What is Communism Economic System?

Infouniversitas.com - Hello everyone! The communism economic system is one of the economic systems that has been implemented by several countries around the world, garnering much attention throughout history. However, the discussions often tend to be fragmented and tend to stress on the negative aspects, while the positive influences and core objectives often get overlooked.

The purpose of this article is to provide a deeper and more balanced understanding of the communism economic system, and to give new insights into its implementation in various countries.

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There have been many articles discussing the communism economic system, but many of them lack focus on practical aspects and realities on the ground. Most existing articles focus on the theory and philosophy of communism; with few exploring how the system works in practice, especially in different contexts from one country to another.

I have written this article with the aim to explain in-depth about the definition and characteristics of the communism economic system, study examples of countries that have implemented this system, and evaluate the advantages and disadvantages of the communism economic system.

Thus, the article I have created is expected to make a significant contribution to political economy literature and provide a better understanding of the history and development of economic systems in the world.

Understanding the Communism Economic System

What is Communism Economic System

The communism economic system is an economic system where the government plays the role of regulator of all sources of economic activity. Individuals are not allowed to have private wealth, thus one's fate can be determined by the government.

All business units, from small to large, are owned by the government with the aim of economic equality and togetherness. However, the objectives of this communist system have never reached an advanced stage, so many countries have abandoned this communism system.

We find the communism economic system in various countries such as in Russia and the People's Republic of China. In the communism economic system, the market's role in determining the direction of production is almost non-existent.

If we can call the capitalist economic system a market economy, then the communism economic system is a command economy, which is totalitarian with economic decisions made centrally. In the communism economic system, the state explains or sets out to individuals.

Characteristics of the Communism Economic System

The following are the characteristics of the communism economic system:

Everything related to the economic system must be done collectively. Private companies are not allowed because all agencies are owned by the government or the state.
All economic resources are state-owned
All decisions regarding prices, types, and quantities of goods are regulated by the state
The entire economic activity will be regulated and determined by the government. Both production, distribution, and consumption, to price determination.
All production tools will be controlled by the state.
The state regulates the course of communication and transportation
Production agencies and factories are state-owned
Free education for all children in public schools. Education in line with production industry needs
Types of jobs and job distribution are fully regulated by the government.
All private ownership rights are abolished to fulfill public ownership rights
All unemployment is held and guaranteed by the state

Countries Implementing the Communism Economic System

Some examples of countries that have implemented the communism economic system are:

1. People's Republic of China

China adopted the communist system after the victory of the Communist Revolution in 1949. However, since the early 1980s, China has undergone significant economic reforms and since then has opened up to a market economy and foreign investment, experiencing rapid economic growth.

2. Soviet Union

The Soviet Union was one of the first countries to implement the communist system after the Bolshevik Revolution in 1917. However, the Soviet Union collapsed in 1991 and was replaced by several new countries, including Russia, which adopted different economic systems.

3. Cuba

Cuba is a Central American country that has implemented the communist system since the 1959 revolution under the leadership of Fidel Castro. Despite facing economic challenges and changes after recent political changes, the communist economic system still exists there.

4. North Korea

North Korea adopted the communist system after World War II and the division of Korea. The Kim Jong-un regime strictly controls the economy and information in the country.

5. Vietnam

After victory in the Vietnam War and unification of the country, Vietnam implemented the communist economic system. However, since the mid-1980s, the country has also undergone gradual economic reforms and adopted a more open market-oriented economic model.

It should be noted that some of the countries mentioned above have undergone significant economic changes and adopted different economic models in the past few decades. For example, China and Vietnam have moved towards a mixed economy with more participation from the private sector and international trad

Advantages and Disadvantages of the Communist Economic System

1. Advantages of the Communist Economic System

The following are some of the advantages or benefits of the communist economic system:

Provision of basic necessities => The government guarantees the provision of basic necessities for all citizens, including clothing, food, housing, healthcare facilities, jobs, and other needs.
Job assurance for every individual => The state guarantees employment and oversight for those who are weak, physically and mentally disabled.
State-based planning => All jobs are based on thorough state planning, whether it's production or its use. Hence, the same weaknesses and deficiencies observed in the capitalist market don't occur.
State-controlled production => All forms of production are managed by the state, as are the profits, which are used for state interests.
Governmental regulation of inflation, unemployment, and other economic problems => The government gets directly involved in controlling inflation and distribution, which prevents frequent economic crises.

2. Disadvantages of the Communist Economic System

In addition to its advantages, the communist economic system also has its weaknesses, such as:

Difficulty in transactions such as bargaining => This is quite challenging for someone who has to sacrifice their personal rights just to obtain food twice a day.
Limited trade and price regulation by the government => As a result, the economy of the state is more dependent on the price level determined by the state rather than the market mechanism.
The Communist system fully rejects self-interest, inhibiting freedom of thought and action => This indirectly points to a dictatorial economic system where workers operate as state machines.
Overemphasis on economic achievement leads to neglecting moral education of individuals => As material satisfaction becomes a priority, moral values are ignored.

Conclusion

The communist economic system is a system that gives full control to the government over all aspects of economic activities. Although this system is aimed at achieving economic equality and solidarity, the expected results are often not achieved.

In many cases, communism fails to reach the advanced stage expected, leading many countries to abandon this system. However, it has certain advantages, such as providing basic needs and job assurance for every individual.

At the same time, communism also has several weaknesses, including difficulties in conducting transactions, restrictions on freedom, and neglect of moral education. Some countries that have implemented this system, like China and Vietnam, have undergone significant economic reforms and adopted different economic models.

Thus, while the communist economic system has principles that may seem attractive, its implementation often poses challenges and complications. Therefore, it's crucial for countries considering this system to carefully evaluate its advantages and disadvantages.

Frequently Asked Questions (FAQs)

1. What is a communist economic system?

A communist economic system is an economic system where the government regulates all sources of economic activities. In this system, individuals are not allowed to possess personal wealth.

2. How does a communist economic system operate?

In a communist economic system, all economic decisions, including production, distribution, consumption, and price determination, are regulated and set by the government. All means of production are controlled by the state.

3. Which countries apply a communist economic system?

Some examples of countries that have or currently implement a communist economic system include the People's Republic of China, the Soviet Union, Cuba, North Korea, and Vietnam.

4. What are the advantages of a communist economic system?

Some advantages of a communist economic system include the provision of basic needs, job assurance for every individual, and direct government control over inflation, unemployment, and other economic issues.

5. What are the disadvantages of a communist economic system?

Some disadvantages of a communist economic system include difficulties in conducting transactions, restrictions on freedom, and neglect of moral education.