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What Is Communism?

  • German philosopher Karl Marx developed the theory of communism. It is an economic system where the group owns the factors of production. In countries, the government represents the group.
  • Although the government doesn't legally own the labor force, the central planners tell the people where they should work.
  • The motto of communism is "From each according to his ability, to each according to his need."
  • "To each according to his need" meant the community would take care of those who couldn't work; it would distribute goods and services to everyone as they required them.
  • This meant that people would work at what they loved and did well, happily contribute these skills for the good of all, and the economy would prosper because they would work harder than in capitalism.
  • In a true communist economy, the community makes decisions; in most communist countries, the government makes those decisions on their behalf. This system is called a command economy.
  • The leaders create a plan that outlines their choices, and it's executed with laws, regulations, and directives.
  • The state owns businesses on behalf of the workers, which, in effect, means the government owns a monopoly. Under this system, there is a centrally planned economy.

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