The Comparison Of Capitalism, Communism & Socialism

The dictionary definition of capitalism is “an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.” Capitalism makes it so that someone with very minimal wealth and resources can work their way up the economic ladder. Capitalism is like a double-edged sword, on one side if you have a set of skills far superior than others and drive you can get very far but can also make it very difficult to compete against corporations with a lot of money who are already very well established. As stated in our book, large corporations control demand and form large monopolies. Less than 1 percent of corporations produce over 80 percent of the private sectors output.

One example I can think of is in the sport of professional MMA. MMA has been the fastest growing sport in the United State, it was once looked at as a freak show, or human cockfighting. The biggest corporation in MMA is the UFC. The UFC started as a competition to find what martial art would be superior than others. The UFC didn’t become big until two very wealthy brothers named Frank and Lorenzo Fertita came into the picture. They started dumping a lot of money into it and changed the way the sport was perceived. They cornered the MMA market and became very successful. In order to stay successful, they made it very difficult for anyone else to take part on the business side of it. They bought out competitors or refused to go to cities who hosted other MMA events. Very quickly the UFC became a monopoly.

One can say that by the company being so big, everyone under benefits too. Employees are needed to run these events, you need a venue, fighters, officials, announcers, and not only does the UFC benefit but also hotels from people traveling to these events, casinos, restaurants, the list can go down all the way to the person cleaning the windows at the venue, you can call this the trickle-down theory. In theory this would be a huge upside to capitalism, because the more the person on top makes the people at the bottom will benefit too. In reality this is not always true though, many corporations chose to reinvest their money to drive expansion and increasing their profit margins, resulting in paying their workers less, and demanding more from their current workforce. In my opinion, Capitalism has more upside than downsides as a consumer, especially in tech. The race for huge profit margins drives huge technological advances.

Companies are constantly improving their products in order to keep up with the competition. That is great for us as consumers. Socialism as defined by our book means that production is owned by the people for their collective benefit. An example of socialism is our public educational system. Every child that attends a public school gets the same level of education. This can be a good and a bad thing, it’s a one size fits all approach that can benefit some but hinder others. The ultimate goal of socialism is for complete equality. I think in theory socialism sounds better than when its actually applied. Socialism can hinder economic growth and production of goods. Why would there be any incentive for someone to work above and beyond what’s required of them when those who aren’t as motivated will benefit from it too? Communism and socialism are very closely related.

A great number of countries incorporate socialist and communist values. Cuba, China, Vietnam, Russia, and North Korea are an example of some. Often times the leaders of these countries hold all the power and oppress their people. Fair election often never take place, and the quality of life of the people is not great. It was very difficult to find a country where socialism has worked. Most of the time countries that left behind their socialist ways started to notice improvement in their economy. In 1985 Hungary, Israel, and China had achieve higher standard of living than other socialist countries, but they were all reforming away from socialism. Socialism fails because it doesn’t take into consideration the behavior of people, even though in theory it sounds great it doesn’t work well when applied.

Works Cited:

1. MURPHY RH. The Best Cases of “Actually Existing Socialism.” Independent Review. 2018;23(2):283-295