<p>First of all both communism and capitalism is poorly defined (you will generally not even find words capitalism and communism in standard economic textbooks unless they refer to history or feature exerts from news).</p>
<p>To my best knowledge the first one to apply the words capitalism and communism to an economic system was Marx (see Marx (1867) Das Kapital)* However, Marx did not do so rigorously and used the word fluidly. For example, in some places capitalist system is the system of contemporary British empire, in some other places is a system where capitalist class exploits labor class through expropriation of surplus labor and elsewhere it is just a system of free private exchange, private property and trade. On the other hand communism was defined as final stage of socialism which was supposed to only occur after state apparatus died out and society becomes classless, moneyless and property less. First, clearly under their original capitalism and communism cannot be the same (if not for anything else then just because communism under Marks understanding has to be classless and capitalism <strong>by Marx own definition</strong> cannot be classless).</p>
<p>However, as you can see above the original definition of systems was quite loose and open to interpretation (especially his definitions of capitalism on the account of communisms he was arguably bit more clear). As a result presently there are no unified definitions of capitalism or communism, especially not across social sciences. For example, in some strands of political science literature USSR would be called state capitalism, but in other strands of political science it would be considered communism. This does not mean that they are same this is result of different fields using different nomenclature. For example, physics uses word inflation to refer to inflation of space time. In economics, inflation is  positive change in price level - that does not mean inflation can be used interchangeably between fields, and in the same way in political science the authors who would define USSR to be state capitalism would have their own definition of communism that excludes USSR (e.g. see discussion of that in <a href="https://www.tandfonline.com/doi/abs/10.1080/08935699308658054?journalCode=rrmx20" rel="nofollow noreferrer">Resnick &amp; Wolff 2009</a>). This was a bit of a tangent but my point is to just illustrate there are various definitions of these terms.</p>
<p>In economics, and we are on economics site so we will be using economics terminology, communism and capitalism is generally avoided altogether. However, if authors use words communism and capitalism then <strong>generally</strong> they use the following terminologies (although let me emphasize many authors can have different definitions).</p>
<p>Capitalism:</p>
<blockquote>
<p>Capitalism refers to the economic system wherein decisions about production, investment, and exchange are made chiefly by private individuals or corporations, especially as contrasted with collective, public, or state ownership. Attributes central to capitalism are private property, the division of labor, voluntary exchange, a money price-system, and competitive markets.</p>
</blockquote>
<p>This is the definition of capitalism that we use on Economics.SE in our tag for capitalism (and the tag you also tagged your question with so I assume that this is also the definition you are willing to accept).</p>
<p>Communism is typically defined as centrally planed economy. For example, in Mankiws principles of economics pp 9 :</p>
<blockquote>
<p>Communist countries operated on the premise that government officials were in
the best position to allocate the economy’s scarce resources. These central planners decided what goods and services were produced, how much was produced,
and who produced and consumed these goods and services. The theory behind
central planning was that only the government could organize economic activity
in a way that promoted economic well-being for the country as a whole.</p>
</blockquote>
<p>However, again the word communism and capitalism are not generally used for example Mankiw Principles of Economics has only 4 instances of word communism (including index at the end) and 3 instances of word capitalism (including index) in the whole book. In economics we typically use central planning and market economy.</p>
<p>Under the definitions of capitalism and communism above they are clearly diametrically opposed. Under capitalism the economic decision making is primarily done on individual basis while under communism economic decisions are centrally planned.</p>
<p>However, again the answer above might change if you ask the same question on political science or some sociology site. But from economic perspective they are not considered equivalent.</p>
<hr />
<p><sub> * although the adjective capitalist or description of class of people as the capitalists predates Marx and was already employed by Ricardo  </sub></p>

