Capitalism and Communism: A Comparative Analysis

Throughout history, various systems have been set to govern societies around the world. Capitalism and communism are the two most analyzed and debated systems that affect the economy and society in very different ways. They are concepts that can be analyzed through a multitude of disciplines. This paper attempts to draw a comparative analysis between capitalism and communism through the lens of sociology. It explores the historical context of both the ideologies and also discusses the contemporary relevance of the same, such that one can see the distinction between them.

The radical withdrawal from the 16th century economic system, mercantilism, that dominated Europe for many centuries was brought forward by Adam Smith. Often known as the father of capitalism, he is credited with establishing political economics with his disquisition An Inquiry into the Nature and Causes of the Wealth of Nations. Capitalism which is based on the free market or free enterprise promotes private ownership and individual economic freedom. The institutions of means of production in a nation are usually not owned by the government but rather by independent individuals. Laissez-faire or free competition is the most important characteristic of capitalism that highlights economic freedom for individuals without the interference of the government. This system keeps prices as low as possible for consumers to seek unlimited amounts of products for the least amount of money. Supply and Demand would be another important characteristic of capitalism which discusses how prices are controlled from getting either too high or too low by increasing and decreasing prices that directly affect the supply and demand of a product.

Communism on the other hand was developed by Karl Marx in the 19th century due to his dislike towards capitalism as it increased the gap between the rich and the poor. The system allowed for the more capable people to occupy the top which led to the rest of the population struggling to survive in the bottom. Being the father of communism, his view on capitalism was an “outmoded economic system that exploited workers, which would eventually rise against the rich because the poor were so unfairly treated (2009).” Communism’s main goal was to replace the principles of capitalism as according to Karl Marx, the society was ruined with the unfair treatment of the poor. Their main principle highlights the prohibition of private land ownership in the hopes of eliminating the gap between the rich and poor and promoting equality. According to communism, private ownership encourages greed due to private ownership, so its prominence lies in its main principle of shared property for the direct control of the economy by the people.

Also Read: The Communist Manifesto – Summary

Historical Context

The use of capitalism developed as a popular system in the 16th century but its existence dates back to ancient times. The rise of the textile industry in England was crucial to the popularization of capitalism. From here, expanding capital that supported production for the economy rather than religious institutions made it prominent and differed it from the systems before. Along with capital came economic disparity as the rich seemed more worthy and supportive of the system rather than the poor and this allowed for it to create a gap between people that can be observed to this day. Furthermore, there was a major price inflation that resulted from the supply of metal. This allowed for mercantilism to take over the 16th-8th century which allowed for economic development by setting policies that supported monetary systems and private institutions.

With time, the Industrial Revolution came around in the 18th century which developed technical practices which was reflected in Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The advocation of economic development with free trade, self-regulating markets, etc was all part of the policies in the 19th century. Moreover, industrial capitalism was also established around this time which created a wave of industrial workers which inspired philosophers like Karl Marx. World War I was also a major play in the evolution of capitalism. However, around World War II and its effects, there was a decline in international markets and The Great Depression had terminated governments’ noninterference with the economy. While major capitalist countries had regained their confidence in the system, by the 1970s many empathized with socialism due to the massive economic inequality it had created and questioned its stability in the long run.

Communistic ideas can be dated back to Plato’s Republic in which he explains the ideal state that contains an entire community that acts as a large family sharing common ownership in all aspects and avoiding private ownership due to its tendency of increasing selfishness. Similar thought processes encouraged monks to swear to serve and share their possessions with the needy.  Sir Thomas More’s Utopia (1516) further discusses monastic orders like the elimination of money and the idea of sharing everything like food, houses, and other assets.

Communism as a system was birthed from the rise of the Industrial Revolution in the 19th century. Karl Marx disliked the idea of high economic productivity at the rate of the distressed working class, so he developed theories that supported the idea of common ownership that avoided class struggles and private ownership. Engels, who was also horrified by the class-divided society, so he accompanied Marx to detail the struggles and poverty that the working class lived in. His The Condition of the English Working Class explained the poverty and sickness that haunted the proletariats or the working class and that the only way to end this struggle is to replace capitalism with communism. They detailed that in a communist system, industrial products such as factories and railroads would be public property and that it would benefit everyone equally. One of their major works, The Manifesto of the Communist Party (1848) encourages a group of radicals, known as the Communist League, and critiques capitalism and its implications and further sketches out a future communist system.

