2006-09-02 09:54:27 · 5 answers · asked by Missy 1 in Business & Finance ➔ Other - Business & Finance
Not very well, if the past 100 years have been any guide.
Communism and socialism allocate resources based on the judgment of a handful of people at the very top. Capitalism allocates resources through free market mechanisms. Free market works better.
2006-09-02 12:06:49 · answer #1 · answered by Michael K 6 · 0⤊ 1⤋
They can't.
Communism and Socialism lack the the ability to calculate Profits & Losses. Because of this, Communism and Socialism are perpetually doomed.
I'll explain:
We live in a world with scarce resources. In other words, wood is scarce, steel is scarce, human labor is scarce; our resources on this planet are not infinite.
In this situation, the main economic question becomes: "Where should the Earth's scarce resources be applied?"
Profits and Losses tell us WHERE resources should be applied. When you see high profits, you see the marketplace providing a signal that this is an area of high demand.
When you see large losses, it is also a signal. But this signal says that this is an area of low demand. Resources should be removed and applied to where demand is higher.
In order to have Profits and Losses, you MUST have Prices.
In order to have Prices, you MUST have Private Property.
Capitalism is a system that contains Private Property, Prices, and Profits and Losses. Resources can easilty shift to where they are demanded most.
Under Socialism, there is NO Private Property, hence NO Prices, hence NO Profits and Losses.
Under Socialism, resources are allocated by political whim. And without the guides of profits and losses, the politicians have no clue as to where to apply the scarce resources.
Massive poverty must (and always has been) the result.
2006-09-04 00:45:34 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Communist and Socialism won't have money or currency because on a money driven society, all the money or the majority or it will fall in a few hands one way or another fall, just as in the game of Monopoly. A Socialist society will focus it's strenght on fulfilling the needs of it's people, production will be driven by society demand not by profits.
2006-09-02 22:20:55 · answer #3 · answered by tetraedronico 2 · 0⤊ 0⤋
easy: communism and socialism dont have economic goals.
They are systems that are driven by the good of the society, not the bank balance
2006-09-02 17:01:19 · answer #4 · answered by a tao 4 · 1⤊ 0⤋
They don't.
2006-09-02 17:28:14 · answer #5 · answered by Piggiepants 7 · 0⤊ 1⤋