CC BY-SA 4.0
2021-05-06T16:39:01.887Z
Thanks - I think I'm understanding better: Free market and central planning are extremes (and every nation's economy is somewhere between these extremes), and "capitalism" could be considered any point between the extremes (primarily the "free market half" of the scale), and "communism" could be considered any point between the extremes (primarily the "central planning half" of the scale)?
Brendan
CC BY-SA 4.0
2021-05-06T16:43:57.440Z
@Brendan in essence yes although anything that combines central planning and free market is technically a mixed economy, commonly if the debate is not too technical when an economist would say market economy they would mean predominantly market economy (e.g. US, Sweden, Denmark)  and if they would say centrally planned economy they would talk about predominantly centrally planned (e.g. Cuba). However, in rigorous models like the first and second welfare theorem giskard mentioned market economy would actually mean no central planning at all
1muflon1
CC BY-SA 4.0
2021-05-06T15:54:45.967Z
2021-05-06T15:54:45.967Z
1muflon1
<p><strong>Engineering Self-Adaptive Systems through Feedback Loops:</strong></p>
<p>Political and economic systems have properties of self-adaptive systems:</p>
<p><a href="https://people.cs.umass.edu/%7Ebrun/pubs/pubs/Brun09SEfSAS.pdf" rel="nofollow noreferrer">https://people.cs.umass.edu/~brun/pubs/pubs/Brun09SEfSAS.pdf</a></p>
<blockquote>
<p>Self-adaptive systems can be characterized by how they operate or how they are analyzed, and by multiple dimensions of properties including centralized and decentralized, top-down and bottom-up, feedback latency (slow vs. fast), or environment uncertainty (low vs. high). A top-down self-adaptive system is often centralized and operates with the guidance of a central controller or policy, assesses its own behavior in the current surroundings, and adapts itself if the monitoring and analysis warrants it. Such a system often operates with an explicit internal representation of itself and its global goals. By analyzing the components of atop-down self-adaptive system, one can compose and deduce the behavior of the whole system. In contrast, a cooperative self-adaptive system or self-organizing system is often decentralized, operates without a central authority, and is typically composed bottom-up of a large number of components that interact locally according to simple rules. The global behavior of the system emerges from these local interactions. It is difficult to deduce properties of the global system by analyzing only the local properties of its parts. Such systems do not necessarily use internal representations of global properties or goals; they are often inspired by biological or sociological phenomena.</p>
</blockquote>
<blockquote>
<p>Figure 1 on nominal page 52 (pdf page 5) shows an &quot;Autonomic Control Loop&quot; with four related functional blocks: Collect (Sense environment), Analyze, Decide, and Act.</p>
</blockquote>
<p>When human beings interact with nature and/or each other as autonomous agents we must generate an internal model of the self and other persons as autonomous agents to make decisions and take actions in the natural and social world. So the agents have to recognize models of how the self and the other agents interact in the political-economic context.</p>
<p><strong>The Purpose of Law</strong></p>
<p>by Hugh Gibbons</p>
<p><a href="http://www.biologyoflaw.org/Purpose/PurposeLaw.pdf" rel="nofollow noreferrer">http://www.biologyoflaw.org/Purpose/PurposeLaw.pdf</a></p>
<blockquote>
<p>The purpose of law is to expand freedom.</p>
</blockquote>
<blockquote>
<p>Freedom is the experience of an individual who is free of constraint.</p>
</blockquote>
<blockquote>
<p>Constraint is the general term for reductions in freedom, whether real (e.g., loss of a limb) or imagined (e.g., paranoia). Constraints come in two flavors that have vastly different implications in the law. “Willed” constraints are the result of the actions of other people. They are produced by intelligence, and they can be reduced or eliminated by responsible behavior. Willed constraints, in the form of injuries, lies, breaches of promise, monopolizing, abuse of office, and so on, are the primary subject matter of law. “Natural” constraints are the constraints that are not driven by will—gravity, disease, ignorance, decay, and so on. Natural constraints are not legally significant. Viruses, droughts, and gravity are not moral actors; no legal action can be brought against them. But natural constraints that are under the control of a willed actor do support a cause of action, say, against the logger who carelessly felled the tree onto your car.</p>
</blockquote>
<blockquote>
<p>Law uses two very different methods to increase freedom. Protecting and expanding freedom are the purpose of each one.</p>
</blockquote>
<blockquote>
<p>First, law controls willed constraints by enforcing rights. Where a breach of duty threatens to, or actually does, diminish the prospects of a person, law uses regulatory and adjudicatory methods to redress the rights thus created.</p>
</blockquote>
<blockquote>
<p>Second, law addresses natural constraints by creating entitlement systems. Creating a property law system, for example, lets people establish an authoritative relationship with the resources that constitute an essential part of their causal capacity. The person who is protected by copyright law has a way of turning the tunes in his head or sketches on a pad of paper into an economic resource.</p>
</blockquote>
<p>This model of law in the capitalist society argues that freedom of the individual is or should be the purpose of law. If, for example, property rights deprive too many or even a few people of freedom then those laws should be adapted or will adapt via emergence to expand freedom in a society that values freedom. But if the society does not value freedom of individuals then the law can be oppressive.</p>
<p><strong>Capital</strong></p>
<p>Capital is a thing produced by agents in the model. Economists do not all agree on the exact meaning of capital as an economic concept.</p>
<p><a href="https://www.economicsdiscussion.net/capital-2/capital-in-economics-definitions-characteristics-functions-examples-and-importance-economics/31131" rel="nofollow noreferrer">https://www.economicsdiscussion.net/capital-2/capital-in-economics-definitions-characteristics-functions-examples-and-importance-economics/31131</a></p>
<blockquote>
<p>“Capital consists of all those goods, existing at present time which can be used in anyway, so as to satisfy wants during the subsequent years”. -J. R. HICKS According to this, all those things, which satisfy human wants are capital goods. It means that both, consumer goods as well as producer goods should be included in ‘capital’, as both satisfy human wants in one way or the other. But as a matter of fact, the consumer goods are not included in ‘capital’ because the consumer goods will be consumed in a single use only and will not be utilized for further production of wealth.</p>
</blockquote>
<blockquote>
<p>“Capital is the produced means of production”-BOHM BAWERK. According to this definition, only those goods are included in capital, which have been produced by human efforts.</p>
</blockquote>
<blockquote>
<p>“Capital goods are the products (tools) of the past labour (efforts) used for further production.”-VON SICKLE and ROGER. Thus, capital is productive in the sense that it enables a worker to produce more goods or services, during the physical life of the product.</p>
</blockquote>
<blockquote>
<p>“Capital goods are produced goods that can be used as factor input for further production.” -PROF. SAMUELSON Thus, several economists have defined ‘capital’ differently.</p>
</blockquote>
<p>The article describes commonly described attributes or features of capital even though there is not one uniform definition of the meaning of &quot;capital&quot;.</p>
<p><strong>State Capitalism versus Socialism</strong></p>
<p><a href="https://www.marxists.org/archive/petroff/1934/state-capitalism.htm" rel="nofollow noreferrer">https://www.marxists.org/archive/petroff/1934/state-capitalism.htm</a></p>
<blockquote>
<p>Marx, Engels, and generally the elder generation of socialists, visualised Socialism as the highest stage of human society, economically, socially, morally and intellectually.</p>
</blockquote>
<blockquote>
<p>All the accumulated treasures in machines and technical appliances created by the genius of man, all that science and art had given to the human race in generations is to be utilised, not for the few, but for the benefit of mankind as a whole.</p>
</blockquote>
<blockquote>
<p>Based on the common ownership of the means of production and distribution, a new and higher economic system is to be built up, raising production to a higher economic level, and ending all social oppression by dissolving the hostile classes into a community of free and equal producers striving not for sectional interests, but for the common good.</p>
</blockquote>
<blockquote>
<p>This socialist commonwealth, liberating the individual from all economic, political and social oppression, would provide the basis, for real liberty and for the full and harmonious development of the personality, giving full scope for the growth of the creative faculties of the mind.</p>
</blockquote>
<blockquote>
<p>The pioneers of socialist thought believed that in fighting for this great ideal, socialists will rise to a high moral level inspiring the masses with love of liberty and hatred against any kind of oppression.</p>
</blockquote>
<blockquote>
<p>State capitalism concentrates an overwhelming power in the hands of the state, and places the citizen completely at the mercy of the State.</p>
</blockquote>
<blockquote>
<p>If this State is not run by the working-class there is the grave danger that the ruling class may use this tremendous power to subjugate the people and oust the working-class front all the positions they have conquered in a century of struggle.</p>
</blockquote>
<blockquote>
<p>If this State is in the hands of a working-class party there is the danger that, under certain conditions, an all mighty bureaucracy might grow up. From a sheepdog it may turn into a wolf, becoming a danger to the very flock it should guard.</p>
</blockquote>
<blockquote>
<p>Under private capitalism in a democratic State the government has no substantial direct income. It raises revenue and makes expenditure by the authorisation of Parliament. This gives to Parliament a great power of control over the executive.</p>
</blockquote>
<blockquote>
<p>Under State capitalism the government derives its income automatically from the economic enterprises of the State. It thus has a tendency to free itself from parliamentary control, to become the master of Parliament and to turn the Members of Parliament into obedient civil servants.</p>
</blockquote>
<blockquote>
<p>The State, as the owner of banking industry, agriculture and transport becomes the universal employer, the universal landlord. It controls everything on which the fate and happiness of the individual citizen depend.</p>
</blockquote>
<blockquote>
<p>The citizen is dependent on the State as regards his employment, his housing, his supplies, his amusement, his educational and transport facilities. A conflict with the State might affect the citizen as an employee, tenant, etc.</p>
</blockquote>
<blockquote>
<p>This enormous power of the State over the individual citizen must needs call forth or strengthen tendencies towards a dictatorship.</p>
</blockquote>
<blockquote>
<p>Therein lies the chief danger of State capitalism. It hides an abyss into which the nation may easily tumble, sinking back into barbarism instead of making its way further towards the sunny heights of Socialism.</p>
</blockquote>
<p><strong>The Political Economy of Capitalism</strong></p>
<p>by Bruce R. Scott</p>
<p><a href="https://www.hbs.edu/ris/Publication%20Files/07-037.pdf" rel="nofollow noreferrer">https://www.hbs.edu/ris/Publication%20Files/07-037.pdf</a></p>
<blockquote>
<p>Capitalism  is  often  defined  as  an  economic  system  where  private  actors  are  allowed  to  own  and  control  the  use  of  property  in  accord  with  their  own  interests,  and  where  the  invisible  hand  of  the  pricing  mechanism  coordinates  supply  and  demand  in  markets in a way that is automatically in the best interests of society.  Government, in this perspective, is often described as responsible for peace, justice, and tolerable taxes.</p>
</blockquote>
<blockquote>
<p>This  paper  defines  capitalism  as  a  system  of  indirect  governance  for  economic  relationships, where all markets exist within institutional frameworks that are provided by political  authorities,  i.e.  governments.  In  this  second  perspective  capitalism  is  a  three  level  system  much  like  any  organized  sports.    Markets  occupy  the  first  level,  where  the  competition takes place; the institutional foundations that underpin those markets are the second; and the political authority that administers the system is the third.  While markets do  indeed  coordinate  supply  and  demand  with  the  help  of  the  invisible  hand  in  a  short  term,  quasi-static  perspective,  government  coordinates  the  modernization  of  market  frameworks  in  accord  with  changing  circumstances,  including  changing  perceptions  of  societal costs and benefits. In this broader perspective government has two distinct roles, one  to  administer  the  existing  institutional  frameworks,  including  the  provision  of  infrastructure and the administration of laws and regulations, and the second to mobilize political  power  to  bring  about  modernization  of  those  frameworks  as  circumstances  and/or societal priorities change.   Thus, for a capitalist system to evolve in an effective developmental sense through time, it must have two hands and not one: an invisible hand that is implicit in the pricing mechanism and a visible hand that is explicitly managed by government  through  a  legislature  and  a  bureaucracy.    Inevitably  the  visible  hand  has  a  strategy, no matter how implicit, short sighted or incoherent that strategy may be.</p>
</blockquote>

