What's the difference between communism and capitalism?

Wouldn't it be great if money grew on trees?

Everyone could buy what they need. There would never be conflict.

Sadly, that's just not reality.

In a world with limited resources, societies have developed beliefs like communism and capitalism that structure how the economy should be run.

Communism is an economic ideology by Karl Marx in which all property is publicly owned and people are paid according to their economic needs.

In a communist society:

• the means of production (like land, resources, and factories) are publicly owned

• wealth is shared according to need

• the needs of society are more important than individual freedom

• everyone is equal, and there is no government or private property

Capitalism is an economic ideology in which property is privately owned and trade is controlled by competition.

In a capitalist society:

• the means of production are privately owned

• the economy is driven by supply and demand

• individual freedom is more important than society's needs as a whole

• class distinctions categorize people by their economic position in society

Communism

Pros

• everyone's basic needs are met

• no class divisions

• equal access to jobs, healthcare, and other social services

Cons

• lack of economic growth due to lack of competition

• less personal autonomy and freedom

• potential for corruption

Capitalism

Pros

• economic innovation is incentivized

• unrestricted economic and political freedom

• higher standard of living

Cons

• inequality of opportunity and outcome

• society is divided by class

• less economic stability due to "boom and bust cycles"

Capitalism and communism are both economic ideologies, or visions for how the economy should run. In reality, economies are a mix of policies that reflect elements of capitalism and communism.

A mixed economy may:

• protect private property but allow the government to step in for the collective good

• have some industries that are publicly owned because they're considered essential

Communism

• North Korea, Laos, Cuba, China, and Vietnam are the only official communist governments, however none of them meet the true definition of communism.

Capitalism

• Singapore, New Zealand, Australia, Switzerland, and Ireland are some of the most capitalist countries.

• Capitalism is the most influential economic system worldwide.

Welcome to Money Island!

The economy is based mostly on agriculture, manufacturing, and energy. The island is dotted with vineyards that have been passed down from generation to generation, and wine is their biggest export.

As part of its economic policy to promote growth and reduce unemployment, the government has shares in private corporations across a number of industries. The government has also set workers' minimum wage at $25 per hour.

Are you interested in learning more about communism and capitalism?