A Brief Summary of: Communism, Socialism, Capitalism

This post will be short and sweet. It's come to my attention that when people speak of these three economic theories that there is a lot of confusion about what each one means. People constantly confuse these ideas with forms of government. Most capitalists don't really understand what capitalism means, and even more so confuse Socialism with Communism. Often those who confuse Socialism with Communism ask to be explained the difference, and most explanations don't do a good job of separating the two spheres of thought. Even when going straight to the dictionary source to define these ideas, you might still come away confused about what the differences are. So here's a simple breakdown that should be easy to understand.

Communism:

The state or government owns a monopoly in every trade and industry in the market. They don't have competitors in agriculture, weapons manufacturing, military, police, education, etc. They own a monopoly in every market. Period. Every employee is a government employee.

Definition:
"a way of organizing a society in which the government owns the things that are used to make and transport products (such as land, oil, factories, ships, etc.) and there is no privately owned property"

Socialism:

The state or government owns a monopoly in certain markets. Depending on the type of government (republic, dictatorship, etc) the ruler(s) decide which markets the state owns a monopoly in, and which markets they will not. The constitution laid out details about what government should own a monopoly in, and left other markets up for our republic to decide. Article 1 Section 8 of the constitution specifies this:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States"

So any time someone says that the government shouldn't get involved in things like healthcare, because it's unconstitutional, understand that their argument is not in defense of the Constitution, but instead in defense of Capitalism. They want the market to be privately owned. 'General Welfare' is one of the governments constitutionally written, agreed to, and understood duties from which one could easily argue that Universal Healthcare could be considered a part of.

Socialism is not only the government owning a monopoly in a market, but also regulating the markets that they don't have a monopoly in. (regulations like telling a company they can't put lead in our water, or that a car company has to build cars that have a certain level of fuel efficiency). Capitalists will argue that these are unconstitutional as well. Again, they're not arguing for the constitution, they're arguing for their economic theory of Capitalism.

Definition:
"a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole."

Capitalism:

Capitalism is when the government does not own a monopoly in any market. Quite literally this theory is the 'anarchy' of economic theories. If your business wants to sell water laced with cocaine, no one should be able to tell you that you can't.

Definition:
"an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

--

Often these economic theories get mistaken with forms of government rule. Capitalism is mistaken for democracy, or a republic. Communism gets mistaken for dictatorships and authoritarian rule. And Socialism gets confused with anything and everything because few understand what it actually is.

Now these aren't black and white definitions. These are terms that exist on an ever expanding scale (expanding because markets expand, new technologies develop new markets, etc) On this scale you'll find Communism on the left, Socialism at the center, and Capitalism on the right. Understand that although this scale is expanding, pure Capitalism will always be to the far most right, and pure Communism will always be to the far most left. There really is no such thing as pure Socialism, because it can't be given a definitive position in what markets government should own. It's always up to the form of government to decide which markets the government will own and which they won't.

So if you're a Capitalist, understand that the moment you agree that government should disallow a business to lace water with cocaine, you haven't necessarily become a Socialist. You've simply taken a step towards the Socialist ideology and a step away from pure Capitalism.

Every regulation you believe a market should have, is a step towards Socialism. Every market you believe government should have a business in (public option), is a step towards Socialism. Every market you believe government should own a monopoly in, is a step towards Communism.

I hope this helps you to not only understand these terms, but how to differentiate them from forms of government.

Cheers.