The Political and Economic Spectrum: Capitalism to Communism

By Albert DeSimone

The continuum from capitalism to communism describes economic systems, though these systems also heavily influence political and social structures.

At their core, they represent fundamentally different answers to the basic economic question: Who should own and control the resources used to produce goods and services while distributing the fruits of economic progress?

Capitalism: Capitalism is a basic economic system that, at its core, is driven by a combination of greed, risk, and reward in a free-market economy. Its primary goal is the acquisition of capital (money). 

Adam Smith in The Wealth of Nations describes a successful economy as the “invisible hand.” Free-market forces are impossible to predict, which encourages people to act in their own self-interest. In so doing, they create an environment of employment and stability: self-interest drives production, production requires labor, and labor creates jobs.

Social Democracy: The primary purpose of a social democracy is to account for the harshness of capitalism through an extensive network of state-sponsored services. These include healthcare, labor protections, elderly care, education, family support (subsidised childcare and paid parental leave), and housing subsidies. 

Social democracies provide for these services through a comprehensive tax system, paying significantly higher taxes than other countries in the OECD (Organization for Economic Co-operation and Development), an international intergovernmental organization of 38 highly developed democracies.

Democratic Socialism: This is the first among economic systems to address the harshness of capitalism by eliminating it. Democratic socialism introduces the shift from a privately run economy to a publicly run economy. 

Democratic socialists believe that the economic needs of the society are better met not with oligarchy and wealth but community and cooperation. It heavily emphasizes decentralization—pushing power down to the local level so everyday citizens can directly influence their communities—strong labor unions, and higher taxes on the wealthy and corporations. 

Socialism: To be completely correct, the unadorned form of socialism refers to state socialism. When people use “socialism” on its own, this is typically what they mean. 

State socialism promotes the public ownership of the economy—from the production of goods and services through the distribution of those goods and services—under the assumption that such a model promotes the greater good and a more equitable distribution of wealth.

As a result, it invites government interference in the economy through regulation in an effort to manage this equitable distribution of wealth.

Worker empowerment becomes worker manipulation as the state further takes control of industry and production. 

State socialism mostly operates in a single-party system. 

Communism: If state socialism is the elephant’s nose sneaking under the tent, then communism is the elephant. In Marxist theory, socialism is a stepping stone to communism, but not necessarily the same thing.

However, there is a lot to be said for that point in his theory. If socialism results in more economic government regulation, it follows that the government will begin to control the entire economic supply chain. 

In practical application, communism operates completely in a single-party system. The goal, however, is to eliminate the need for any party when the goal of economic equality is realized. 

The power of unions and labor are practically non-existent. Unions are integrated into the state apparatus. Vladimir Lenin referred to unions as the "transmission belts" of the Communist Party—nothing more than a tool to communicate party directives downward to the workers, rather than push worker demands upward.

To put it succinctly, "from each according to his ability, to each according to his contribution" becomes the communist ideal, "from each according to his ability, to each according to his needs."

Final Word: Beginning with capitalism, the continuum offers an economy based on risk versus reward. The focus is on the success of the risk takers to create opportunities for those who choose wages over profits. 

At the other end of the spectrum is a cooperative of economic equality. The purpose of communism is to eliminate class distinctions and economic inequality, which will result in a stateless society with no real need for a central state government.

Albert DeSimone is retired from the University of Georgia and resides in Bishop