Our lives form a miniature portion of an extremely complex society. The evolution of human society has never been more rapid. Technology is booming at a swift pace, changing our lives for better or worse. This progression has stimulated two opposite political, economic and social systems. On the "left" of politics is communism (or Marxism) and on the "right" is capitalism.
Capitalism is a political system in which factories, companies, land, etc. are owned privately in order to create profit for the owners. Prices of goods and services fluctuate depending on the desire of the consumer and the availability of the goods (the law of supply and demand). In a capitalist society their will be significant differences in wealth and power between those who have capital (machines, factories, ships, land, etc.) and those who do not.
No one can say when capitalism first began. Clearly the development of capitalism was not revolutionary like that of communism. Instead it emerged gradually without anyone making a plan of what it should become. However, aspects of modern capitalism such as the stock exchange, banks and great disparity in wealth came about during the industrial revolution (McCracken, 2005).
In 1776 Adam Smith, a Scottish university professor, produced a book which described the workings of a capitalist society. He believed that a country's wealth depends on all people pursuing their own interests. If a person promotes his own interest he or she is unintentionally promoting his country's interest. Smith thought that governments should promote free trade and not interfere by protecting certain industries from competition. The only duty of governments, Smith wrote, was to provide services that couldn't be profitable like the building of roads, schools and churches (Cannan, 1976).
The Communist Manifesto proclaimed the inevitable spread of capitalism across the globe (Rayment, 2009). This process was halted and even reversed during much of the 20th century by the isolation of the Soviet Union, Eastern Europe and China from the world economy and the very slow pace of economic development in poor countries such as India. However, the extraordinary transformation of China's and India's economies promises to bring Marx and Engels' prediction to completion. What might be the implications for workers in rich countries? At first glance, the eruption of China into the world economy seems to be just the latest example of Asian countries catching up with the leading industrial powers. China's export growth has been spectacular, but so was that of Japan and Korea in earlier decades (Champion, 2009).
Marxism is an economic and social system based upon the political and economic theories of Karl Marx. It is a way of living, so it is difficult to entail everything that it means and relates to. According to the Encarta Reference Library, Marxism is summed up and defined as “ a theory in which class struggle is a central element in the analysis of social change in Western societies.” Marxism is the direct opposite of capitalism which is defined by Encarta as “an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit.” Marxism is the structure of socialism of which the leading feature is public ownership of the means of production, distribution, and exchange (Encarta, 2009). Marxism was formulated in the 19th century. Marx and his associate Frederick Engels observed the socio-economic changes that were transpiring in Britain. England was the dominant world power and had the largest industrialized economy during the 1800's. The development of the factory and the institution of the assembly line created a large demand for workers. This demand was satiated by migrating peasant from the rural areas in England and Ireland to developing urban centers. As these urban centers or cities evolved using industry as the economic backbone for the population, a large number of factory workers were accumulated to operate the machinery in horrid conditions. These workers, which would be termed as the peasantry under a feudal system, were now the working class or proletariat. They entered cities with hopes of bettering their lives and survival. Though revolution never took place in England during this period, it allowed Marx to study industrialization, urbanization and imperialism (Political Dictionary, 2009).
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- Kayla Murdock (Author), 2009, Capitalism versus Marxism, Munich, GRIN Verlag, https://www.grin.com/document/150605