Capitalism and Communism: Their Common Flaws

Capitalism and communism are two opposing forms of economic systems that have developed in modern times. The basic difference between them is the role of government, that is, the degree of government involvement in the lives of the people.

Both systems are far from perfect. Although communism has collapsed with the implosion of the Soviet Union in 1989, it does not mean that capitalism will triumph. The US financial meltdown of 2008 and the ensuing worldwide recession have brought capitalism to its knees. It remains to be seen how capitalism will adjust to face the future.

To understand both systems better, I try to focus on their flaws rather than trumpeting their achievements. The following are six serious flaws common to both:

Greed resides on the dark side of human nature. Capitalists are possessed by greed for profit and power, which propels them in their pursuits. Do communists have greed, too? Of course they do. They just don’t use the word profit in their vocabulary. Once the communist party solidifies control over the country, huge profits will come readily in the form of party ownership of land, natural resources, and big companies. The ruling elites of the communist party never worry about making a profit. Why? They own the whole country! The people work at low wages set by the government, which the communists also own. The ruling elites only worry about their communist colleagues, who may one day eject them from power. They also worry about the people, who may one day rise up in a revolution.

Capitalism is notorious for generating the inequalities between rich and poor. In a communist country, all the people are made poor so that they appear equal. You can see the inequalities in the streets of a capitalist country but not in a communist one. The inequalities of a communist country are only seen within the party between the ruling elites and other party members. You can also see the inequalities between a communist and a non-communist member, the latter applies to the great majority of the people.

There are only two things to exploit in this world: people and land. In the capitalist system, employers exploit people by giving them lower wages than they deserve. The land with its natural resources is exploited by relentlessly utilizing and polluting it. Do the communists exploit, too? Although exploitation is branded as the sin of the previous regime they overthrew, the communists commit the same sin once they grab power. The people are seldom paid according to their productive talents, but according to whom you know and what kind of family they come from. The communists pollute the land and the environment as badly as the capitalists do.

Corruption means you get something done for your benefit only through special connections or bribing someone. This is a human trait trying to take advantage without proving your talents or efforts. Corruption is very damaging to society due to its unfairness and misplaced incentives. There is always someone who wants to bribe and someone who is willing to take a bribe. Corruption exists in both capitalist and communist societies. The issue is how much and how serious.

The ruling elites of both systems practice hypocrisy all the time. In the capitalist system, the rich always want tax cuts. How can they get away with it? They bribe the legislators, and fool the public into thinking that tax cuts create more jobs. In the communist system, the ruling elites are the super rich since they own everything but not showing it. Cutting taxes is never a problem because they make the laws. They want the people to shut up and put up. So they fool them with all kinds of propaganda about the virtues of serving one’s own country and the political party..

When you are immersed in profit in the capitalist system, you try to make a fast buck without thinking too much about future generations. Although the ruling elites of the communist system don’t worry about profit, they are paranoid about losing power, for that means losing everything. Preoccupied with their own political survival, they don’t think about responsibility to the people.

Both capitalist and communist systems have serious flaws when theyare out of control. The devil is money and power that mess up the world. What about those systems that existed prior to capitalism and communism? They did not fare well either such as the feudal system headed by an absolute monarch, and other variations like socialism, authoritarianism, totalitarianism, and even failed states where almost nothing works. Human societies have taken so long to evolve but still haven’t found the right economic system.

The right system is just an ideal, but is always under the influence of money and power. In fact, we are moving toward there, albeit slowly. What is the essential condition to get there? It is the empowerment of the people. This is achieved by raising public consciousness about the responsibility and accountability of the ruling elites. Modern communications technology, especially the Internet, is acting as a catalyst. People won’t shut up anymore nowadays. When they refuse to shut up, they will refuse to put up very soon.

Since the basic difference between economic systems is the degree of government involvement, which can be good or bad depending on how much and which areas. The six big flaws I have described above can be ameliorated if we have a government that acts effectively and responsibly. This points to the requirement of an enlightened government. An enlightened government is one that is responsible and accountable to the people, not to the ruling elites and big corporations.

(April 2011)

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