic society surrender their economic freedom in exchange of assurance of
freedom from wants by the State. It is the responsibility of the State to provide food, lodging and clothing
besides other requirements, by assigning a suitable job to each one of them.

Characteristics of Socialist Economic System

Following are the Characteristics

1. In socialism means of production are owned by the State

2. Economic activities are planned by the central planning authority
3. Absence of competition
4. Equal opportunities to all
5. No economic freedom to the people
Advantages and Disadvantages of Socialism
Following are the merits and demerits, advantages and disadvantages of socialism.

Advantages of Socialism
Following are the benefits or advantages of socialism

Economic efficiency under socialism is greater than under capitalism, the means of production are not left
in the market forces rather they are controlled and regulated by the central planning authority towards
chosen end. The central planning authority makes an exhaustive survey of resources and utilizes them in
the most efficient manner.
In a social economy, there is less inequality of income as compared to capitalist economy because of the
absence of private ownership of means of production. In socialist economic system every one works hard
and paid as per his skills & ability.
One of the benefits of socialism is that it is free from monopolistic practices to be found in a capitalist
society. Since under socialism all means of production are owned by the state, the exploitations by the
monopolist are absent. Instead of private monopoly, there is state monopoly over the productive system
but this is operated for the welfare of the people.

A socialist economy is also superior to a capitalist economy that is free from business fluctuation.
Generally planned economy co-ordinates the action of various producing units, prevents discrimination
between saving and investment and make full use of available resources. It is able to control over
production and avoid general deflationary trend.

I will consider economic growth as an important advantage of socialism because it adopts economic
planning as a means of promoting rapid economic growth. A planned socialist economy functions right
according to the plan in a systematic and orderly manners and marches rapidly on the road to economic
progress.

Disadvantages of Socialism
Following are the demerits or disadvantages of socialism.

There are many disadvantages of socialism but first come in my mind is the lack of economic freedom. In
socialist economic system everything is controlled by a centralized body. Individuals are not allowed to
own any assets, everything belongs to the state. Workers are assigned specific jobs and are not allowed
to change them without consent from the planning authority.

In socialism there is a lot of involvement of bureaucracy and are the drivers of all economic machinery.
The work civil servants are not comparable with the private entrepreneurs. Civil servants merely do the
jobs because it is their duty and they will get paid whatever the consequences. Thus inefficiency arises
and in the long run the economy suffers.

As a socialist economy is a planned economy, every aspect of the economy is to be determined by the
government. Forces of demand and supply do not apply which is one of the disadvantages of socialism.
Thus in the long run the economy becomes state rather than wasted, whereas these make an economy
prosper.

In the final analysis it is the consumer who loses out. Sovereignty of consumer does not apply in a
socialist economy. Consumers do not enjoy the status of a consumer as in a capitalist economy. Choices
of goods and services are able to maximize their total satisfaction.

Socialists claim more equal distribution of wealth but practically it is proven that complete economic
equality is virtually impossible. There is a distinction between the rich and poor. Moreover since it is a
planned economy the poor suffer even more.

Freedom of enterprise, freedom in choice of occupation and many other essential freedoms for an
economy to prosper are out-rooted from society. The true spirit of democracy dies away. The basic needs
Although it has been agreed that the six basic needs in life are met within a socialist economy but all this
is obtained at the expense of economic and political freedom.

It is due to competition that an economy becomes prosperous. The competition between producers and
consumers leads to the production of a good quality product which may even be relatively cheap here it is
one the disadvantages of socialism. Thus talents and initiatives of mankind develop and in the ultimate
analysis the country incurs rapid growth.

What is Capitalism, Types, Advantages & Disadvantages of Capitalism

What is Capitalism
Capitalism is that part of economic systems where productions are owned and managed by private
individuals and institutions. Or it is economic individualism wherein the individuals are the one to decide
what and how much to produced and distributed. They are at liberty to use any technique of production
and produce anything they like. In this economic system, State is to take care of only internal and external
security of the country. Normally the activities related to Defence, Police, Administration and Courts of
Justice are controlled by the government.

A private enterprise economy characterized by the existence of business fluctuations and considerable
unemployment. In capitalism there will be considerable ups and downs – swings of the business cycle
with their inevitable repercussions on the people.

Types of Capitalism
There are two types of capitalism

1. Classical Capitalism
2. Monopoly Capitalism
Classical capitalism
For this credit goes to Adam Smith, in fact Adam Smith the founder of economics presented the idea.
Adam Smith assumed the presence of perfect competition. The state is more or less non-existent so far
as the economic matters are concerned. The State job was restrained to enforcement of contracts,
protection of property, maintain law and order national frontiers. They were on the opinion the State has
no right to interfere in the country economic activities. In this type the principle of laissez-faire dominated.

Monopoly Capitalism
There is no more room for classical capitalism in today’s economic system. Free market, perfect
competition and State’s non-interference in the economic activities are not existed. Perfect competition is
yielded to imperfect competition. Nowadays market is restricted. Now countries are intervening in the
activities of their economic systems.

Main Characteristics of Capitalism

1. Right to own property
2. Profit motive
3. Private ownership of means of production
4. Consumer’s sovereignty
5. Economic freedom
6. Social division of people
7. Price mechanism
Advantages and Disadvantages of Capitalism
Advantages of Capitalism
1. Reduction in cost of production due to efficient control
2. Efficient control of production process
3. Improved quality of goods
4. Consumer’s choice is given full weight
5. Varieties of products
Disadvantages of Capitalism
1. Inequality in the distribution of national wealth
2. Fluctuations in the level of employment
3. Class conflicts
4. Waste of talents
5. Heavy expenses on publicity result into increase in cost and price of the commodity