CC BY-SA 4.0
2021-05-06T20:31:27.337Z
2021-05-06T23:13:42.450Z
2021-05-06T23:13:42.450Z
SystemTheory
<p>I'm mostly a software developer, and we like to assign structures containing fields to things.</p>
<p>For capitalism; if every thing had an <code>owner</code> field, an <code>authorized controller</code> field and an <code>authorized user</code> field; then it'd be enough to cover most situations (see note) - e.g. if you buy a thing you'd become <code>owner</code>, <code>authorized controller</code> and <code>authorized user</code>; if a thing is leased/hired/rented then the <code>owner</code> and <code>authorized controller</code> remain the same but someone else becomes <code>authorized user</code>, etc.</p>
<p><em>Note: For a full software model you'd probably want a lot more fields - authorized repairer/maintainer, authorized destroyer (e.g. for food, recycling, etc), splitting of &quot;user&quot; into multiple categories, etc. You'd also need to be able to handle collectives (e.g. assign &quot;50% Fred and 50% Jane&quot; to a field) and a few other things. I don't think any of this complexity matters for the question I'm asking.</em></p>
<p>Now, what if someone magically changed all the <code>owner</code> fields for all things to &quot;the people&quot;; and when buying a thing instead of paying &quot;money&quot; to become <code>owner</code> you pay &quot;social credits&quot; to become <code>authorized controller</code> (and <code>owner</code> remains &quot;the people&quot;). In this case, you'd still have the same rights and control as you did when it was capitalism (because all of that depends on other fields), it's just that the contents of an irrelevant field is different.</p>
<p><strong>Is it possible for capitalism and (one very specific form of) communism to be effectively identical in practice? Is it reasonable to say that, in theory, any differences are in how control and rights are managed by the system (and not ownership, and not whether someone felt like calling it capitalism or communism)?</strong></p>

