1.0 Introduction 2.0 Objectives 3.0 Main Content
3.1 Capitalism 3.2 Communism 4.0 Conclusion 5.0 Summary
6.0 Tutor Marked Assignment 7.0 References/Further Reading 1.0 INTRODUCTION
This unit will explain the concept of capitalism and communism by indicating its relevance to the contemporary international political system.
2.0 OBJECTIVES
To explain the concept of capitalism To examine the concept of communism
To analyse their relevance to the present international political system 3.0 MAIN CONTENT
3.1 CAPITALISM
The concept of capitalism can be simply defined as the economic system that is determined by private ownership of the means of production and operations. The central characteristic of capitalism is the availability of free market whereby private individuals could own property and engage in competitive markets. The private entities are allowed to own the factors of production in a capitalist society. Capitalism entails two things. First, the private owners control the factors of production. Second, the income of the owners is derived from their ownership. This gives them the freedom and ability to operate their businesses effectively. It also provides them with the incentive of maximising profit.
In any corporation, the shareholders are the owners that control their shares. Though they determine the board of directors and hire chief executives of the company, the aim of maximising profit qualifies the shareholders as capitalists. Capitalism operates a free market economy and distribution of goods and services are done in accordance with the law. As stated in the law of demands, whenever demand increases for a particular good, the price rises as result of the fact that competitors realise they can make more profit. This results to an
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increase in production. However, the greater the supply, the lesser the price to a level where the best competitors remain, the idea of free market as entrenched in capitalism is to create a competitive market economy that allows private individuals to own means of production and distribution of goods and services.
However, a capitalist state allows freedom of participation in the economy and this economic principle has been spread across the globe. The Western world is known for its advocacy of capitalist market. Thus, the cold war between the United States and the old Soviet Union, was basically an ideological battle. The former was propagating the capitalism as the basis for socio-economic and political development while the latter emphasised on socialist economy that gives the state upper hand to determine and control the means of production and distribution. With the fall of the Soviet Union, capitalism captured the international political economy to the extent that Russia has also embraced privatisation as an economic blue print.
The free operations of the capital markets distinguished capitalism from the socialist economy. Nevertheless, the state is empowered to regulate the affairs of the private sector in any capitalist economy. Despite the determination of the economic structure by the forces of free market, the state plays a regulatory role towards checking the excesses of the private ownership of companies and industries. The state enacts different laws and acts to regulate the business activities in the country. This is necessary to avoid abuses that might surface due to the interest of the owners which invariably might jettison customers‟ rights.
SELF ASSESSMENT EXERCISE How would you define capitalism?
3.2 COMMUNISM
The idea of communism negates the principle of capitalism. Unlike the capitalist state that gives freedom for private ownership of economic sectors, communism is centred on state control of the economy. In Political Science and Social Sciences, communism as an ideology has the ultimate goal of establishing a communist society that believes in common ownership of means of production. With this, communist society tends to emphasize the communal control of property in order to avoid class struggle. Communism shares the Marxist ideology of socialism regarding economic activities. The thrust of communist school of thought is that any economic system built on capitalism would create two major social
classes and that conflict is bound to occur as a result of one trying to oppress the other. The two classes are working class which carries the majority and the capitalist class that is ina minority. Whereas, the working classes engage in work to survive, the capitalists derive profit from the employment of the working class. The ownership of means of production is being controlled by the minority capitalist class. The need to transform the society from the dictatorship of the few minority requires a communist society that believes in common ownership of property.
Politically, the communist state is governed by a single political party guided by Marxist- lennist philosophy. Though a communist state permits other non-political organizations to participate and function in the political processes, it does not believe in multi-party system.
However, in the western world, the term communism is categorised as a form of socialism.
The communist states in that regards are referred to as „socialist or workers‟ states‟. The central aim of communism is to replace the capitalist ideology of private ownership of property. It is centred on the need for public ownership that guarantees communal control of the major means of production such as mines, mills and factories (Terence, Richard &Daniel, 2017) and the society‟s natural resources. Though communism is a form of socialism, it is a much higher and advanced in its doctrine of nationalisation of private enterprises. Karl Marx in his critique of the Gotha Programme (1875), identified two phases of communism that would follow the overthrow of capitalism. The first phase would be the transitional stage whereby the working class would control the government and economy and yet still pay workers accordingly. The second phase would be full blown communist society without any form of class divisions in which production and distribution would be tailored towards the principle “from each according to his ability, to each according to his needs”.
Considering the linkage and relevance of both capitalism and communism to the contemporary international political system, it is glaring that the basis for ideological war between the two super powers was on capitalism and socialism. The United States championed the course of capitalism and its allies followed suit. On the other hand, Soviet Union was projecting socialist ideas and its allies belonged to that principle. But with the fall of Soviet Union after cold war, the U.S enjoyed monopoly of world power and turned the international system to a unipolar system. The unipolar system led to the spread of capitalism across the globe. The modern global environment embraces capitalist ideology to the extent that most economies of the world are being controlled by the capitalist states. Even the present Russia and China that could have been seen as advocates of socialism and
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communism have also embraced some privatization drive in their respective economies. This signals the widespread of capitalism within the international political economy.
SELF ASSESSMENT EXERCISE
How do you describe communism as an ideology?
4.0 CONCLUSION
The relevance of capitalism and communism to the understanding of the international system gives us an insight into the ideological principles that govern the new world order. The spread of capitalism across the globe indicates its wider acceptability as an ideology in the economic relations among states.
5.0 SUMMARY
In this unit, we have been able to explain the concept of capitalism and communism and its relevance to the international political system.
6.0 TUTOR MARKED ASSIGNMENT
Explain with examples the concept of communism?
What is the relevance of communism in the international system?
Distinguish between capitalism and communism in international politics?
How can you distinguish between capitalism and communism as dominant ideologies of the cold war era?
7.0 REFERENCES
Karl, Marx (1891).Critique of the Gotha Program.Wild Side Press
Terence Ball, Richard Dagger and Daniel, O‟Neill (2017). Political Ideologies and DemocraticIdeas Routledge: New York.