Compare and Contrast Essay on Economic Systems: Capitalism, Communism and Socialism

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Socialism is a leftist political ideology that developed out of the attitudes reflecting the exploitation of workers in capitalist systems. The socialist ideology critiques the idea of capitalism as being held on the basis of competition, and selfishness. It argues rather that humans are societal, and that economic rivalry weakens and threatens “the cooperative and community-oriented nature of humanity” (Mintz et. al, 62). The political ideology of socialism emerged out of various revolutionary movements, advocating for a better distribution of wealth, income, and power, for a more equal society, where a sense of community and solidarity could be forged. In this essay, I will be looking at the origins of socialism, tracing its ideology back to its early beginnings, while looking at some important socialist works that have influenced modern socialist thinkers. I will also be looking at the historical conditions under which socialism emerged, and finally, which countries it prevailed the most in.

Before 1800, the development of socialism was limited exclusively to England and France. Socialism consisted of a few isolated thinkers, as well as scattered revolutionary movements, such as the Diggers; an extreme left-wing movement of the English Civil War (1642-1651) led by Winstanley, who pressed the laboring class to find uncultivated land and work communally on this land. During the French Revolution (1789-1799), the Equals, a movement led by Babeuf advocated for equality and the demand for common ownership. However, one of the basic fundamental works on which socialism is based on can be traced back to the 16th century with Thomas More’s Utopia published in 1516 (69). Discussed in his work the idea of common ownership for a whole society. The classic English writer “condemned the evils of pride, envy, and greed” (63) on which capitalism is based on. More was the first to argue that private property leads to a greedy society that seeks only to serve its own interests. More imagined an ideal world where everyone could pick out of the common good, and where money would no longer exist. Many thinkers of the 19th century were influenced by More’s idea of a utopian world. More influenced socialist utopian thinkers of the early 1800s, such as St. Simon, Fourier, and Owen. All three of these Enlightenment thinkers were “keen observers of their environment”, fearful of the power of the state, and wished to solve the problems of society through communal societies. In 1830 England, socialism acquired the character of a working-class political movement when middle-class workers were given the right to vote. Indeed, Chartism was passed in 1832, which was historically the first large-scale independent political action taken on by a socialist group.

After the 1800s, building off on the ideas of utopian societies came a more modern socialist school of thought. The socialist ideology shifted towards revolutionary movements that gradually rose to reflect the conditions of life of the working class. Indeed, rather than envisioning an ideal life through the development of visionary schemes, as Utopia suggested, more modern socialist thinkers desired now to take concrete political actions against the growing inequalities between the rich and the poor. Karl Marx (1818-1883) and Frederick Engels (1820-1895) were the founding fathers of this new wave of thinking that gave rise to the communist revolutions of the 19th century. Marx and Engel’s argued that socialism must be based on a theory of history, where the dynamics of a society can be understood in the way it produces its material goods (historical materialism), and a theory of the existing social order. Moreover, Marx and Engel argued that slave-owning, feudal, and capitalist systems, led to “the exploitation of a subordinate class by a smaller, dominant class” (63-64). In other words, Marx and Engels were convinced that incomes attainted by the bourgeoisie (rich) were based on the exploitation of the proletariat (working class). When Europeans started to gain the right to vote in the late 19th century, Marx and Engels saw a possibility that the working class could achieve to take control of the state and establish a socialist system through elections.