CC BY-SA 4.0
2021-05-06T14:54:20.353Z
1. This is very vague, the analogy does not really seem to capture the essence of planned economies.
Giskard
CC BY-SA 4.0
2021-05-06T14:54:30.953Z
2. Capitalism and communism are also vague concepts with inexact definitons.
Giskard
CC BY-SA 4.0
2021-05-06T14:54:34.193Z
3. It is very reasonable to say that any differences are in how control and rights are managed by the system, but this is not very surprising.
Giskard
CC BY-SA 4.0
2021-05-06T15:08:00.607Z
@Giskard: Planned by whom? It's infeasible for a single person (e.g. a dictator) to plan everything, so planning is delegated to groups that are "owned" by ... Oh, that just brings us back to whether ownership is relevant.
Brendan
CC BY-SA 4.0
2021-05-06T15:12:40.480Z
Sorry, I don't really understand your comment. (Seems to be ironic?) The economic policy of communist governments is usually some sort of [planned economy](https://en.wikipedia.org/wiki/Planned_economy), this is the term used. If you are looking for political definitons, perhaps take your question to [Politics.SE]?
Giskard
CC BY-SA 4.0
2021-05-06T15:36:46.313Z
@Giskard: I'm trying/failing to understand the fundamental difference between communism and capitalism; and now also trying/falling to understand the differences between "planned by companies trying to maximize profit in a system influenced by subsidies and taxes" and "planned by decentralized groups trying to maximize some alternative measure of community good".
Brendan
CC BY-SA 4.0
2021-05-06T15:43:35.207Z
Oh! Well, your software analogy obfuscates this quite a bit - at least for me! I guess someone will write a detailed answer based on the [second fundamental theorem of welfare economics](https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics).
Giskard
<nonexpert><capitalism><communism>
The difference between capitalism and communism
Brendan
# The difference between capitalism and communism

