The Benefits of Communism in Economics

1.2           Introduction

The word “communism” rooted in France in the 1840’s. However, it just changed a modern meaning only in 1918 when V.I. Lenin fought revolution in Russian empire and it was named by his party called communist (Pipes. R, n.d).

Communism is a variant of socialism. On the other hand, it is also economic system where all products are controlled and managed by a central state authority. On the one hand, there is also a restriction on ownership of personal property. In communism, personal belongings such as clothes, watches and shoes are allowed to be owned by individuals and the houses are owned by the state (Umar Farooq, 2011).

In communism, everyone is assigned to work by the state. At the same time, people do not have choice of their own. However, the state provided all the social services such as hospital, education, recreational and facilities (Umar Farooq, 2011).

The following points are called common planning and can be categorized into 5 different types.

1        Collective or state ownership of capital

Capital resources such as money, property and other physical assets are owned by the State. There is no private ownership (, n.d).

2        Inputs and outputs are determined by the State

The State has very details planning mechanism in place that determines the level and proportions to produce goods and services. Local planning authorities are handed 1 year, 5 years, 10 years. For instance, in the case of China, up to 25-year plans. Inputs are assigned according to the plans and output targets are set (, n.d).

3        Labor is assigned according to state plans

In a command planning economy, there is no choice of profession. When a child is in school, a streaming system allocates people into designated industries (, n.d).

4        Private ownership is not possible

Under a command planning system, an individual cannot own shares. People are assigned residences by the State (, n.d).

5        Prices and paying for goods and services

Prices are planned entirely by the State with little regard for the actual costs of production. Often a currency does not exist in a command planning economy and when it does, the main purpose is for accounting. Instead of paying for goods and services when we need to buy them, we are assigned goods and services. This is often also called rationing (, n.d).

However, comparing with western democratic and capitalist societies, the price mechanism is a fundamental operator in allocating resources. The laws of demand and supply interact, the price of goods and services can predict to producers and consumers alike to determine what goods and quantities are produced. It also helps to predict what the future demands and quantities will be (, n.d).

The law of demand described that the higher the price of a good or service, the less the amount of that good or service will be consumed. In other words, the quantity of a good or service rises demanded when the price falls and falls when the price increases (, n.d).

After analyzing on the economics system of communism, we can determine the following as benefits.

1                    Careful life

2                    Rapid development and economic growth

3                    Full employment of manpower

4                    Equality in distribution in wealth

5                    Following the orders are the merits of communism

6                    No competition between the civilizations (Umar Farooq, 2011).

1.3           Problem Definition

Nowadays, a lot of people seem that “Communism is great on paper, but it doesn’t work in reality!”.  Every place it has tried to create communism on a large scale has resulted in one or more of the following points (, n.d).

1    Dictatorship,

2    Mass Murder,

3    Abject Poverty.

Every single one has resulted in at least one of these three points (, n.d).

Similarly, communism is a political thought that suffer from large-scale public strong disagreements. Although countries like North Korea, Cuba and China still continue to practice communism in its adapted forms, it has been widely-accepted all over the world that state controlled economy is a downright failure. However, despite public strong disagreements, why have a few countries continued to maintain this political system? Is communism a practical idea? In a few days, communism may be just as practical as any other capitalist concept and can bring about development in a country. But there are a lot of benefits that can bring a country’s economic growth (, n.d).

At the same time, when everyone speaks loud about democracy, is this really help to reduce world poverty or wars? However, in real life, the one itself called America attacked foreign countries and owe the highest debt country in the world (, n.d).

1.4           Arguments with citations

In order to meet the main purpose of this research paper, I am going to describe on the benefits of communism in economics, in order to support my arguments on western democratic and capitalist societies.

Argument 1

Equality in distribution in wealth and Full employment of manpower (Umar Farooq, 2011).

1        People are equal. In a communist regime, people are treated equally in the eyes of the government regardless of education, financial standing, et cetera. Economic boundaries don’t separate or categorize people, which can help mitigate crime and violence.

2        Every citizen can keep a job. In a communist system, people are entitled to jobs. Because the government owns all means of production, the government can provide jobs for at least a majority of the people. Everyone in a communist country is given enough work opportunities to live and survive. Every citizen, however, must do his or her part for the economy to receive pay and other work benefits (, n.d).

Argument 2

Rapid development and economic growth and Careful life (Umar Farooq, 2011).

1        There is an internally stable economic system. In communism, the government dictates economic structure; therefore, economic instability is out of the question. Every citizen is required to work in order to receive benefits, and those who don’t have corresponding sanctions. This creates an incentive to participate and to encourage economic growth.

2        Strong social communities are established. In communism, there are certain laws and goals which determine resource and responsibility allocation. Consequently, it can build stronger social communities and an even stronger economy (, n.d).

Argument 3

No competition between the civilizations and Following the orders are the merits of communism (Umar Farooq, 2011).

1        Competition doesn’t exist. In communist societies, everyone can work harmoniously without stepping on each other’s toes. Work, responsibility, and rewards are shared equally among the citizens. If people have no sense of envy, jealousy or ambitions that counter the goals of the state, then a harmonious economic development can be maintained (, n.d).

2        Efficient distribution of resources. In a communist society, the sense of cooperation allows for efficiency in resource distribution. This is very important, especially in times of need and in emergency situations (, n.d).

1.5 Conclusion

In a perfect world, everyone would have food and shelter, and a true ultimate society would be lacking of sexism, racism. However, for most of the world’s population, this perfect society just isn’t possible. But I believe that communism is one proposed solution to these problems and to change something or in other word, killing people especially unnecessary people (McGrath, J, n.d).

In fact, we have been talking about democracy, communism and socialism. Even though we do not exactly understand about this kinds of system mean, most of the people seem that communism is kind of killing massacre people. However, in order to change something, we have to kill people who those really do not listen very well although there is always ways to solve instead of killing. There are good examples for communism. When we look back to China history, Mao Zedong created communist government in order to change China and its economic growth. The plan was successful and useful.

In my point view, killing people is not terrible and horrible. Even though there are always to solve, for instance, Gandi’s non-violence alternatives. However, if we kill people who just look their wealth and their authority, we must find and have good reasons to kill and for better future and for better world. Sometimes, we need to use this such kind of system called communism. But, it is not useful all the time and when the time come, we have to change another ways of title in order to create better future and better world.

By Lin Ye Htut Aung 10212052

1.5           References (n.d). Why communism does not work/ is a bad ideas? Retrieved on 25th

December, 2013 from (n.d). The communist economic system. Retrieved on 25th December, 2013


Umar Farooq (2011). What is communism- disadvantages and advantages of communism?

Retrieved on 25th December, 2013 from (n.d). Benefits of communism. Retrieved on 25th December, 2013 from

McGrath, J (n.d). How communist works. Retrieved on 27th December, 2013 from


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