On Balance, Capitalism Is Superior to Communism

I. Supply and DemandIf there's one thing people know about economics, it's supply and demand - as the supply increases, the price falls because (assuming the demand stays the same) the overall worth of the product is less; as the demand increases, the price rises because (assuming the supply stays the same) the overall worth of the product is more. Because businesses seek to maximize profit, they seek an equilibrium point of supply and demand. What all this means is that surpluses and shortages, which are very common in other types of economies, are not generally found in Capitalistic economies because of the laws of supply and demand. "At this point, the allocation of goods is at its most efficient because the amount of goods being supplied is exactly the same as the amount of goods being demanded. Thus, everyone (individuals, firms, or countries) is satisfied with the current economic condition. "[1]II. Competition and InnovationCapitalism, because of its inherently competitive nature, creates a sense of competition (i. e. for the most profit). What this means is that companies will produce the best products (to maximize sales) for the most efficiency (to minimize costs from inefficiency). "Competition in the marketplace is good for consumers—and good for business, too. It benefits consumers by keeping prices low and the quality and choice of products and services high. It benefits businesses by promoting innovation—improvements to make products different—and often, to make them better in ways that consumers want. "[2]Competition therefore leads to innovation, and it is innovation that has been the driving force behind the industrial revolution and subsequent rapid increase in technology. In other words, capitalism breeds innovation, which improves the lives of everyone. "Capitalism has made advances possible, not solely in providing life's necessities, but in science, technology, and knowledge of all types upon which human society depends. Freedom attracts innovators and explorers and gives life to their ideas. Freedom for people to act in their own self-interest is the mainspring for a diversity of ideas, innovations, and experiments that lead to the discovery of new products, services, and other means of production. "[3]In general, capitalism encourages efficient enterprise, which inevitably leads to a more wealthy society capable of expanding its economy, and ergo its wealth, even further. III. Private PropertyOne of the many advances in human civilization has been the advent of private property. Private property allows for rights to be endowed upon people, where people can keep what they earn. In the words of Ludwig von Mises, ". .. [private property is the basis for] joint action and cooperation in which each participant sees the other partner's success as a means for the attainment of his own. " This goes back to the laws of supply and demand mentioned earlier - whereas in other economic systems, shortages are common, capitalism's need for private propery allows for one to satisfy needs and wants because of certain rights. [4]"In enriching most those who are most productive, capitalism allows the survival of billions of people who would not otherwise have survived. In fact, capitalism gives everyone — particularly the weakest, whom it is accused of harming — the best chance not just to survive but to thrive. One of many ways this is revealed is the vast increases in leisure that markets have made possible, while real incomes dramatically increased at the same time. "[4]IV. Empirical EvidenceThe amount of empirical evidence comparing capitalistic countries to non-capitalistic countries is astounding. Time and time again, there is a markedly clear divide between the capitalistic, wealthier countries and the socialistic/communistic, poorer countries. There is probably no better regional divide than North Korea and South Korea: "Four decades ago, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of world economies, and currently is among the world's twenty largest economies. "[5]Here is a graph comparing economic freedom and per capita income: [6]There is a clear trend line that develops as economic freedom increases - per capita income increases. Overall, economic freedom correlates with general economic development, as seen in this chart comparing economic freedom quartiles to overall economic growth: [7]It is easy to see the correlation here. Overall, capitalism improves the lives of everybody by eliminating surpluses and shortages, encouraging innovation, establishing the necessity for private property, and in general, contributing to a greater increase in total capital and per capita income in a nation's economy. Communism does not have the necessary components for this present, and therefore do not experience the successes of capitalism I just mentioned. Sources[1]: . http://www.investopedia.com...[2]: . http://www.ftc.gov...[3]: . http://mises.org...[4]: . http://mises.org...[5]: . https://www.cia.gov...[6]: . http://markhumphrys.com...[7]: . http://www.youngresearch.com...