Definition- there is a number of overlapping philosophies & socioeconomic system that can be described as Communist in nature. But in the most basic sense communism is where all manufacturing, or “means of production” are equally owned by all the members of the state or group. In countries, the government represents the group.
It was first developed by Karl Marx (‘The Father of Communism’) and Friedrich Engels in the mid-19th century, it has been the foremost ideology of the communist movement.
He said it was, “From each according to his ability, to each according to his need.”
To Marx, this meant that people would work at what they loved and did well. They would happily contribute these skills for the good of all. The economy would prosper because they would work harder than in capitalism. “To each according to his need” meant the community would take care of those who couldn’t work. It would distribute goods and services to everyone as they required them. Those who were able to work would be motivated by enlightened self-interest.
Let’s look into some of its characteristics:–
- State Ownership– The states own all the capital in the communist system including all lands, Machines, Factories, personal properties that are abolished or limited.
- Central Planning– It’s not like Capital System where firms freely decide what to produce and consumers decide what to buy. In the Communist System State planning comes into action, the state sets production targets for all goods and services.
- Common Good– Each Individual must sacrifice their own aspirations and freedoms for the common good, the state assigns people to school, jabs, or labor is required by the state.
- The state would control communication and transportation.
- Centralization of credit in the hands of the state.
The purpose is to give to “each according to his need.” The state owns businesses on behalf of the workers, which, in effect, means the government owns a monopoly.
Advantages:-
Communism has a centrally planned economy; it can quickly mobilize economic resources on a large scale, execute massive projects, and create industrial power.
Communist countries have free health care, education, and other services. The plan also seeks to increase the nation’s economic growth, secure national defense, and maintain infrastructure.
Disadvantages:-
Already you may have discovered in above State ownership or common good characteristics. Sacrifice for the common good is less motivating than freely working to improve things for yourself and your family. In communist society, Competition exists within the system itself.
The most significant disadvantage of communism stems from its elimination of the free market. The laws of supply and demand don’t set prices—the government does.
To compensate, citizens create a market to trade the things the planners don’t provide, which destroys the trust in Marx’s pure communism. People no longer feel the government can give “to each according to his needs.”
The countries still follows communism is China, Cuba, North Korea, Laos, and Vietnam.