Capitalism versus Communism
In any economic system, the manner in which an economy functions can be determined
by a variety of factors.
However, the most deciding factor of how goods and services are
distributed and revenues are gained is the type of system which governs said economy.
systems, there are several variations, including socialism and fascism, however, the two most
prevalent forms are those of capitalism and communism.
Both methods serve to meet the same
demands and work as the backbones of many nations, however, the manner(s) in which each
system operates differ quite substantially between the two.
To label one system as “better than
the other” would be a hasty conclusion.
Certainly, each has its drawbacks, but for a variety of
reasons, each is beneficial in its own way.
One may determine for themselves which system is
the best, yet, time has shown that more often than not, capitalism is the most effective way by
which to govern a society.
In today’s free world, the economic system of capitalism is by far the most popular and is
usually the most effective.
There are many reasons for this distinction, including that under
capitalism, it is simple to determine the state of the economy.
Under capitalism, the economy
has four main stages which comprise the business cycle.
An economy may experience a period
of growth called expansion, followed by a peak in economic activity.
At this point a period of
economic decline or recession ensues, and is sometimes followed by a period of near inactivity
known as an economic depression.
To determine the state of an economy and where it is headed,
economic indicators, such as interest rates, unemployment, housing statistics, the Price Index
(inflation), and the Gross National Product are used.
However, the most simplistic explanation is
that this system, more than any other, liberates business owners and individuals and empowers
the consumer or the citizen to make the majority of economic decisions.
Under capitalism, the