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In 1848, Marx and Engel wrote the Communist Manifesto, which today may be considered the most influential socialist piece of work to have ever been written. This political pamphlet basically outlined Marx’s and Engel’s theories on capitalism, the working-class struggle of communal production of labor, and the struggle between the rich and the poor. Marx and Engel stressed that power relations and capitalist economic systems give rise to high inequality, and therefore don’t have their place in society. Indeed, they rather placed importance on the idea that humans should be seen as products of human nature capable of social and creative qualities. Moreover, they argued that eradicating the capitalist system to shift towards an economy devoted to human needs would increase production, and therefore, material abundance would prevail, and everyone would meet their basic needs. Marx and Engel stressed in their Manifesto that capitalism would never fully thrive, due to the fact that the lion’s share of a society’s capital was detained only by a limited group of people, and therefore, capitalism could not meet the maximum of human productivity, which would eventually lead to crises of unemployment and depression. According to Marx and Engel, these consequences would lead to the intensification of conflicts between the bourgeoisie and the proletariats, to the point where the vast working class, which expanded at a rapid rate, as the result of industrialization would organize itself into a revolutionary front to overthrow the bourgeoisie and the capitalist system. The working class would then establish a system based on collective ownership of the means of production. These social and economic features of an ideal society reveal the true essence of socialism, which was outlined in the Manifesto. This piece of work marked a turning point in the history of socialism. In Europe, the 19th century was a time of great change; England and France had established tenacious capitalist systems. The publication of an essay of that much depth set the bases for modern socialism, and had great significance for the years to come, particularly in terms of its influence on the division of the capitalist West and the communist East.

Communism, and democratic socialism, are branches of the political ideology of socialism. Communism holds a more extreme interpretation of socialism. Indeed, communists believe that all private ownership should be replaced by collective ownership, where everyone is free to take what they need. Communism prevailed mainly in the Soviet Union before its collapse, in China, and Cuba. For much of its existence, the Soviet Union classified itself as socialist and longed for the monopoly of the term. However, due to their strict prohibition of private enterprises and repressive civil society, the Soviet Union would be considered communists. China’s lasting communist regime is another example of a communist country. For more than 70 years, the Chinese government-controlled a substantial part of social and economic activities in a repressive manner. With the emergence of economic relations with the West, the Chinese economy has turned more to a free-market system, but initially, the country had very strict laws regarding economic activities. Another key member in the communist sphere is the Republic of Cuba. The Cuban Communist Party, formerly known as the Popular Socialist Party led by Fidel Castro allied themselves in the Cold War with the Soviet Union. The Popular Socialist Party of Cuba became an important player in the Cold War, as key members would provide links to Russia that helped consolidate the relationship between the Soviet Union and Cuba while intensifying the United States' fears of the development of communism in Cuba. For Cuba, creating the communist party represented an extensive battle to secure its independence from imperial powers. The party rejected capitalist exploitation and political oppression by the United States (Sweig, 2009).

Democratic socialism emerged post World War II in most Western countries but has been challenged in recent years by the worldwide phenomena of globalization and neoliberalism. Democratic socialism envisions a more alleviated form of socialism where democratic means should be used only to achieve a socialist society. Democratic socialists reject dictatorships of the working class, unlike the communists. Moreover, they argue that in a social democratic system, fundamental rights and freedom of the population have to be respected. Democratic socialists advocate for some forms of collective ownership, consolidated with some public institutions, and cooperative enterprises where workers could have a voice in the business sector. This form of socialism advocates for government planning and regulation of the economy, through government provision, and subsidization, as well as the redistribution of income, through a tax system. In other words, these contemporary socialists envision a more mixed economy where governments would play a substantial role in the allocation of resources, as well as regulating the economy, and providing free or low-cost public services, such as health care, education, and child care, for “greater social and economic equality to achieve a meaningful democracy” (p. 67). Denmark and Finland are countries where democratic socialism prevails. Indeed, these two European countries have a wide range of welfare benefits, as well as the world’s best educational system, with no tuition fees. They are also the countries with the highest taxes in the world. Through these taxes, the Finland and Denmark governments allocate goods and services more equally amongst its population. Indeed, Denmark and Finland rank equality as the most important value of their countries.

In conclusion, the roots of socialism can be traced back to the English Civil War, and the French Revolution. The initial ideas about utopian societies have evolved and given rise to more revolutionary movements of the working class, where the struggle for equality and the division between the rich and the poor have been at the center of these conflicts. The ideas of Thomas More, Karl Marx, and Frederic Engel’s are still today, used as foundational groundworks for the socialism doctrine. Modern socialism fluctuates from communism to more democratic socialism and still prevails in many countries of the world.

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Compare and Contrast Essay on Economic Systems: Capitalism, Communism and Socialism. (2023, July 20). Edubirdie. Retrieved April 18, 2024, from
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