Capitalism is Superior to Communism

My CaseSupply and DemandOne of the most important factors of economics is supply and demand. Businesses seek to find equilibrium between supply and demand. When supply increases, prices fall because it is not as valuable with more products. With more demand prices rise because prodcuts aqre worth more. Since businesses want to maximize profit, they will always seek equilibrium. "The law of supply and demand defines the effect that the availability of a particular product and the desire (or demand) for that product has on price." [2] Private Property RightsIf you look at free market nations, they have are the primary nations of advancing property rights. Private propety means things are owned by individuals, not the state. This helps with supply and demand. Shortages are usually more seen in socialist and communist countries where the state controls industries. Private businesses are simply more efficient with economics. "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 â€" 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." [3]Competition, Innovation, Free TradePrivate businesses compete with each other to get the business of consumers. They want the most profit, so they need to appeal to consumers through lower prices and other incentives. At the same time, they need to make sure to please workers with adequate pay or else they may lose them to other business. Because of this, competition works for everyone. "The notion of “avoiding” competition is futile at best, because as we all know, in a free-market economy, competition is good for consumers – keeping prices affordable and increasing the level of customer service. That being said, innovation is key, however there is no reason to reinvent the wheel. Often times it is in the best interest of business to “borrow” successful ideas, launching innovation from there." [4]Innovation is indeed key to the success of businesses. Innovation, after all, has lead to advancements in technology in our world. It was never communism. "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." [5]This especially helps small businesses with new ideas vs. big businesses who eventually reach their peak and have to stay where they are with less innovation. Such companies have become highly rigid and specialized, and in static terms, greatly productve. Many of them are now experiencing a new lease on life in the international realm. But from the point of view of overall economic growth and technological innovation, these leviathans are of little importance to the economy. [6]Free trade is also crucial to an economy. With protectionism, there is a regulation on international trade that only benefits businesses in the country establishing tariffs. However, this hurts consumers who will buy less if prices are simply too high. We have seen tariffs before and they have failed. The infamous Tariff of Abominations nearly caused a civil war, the McKinely Tariff led to the fall of Benjamin Harrison's presidency, and the Smoot-Hawley Tariff made the Great Depression worse. "According to the Cato Institute’s 2004 report on Economic Freedom of the World, which measures economic freedom in 123 countries, the per capita gross domestic product in the quintile of countries with the most restricted trading was only $1,883 in 2002. That year’s per capita GDP in the quintile of countries with the freest trading regimes was $23,938." [7]Free trade is far superior to restriction in international trade.HistoryWhat about evidence that free markets really do work? We have plenty of evidence that proves nations that adopt free markets last longer than those who do not. Also, free markets have greatly improved the quality of life and economic growth of many nations: Here is growth: Here are some historical examples.I. Ancient RomeRome had one of the greatest empires of all time and with it had one of the most free markets. This allowed for huge growth in the economy. They respected private property and the great majority saw a good quality of life. As with all nations, there was some small regulation, but nothing too huge. It was overall a free market nation. "No Roman institution was more important or celebrated, than its legal system, particularly its recognition of property rights. The rule of law, rather than the rule of men, no doubt encouraged Solovian investment (for example, purchasing capital equipment). The Romans also had vibrant markets for urban trade, markets unique in Europe. Heavy trading led to the development of a peculiar institution known as the collegium, which gave legal status to a private group, the direct ancestor in law of the modern corporation, trade union, and even nonprofit organization." [8]Rome lasted for a long time with this free market system, but what happened to it as it fall? The answer is increased economic intervention by the Roman government eventually leading to a command economy by Emperor Diocletian at the end which led to the empire's fall. II. Nazi GermanyNazi Germany was a superpower, yes, and it had huge economic growth under the national socialist command economy system it had set up. Is this not an example of a triumph in the command economy? No it is not. The economic boom was brief and was likely not to last."It can never be known if Nazi Germany or fascist Italy could have thrived in pace, though it seems unlikely. Rather, the growth of those economic in the brief run-up to 1939 fit what is now a familiar model - the statis takeover. When a government transitions to a more interventionist role, transforming a free economy to a command economy, it thrives onn a one-time extraction of wealth and from formerly independent, private companies. But like a sudden wealth tax, aggrandizement by a dicator diinishes the incentives of the private sector to create wealth going forward." [8]Nazi Germany was destined to fall.III. United KingdomFrom 1945 to 1979, the UK built up a welfare state that slowly led a decline in the British economy. This was because both Labour and Conservative governments decided to take over private industries and redistribute wealth. By the late 1970s the economy was in trouble."The transport of goods pactically dried up. Employees were laid off as businesses were crippled by the lack of deliveries, enforced by intimidatory and often violent picketing of docks and factories. Piles of rubbish lay uncollected in the streets. Roads were not gritted (in very cold weather), schools were closed and hospitals admitted only emergency cases, while shop stewards took it on themselves to determine what was an emergency. Most famously, in Liverpool, the dead went unburied. On 22 January 1.5 million workers joined in a national Day, the biggest stoppage since the General Strike in 1926." [9]Then in 1979, a new Conservative Party led by Margaret Thatcher decided to change the British economy after winning the general election. They privatized state industries and reduced the welfare state, leading to an advanced free market economy. "Recall Sir Nicholas Henderson, the British ambassador to Paris, who sent a telegram to the foreign office in 1979 remarking 'today we are not only no longer a word power, but we are not in the first rank even as a European one.' He included his missive table: It showed that Britain's per capita income was 46 percent below West Germany's and 41 percent below France's.As of today, British per capita income is 6 percent higher than united Germany's and 8 percent higher than France's. Britain is Europe's fastest growing economy now and fifth largest." [10]Sources1. https://www.khanacademy.org...2. http://www.investopedia.com...3. Galles, Gary. "Not Just Survival; Not Just of the Fittest." Mises.org. Ludwig Von Mises Institute, 4 Apr. 2008. Web. 30 July 2014.4. Johnson, Melody. "The Value of Competition." Temperchamber.org. Tempe Chamber of Commerce, 9 Apr. 2013. Web. 30 July 2014.5. Younkins, Edward Wayne. "The Triumph of Technology over Government Planning." Mises.org. Ludwig Von Mises Institute, 11 May 2011. Web. 30 July 2014.6. Gilder, George F. Wealth and Poverty: A New Edition for the Twenty-first Century. Washington, D.C.: Regnery Pub., 2012. Print.7. Tupy, Marian L. "Free Trade Benefits All." Cato.org. Cato Insitute, 3 Jan. 2006. Web. 30 July 2014.8. Hubbard, R. Glenn., and Tim Kane. Balance: The Economics of Great Powers from Ancient Rome to Modern America. New York: Simon & Schuster, 2013. Print.9. Campbell, John. The Iron Lady: Margaret Thatcher, from Grocer's Daughter to Prime Minister. New York: Penguin, 2011. Print.10. Berlinski, Claire. "There Is No Alternative": Why Margaret Thatcher Matters. New York: Basic, 2008. Print.