announcement

Check our homepage for new, visually rich, fast and immersive experiences!

Everything You Need to Know About a Communist Economy

Communist Economy
In the 20th century, the communist economy was being pitched as one of the best alternatives to replace the capitalist market economy. Despite what we think of it today, back then it had become quite popular in various parts of the world.
OpinionFront Staff
Last Updated: Aug 4, 2018
Communism deprives no man of the ability to appropriate the fruits of his labour. The only thing it deprives him of is the ability to enslave others by means of such appropriations.
― Karl Marx
Going by its simplest and widely popular definition, the communist economy is an economy managed by the communist state. Though correct, this definition oversimplifies the concept.
If the communist economic system is considered so intricate today, it is partly because of its history―Vladimir Lenin's contributions in the 1920s in particular, and partly because of this oversimplification.
Karl Marx and Communism
Communism is defined as a social structure which is typically characterized by the abolition of classes and the common control over the property.
The founder of modern communism, Karl Marx coined this term for a classless, stateless, oppression-free society, wherein the decisions about the political as well as economic policies pertaining to the state, were supposed to be taken by all the members of the society in a democratic manner.
factory
Marx had put forth the new social structure as an apt replacement for the prevailing capitalist system, wherein―he believed―the working class was always subjected to exploitation at the hands of the elite.
authority
He also advocated the idea of the dictatorship of the working class. He argued that it was the need of the hour; the perfect solution for capitalism which he considered a barrier to development.
What Exactly is the Communist Economy?
Broadly, the communist economy is a system based on the thoughts and beliefs of Karl Marx. Even though Marx mentioned the word 'economy' in his definition of communism, he never gave an elaborate description of how communism would function as an economic system.
Soviet Coin
However, taking into consideration the norms of communism, it can be defined as an economy characterized by the common ownership of the means of production, as opposed to private ownership in the capitalist economy.
priority
In the Communist type of economy, social welfare of the people is given priority over an individual's profit.
The belief that the society is more important than an individual in a communist economy implies that each individual is supposed to work as per his or her capacity and gets paid as per his or her needs. In this economic system, only those goods and services are provided which the individuals need, instead of those which they want.
Astrological sign libra
In a pure communist economic system, all the resources are publicly owned, as it is believed that public ownership of resources minimizes inequalities in wealth distribution and helps in realizing the desired social objectives.
Advantages
❒ In this economy, every individual has what he needs, as efficient resource distribution is the core of this system.
❒ Each citizen contributes to the development process as per his capacity. You put your fair share; you get your fair share.
❒ Abolishes economic disparities; thus getting rid of the system where the society is divided into haves and have-nots.
Disadvantages
❒ The communist economic system doesn't take into consideration the fact that all the individuals are not necessarily the same.
❒ This system kills innovation, as lack of competition means there is no desire and initiative for improvement.
❒ As the entire planning process is in the hands of central planners, it tends to delay the implementation of policies.
Examples
Commemorating Statues Of Workers
Even though countries like China, Vietnam, North Korea, and Cuba continue to follow the communist political system, they don't have a communist economy in its true sense―the economic model that was put forth by Marx.
Mens Leather Wallet
If at all, the Soviet Union did have this economic system in place before it came down. Of the existing states controlled by communist parties under a single-party system, Vietnam, North Korea, and Cuba have a centrally planned economy, while China has the socialist market economy.
Early on, the appealing nature of communism earned it a decent following especially in countries where a significant population was the working class. Between 1960 and 1990, the gross domestic product (GDP) per person of communist countries increased by 3.3 times.
In capitalist countries, the same increased by 2.7 times during this period. Most of the countries today, are opting for a mixed economy, instead of tilting to the extreme left (communist economy) or extreme right (capitalist economy).