Perception through contemporary culture

Capitalism and Communism are sustainable through multiple contexts and time periods as far as ideology and application of the same in a societal and economic structure go. They are hence thoroughly discussed topics even in terms of contemporary culture. Contemporary culture explores capitalism in a way that exposes the role of excess wealth in the drastic divisions that layer social stratas. Communism, however, discusses and critically analyses Karl Marx’s theories and tries to express opinions on the evils and redundancy of capitalism.

Economic practices, social reforms and representation in media are all democratically enabled due to the presence of social media and modern techniques that encourage open discussions on digital platforms. Digital society as a whole serves as a space to evaluate feudal systems in terms of capitalism and communism and hence interprets and shares data with an overwhelming amount of mixed responses, views, comments and strong opinions. For example, digital societies create vaults that function within extremes. Capitalism historically originates from western thought and with the west’s massive influence on the rest of the world has allowed it to dominate economic policies and institutions.

Due to this, throughout history, there has been a massive backlash towards communism and its ideals. This can be backed up by Noam Chomsky’s five filters of Mass Media. He states in one of his filters, which is known as Anti-Communism, and explains that it is a control mechanism. He details that this filter is quite often used to scare the public of the evils of communism to keep it from threatening the very economy that dominates the world as of now. To Noam Chomsky, communism directly threatens the structure of classes and superiority status, and to avoid affecting this, the media uses this filter as a tactic to keep the economy running. Even though communism can be construed to be a topic of contention to this day, many continue to discuss its detrimental or essentially qualitative impacts. While some see it as a way to bring equality and fairness to society and allow for all citizens to have facilities, others believe that heavy control of the free market by the government could be seen as problematic. Overall, it is safe to say that the multiple and diverse viewpoints on both communism and capitalism, including its relevance in pop culture and issues to do with societal flaws are strongly conveyed and pondered over even now, hence validating and substantiating its perception in contemporary times and its generalizability through various time contexts.

Personal Opinion

While of course both the systems have crucial advantages but also massive implications, it should be noted that it’s not the idea of which system is worse but who is controlling the system. Both the systems are capable of advancing the nation economically and socially but the government’s policies and how they are being utilized dictates the whole narrative. There are current examples of nations like the United States and China who follow both of the systems. Economically, they both are one of the most advanced countries in the world but socially, they continue to have problems to this day. The United States, a major capitalist country and China, a major communist country have struggling people begging the government to implement better policies. The working class struggle and minimum wage problems in America and the detention of Uyghurs in China are contemporary problems that are affecting thousands of people. People continue to debate on social media and through academic papers on which system is better, understanding that both systems have massive implications as the system itself might not be the problem but the people who are controlling the system might be the actual problem.


In conclusion, capitalism, a free market and private ownership supporter dominates the world due to its liberal policies and the freedom it gives to the people to grow with their capabilities and communism, a public ownership system that prioritizes equity for all and allows for everyone to receive facilities equally, without being exploited in any way. Both the systems contain pros and cons but the way the policies are being set and enacted is what depicts the situation of a nation. These systems have been widely debated to this day, trying to figure out which system is better. This is extremely crucial, especially in the current times as violence and societal struggles only continue to increase due to economical failure. No matter which system it is, both of them demonstrated massive implications, especially the social aspects. The importance of reforms needs to be prioritized, no matter which system it is to help better the nation economically and socially.


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Neha is currently pursuing a degree in Sociology paired with International Relations and Media Studies. She aspires for a global career as an academic researcher and advocate of humanitarian action. She is deeply passionate about human rights and social justice, and she profoundly researches socio-economics, politics, and public policy to better understand the society and its institutions. One of her biggest accomplishments would be starting a free school in her backyard for kids with no access to education during the pandemic.