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Communism vs CapitalismWe want to explain why we keep hammering on communism and socialism. It's simple. They are alive and well. Of course, we don't have hard-core communism as we had in the USSR, but what we now have is hard-core socialism… trending towards soft-communism. If you don't believe us, just look at our Socialism Indices.

It is for this very reason that we strive to point out the differences between capitalism and communism. These differences are critical, not because they oppose each other, but because the first is correct while the second is in error. Yes, it is that simple.

Politicians are doing an excellent job of selling socialism/soft-communism as "capitalism-light". It is a classic false-flag infiltration operation. Rebrand and re-sell. This is Basic Marketing and nothing more. Who cares, right?

Unless… your life and wellbeing are at stake. Which they are. Then, it becomes personal. Very personal.


When it comes down to oversimplify, we are probably the champions (or at least in the top ten). But oversimplification has its merits. It allows you to focus on the one key or core element from where everything else originates. Oversimplification has its uses as in this article. Let's get to it.


At its most basic the communist doctrine believes that humans are "good". By "good" we mean that they are "good" natured. They are selfless beings and it is for this reason (and not any other) that communism can be built. Think about it. If people would be selfish bastards then it would be impossible to take and give as communism says:

From each according to his ability, to each according to his need.

It would be impossible because people would not give voluntarily according to their ability and they will always overstate their needs to get more. Communism is theoretically impossible if humans are "bad". Thus, humans must be "good" natured.

But there is a problem. Reality. Obviously humans are not "good". So how does communism deal with this -minor- ejem… inconvenience? Simple. They say that although human nature is good, we are not there yet. But not to worry because through communism -eventually- humans will evolve into this "new" man; this selfless man and we will -eventually- achieve paradise on earth.

In the meantime, we need an iron-fist communist dictatorship to keep current -less evolved- humans at bay. Dictatorship is necessary to prevent humans from falling into their most basic deviation from "goodness"; this is, selfishness. Thus, in the communist view a communist dictatorship is not only a good idea but something absolutely necessary if we will ever be able to achieve "paradise on earth". The purpose of said dictatorship is to determine the necessary rules to keep these "less evolved" tendencies of humans under control.

Thus, communism at its most basic is the belief that although humans are basically "good" they are not yet "good" enough (i.e. they are transitorily "bad") thus this inherent trait must be suppressed for the "good" of humanity until they evolve into their basic nature.


Capitalism, on the other hand, believes that people are "bad". By "bad" we mean selfish to the core. Capitalism does not explore the origin of this human property, it just acknowledges it is there. Capitalism says that being selfish is being human and if you don't believe such a thing, just take a hard look at what people are doing. Even communism acknowledges that people are "bad" (although they believe it is a transitory condition only). Fair enough, having recognized the most basic human trait, capitalism then sets to define the set of rules under which this selfishness won't destroy humanity. It is very obvious that if we all behave in a purely selfish manner, we would take what we want, when we want using whatever means we may have at our disposal. This translates into chaos and anarchy and death and destruction. The usual fun stuff.

But once embarked in this task of discovery, capitalism discovers something else. It discovers that it does not have to create any rules because nature figured it out all by itself long time ago. It so happens that these selfish tendencies can be harness for the benefit of all humanity through free markets.

Thus, capitalism at its most basic is the belief that although humans are "bad" through free markets this inherent trait can be used for "good".



Communism begins as an unfounded belief. If you look at humanity you will notice that it is inherently selfish. There is no scientific evidence (of any kind) to suggest that humans are inherently "good" (or selfless). Thus, communism begins with an unfounded leap of faith. Is it then a surprise when we realize that communism does not work in practice? Of course not. If something is founded at its most basic on an error, it has nowhere to go but into that error. All premises and plans will be based on such error and thus the outcome will be in error. Communism attempts to correct what it believes to be a deviation from the basic human nature by creating prohibitions, this is, communism opposes human traits. But if traits are prohibited, then how can a system make people work for the benefit of all? Through oppression. It is simple; if you remove all incentives whatever is left must be used to achieve the goal. It is for this reason that a dictatorship is necessary, to force people to work for the benefit of all. But working under such conditions (i.e. going against a human trait) is not something people look forward to and the consequences of this is low productivity.

Communism is a classic example of an unfounded idealism.


