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Capitalism, Socialism, and
Communism
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Capitalism

An economic system in which all or most of the means of
production are privately owned

Investment of capital and the production, distribution,
and prices of commodities (goods and services) are
determined mainly in a free market rather than by the
state

Means of production are (generally) operated for profit.
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Socialism

State ownership of common property, or state ownership of
the means of production.
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In a purely socialist state, the state owns and operates the
means of production.
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Nearly ALL modern capitalist countries combine socialism
and capitalism. Rutgers is a socialist institution: owned and
operated by New Jersey. Highways, state parks, harbors, etc.
are all socialist – owned and operated by the state – though
they facilitate capitalism.
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Socialism

As capitalism emerged in opposition to feudalism, socialism
developed in reaction to capitalism

Combination of passionate concern for social justice and
proposals for economic reform (though the type is not agreed
upon by all socialists)
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Key themes
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Dignity of work
Value of workers’ cooperation
First half of the 19th century
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Some ambivalent toward industrialism
Others seek to harness industrialism to welfare of impoverished
masses
Disagree central planning
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Diversity in Socialism

Saint-Simon (1790-1825) : technocratically planned and
controlled industrial society

Robert Owen (1771-1858): self-governing workers’ cooperatives

Francois Marie Charles Fourier (1772-1837): local
communities (phalansteres) based on diverse and freely
chosen forms of work

English Fabian Society (founded 1883)
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Marx and Engel’s Effect on
Socialism

Critique of capitalism by Marx and Engels provided
resources to socialism

Marxism provided emerging socialist parties of Western
Europe with a general philosophy and a final goal in the
shape of the common ownership of all means of production
and distribution

The goal could incorporate various socialist beliefs in
workers’ co-operation and self-management without
specifying clearly how a socialist society would actually
operate.
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Socialism in Action

The First Internationale or International
Workingman’s Association (1864-76)
 Destroyed by conflicts between
Marxists and Anarchists (especially
prevalent in repressive quasi-feudal
societies such as Russia and Spain)
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The Second Internationale (1889-1914)

Both tried to incorporate Western labor
movements into an international
organization based upon Marxist
philosophy and the common interests
of workers around the world.
 Success in France and Germany
 Up until 1914, emerging ideas of
democratic socialism could be
reconciled with and partly based on
Marxist ideology
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World War I and Russian
Revolution

Transformed socialism

Split the communist and democratic forms of socialism
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Bolshevik Revolution  product of a disciplined elite not a
mass proletarian movement occurring in an economically
backward/quasi feudal country
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Doubtful relation to Marx’s theories or speculations

Russian revolution showed that Marx had some flaws

Marx viewed government as coercion by a dominant economic
class and not as a separate or independent source or power

Stalin showed how overwhelmingly tyrannical a complete union
of political and economic power could be
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Communism

A community ownership of property with the end being
COMPLETE social equality via economic equality.

Communism is an idealized utopian economic and social
state that the country as a whole is working towards.

The People’s Republic of China aspired to this form of
communism in the time of Mao.

Mao justified authoritarianism and repression if they
facilitated the establishment of communism.
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Marx and the Labor Theory of
Value

Marx believes that each individual owns his or her own labor
(the labor theory of value)

No man can – or should – own another man’s body or his
labor

Profit belongs to the laborer not the capitalist who controls
the means of production (e.g. factory owner)

Profit that is not shared with the laborer is inherently
exploitive.

Communism claims to transfer the ownership of the means of
production to the state so that the profits of labor can be
shared with the laborer