Capitalism, on the other hand, begins with an observation; people are selfish. This observation is backed by monstrous amounts of scientific information. People are indeed selfish. Surprised yet? Of course not. Thus, capitalism beings with a truth, a reality. It acknowledges this reality and tries to fix it. But the way it tries to do so is not by opposing this trait but harnessing it. Capitalism attempts to use all the natural traits humans have in all their power for the benefit of all. As such, it is obvious that there will have to be some sort of accommodation, a deal, a contract. If we want (need) selfish people to give us stuff, we need to give them stuff in order to satisfy their selfishness. Quid pro quo. Give to receive. But the nature of this "giving" cannot be fixed because each person is different. Thus capitalism says that for as long as you work for the benefit of other people (through the market), what you get in return you can keep. It is entirely up to your selfish nature to get as much as you can possibly get. And this is the key incentive of capitalism. It is the center piece of the deal that keeps on giving. It is the engine that unleashes selfishness for the benefit of all. The genius of this method is that it does not attempt to limit selfishness thus allowing people to be as much selfish as they can possibly be. And the consequences of this is high productivity.

Capitalism is a founded pragmatism or realism.


Many people object to this type of analysis because they say that although it may be true that people are selfish, this selfishness can be "managed" through laws and regulations which guide us towards an ideal scenario.

This is, of course, nonsense for several reasons.

The first reason is that although laws and regulations may exist, selfishness still exists and it controls our lives. Laws and regulations may attempt to make selfishness less damaging but they do not provide an answer as to how do we get selfishness to work for the benefit of all. Only markets can do that.

The second reason is that it is not possible for laws and regulations not to interfere with markets because markets operate on selfishness. Thus, laws and regulations must alter markets but in so doing they are destroying the engine that creates overall wellbeing. We are back to communism-light.

The third reason is that laws and regulations are arbitrary. They are the one-size-fits-all non-solution. People are individuals with individual points of view and needs. A universal law satisfies nobody by definition. Thus laws and regulations create a system where everybody is dissatisfied and uneasy with the restrictions they are forced to follow. Again, back to communism-light.

The fourth reason is that laws and regulations are created by selected people based on their ideas of "good" and "evil" and these ideas do not correspond with the individual ideas of people. In effect, laws and regulations are handed down to us by a selected group of dictators who, even if they would want to, cannot represent our wishes (because a democratic system is the tyranny of the majority). We are, again, back to communism-light.

The point is that any attempt to "manage" selfishness puts us right on the path into communism-light. Of course, this could not be otherwise because the very concept of "managing" implies "bad" which is at the core of the communist doctrine when it attempts to restrain humans from this "transitional bad" inclination. At its most basic, the concept of "laws and regulations" as understood by modern democracies is simply performing the same operations that communists would do but without the theoretical support of the communist doctrine.

Basically, garbage in, garbage out.

It is simply illogical and insane to use failed methods and expect success. Yet, this is exactly what the concept of "managing" selfishness implies. The results are clear and obvious: misery.

This outcome is predictable and it is so because, again, communism is a groundless idealism while capitalism is grounded realism. Not much mystery here.


But the world is not black and white as we painted it above. No, it is not. It is gray. This is so because even within socialism there are multiple points of view. As such, some places will be less socialist than others. Again, take a look at our Socialism Indices. This is not important. What is important is the trend and the trend is clear. We are moving towards communism-light as governments systematically take over more and more of our lives and our market activities. Laws and regulations are increasing, not decreasing. We are becoming less free to pursue our selfishness in the markets as we see fit. Communist core beliefs are winning… until the final collapse. We know that communism does not work and the only difference between socialism, hard socialism and communism light is time. When we get there, the system will implode. In slow motion. And then we will evolve. This much is inevitable. And so, no. Reality is not absolute and we are not saying it is.


Communism fails because it is based on the erroneous and groundless belief that humans are "good" at their core. Capitalism works because it is based on the grounded observation that people are "bad" (i.e. selfish) and that nature has devised a method to put selfishness to work for the benefit of all. It is not an issue of pragmatism, it is an issue of scientific truth. Going against such truths is foolish. Creating entire political and economic systems based on rejecting such truths is doomed. In the end and at its most basic this is the reason why communism fails and capitalism works. It is not a mystery, what is a mystery is how is it possible that so many people still believe in communist principles.

But you are free to dissent. You are free to disregard. You are free to fully embrace socialism… sorry… "capitalism" (as defined by politicians) because you believe it works. Fair enough. Just one thing, when everything collapses don't tell us to shut-up. We won't…for educational purposes…you know…

Note: please see the Glossary if you are unfamiliar with certain words.

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