(Asked by: username_0 on 2021-05-06)

I'm mostly a software developer, and we like to assign structures containing fields to things.

For capitalism; if every thing had an `owner` field, an `authorized controller` field and an `authorized user` field; then it'd be enough to cover most situations (see note) - e.g. if you buy a thing you'd become `owner`, `authorized controller` and `authorized user`; if a thing is leased/hired/rented then the `owner` and `authorized controller` remain the same but someone else becomes `authorized user`, etc.

*Note: For a full software model you'd probably want a lot more fields - authorized repairer/maintainer, authorized destroyer (e.g. for food, recycling, etc), splitting of "user" into multiple categories, etc. You'd also need to be able to handle collectives (e.g. assign "50% Fred and 50% Jane" to a field) and a few other things. I don't think any of this complexity matters for the question I'm asking.*

Now, what if someone magically changed all the `owner` fields for all things to "the people"; and when buying a thing instead of paying "money" to become `owner` you pay "social credits" to become `authorized controller` (and `owner` remains "the people"). In this case, you'd still have the same rights and control as you did when it was capitalism (because all of that depends on other fields), it's just that the contents of an irrelevant field is different.

**Is it possible for capitalism and (one very specific form of) communism to be effectively identical in practice? Is it reasonable to say that, in theory, any differences are in how control and rights are managed by the system (and not ownership, and not whether someone felt like calling it capitalism or communism)?**

**Tags:** nonexpert, capitalism, communism

> **Comments:**
> **username_1**: 1. This is very vague, the analogy does not really seem to capture the essence of planned economies.  
> **username_1**: 2. Capitalism and communism are also vague concepts with inexact definitons.  
> **username_1**: 3. It is very reasonable to say that any differences are in how control and rights are managed by the system, but this is not very surprising.  
> **username_0**: @username_1: Planned by whom? It's infeasible for a single person (e.g. a dictator) to plan everything, so planning is delegated to groups that are "owned" by ... Oh, that just brings us back to whether ownership is relevant.  
> **username_1**: Sorry, I don't really understand your comment. (Seems to be ironic?) The economic policy of communist governments is usually some sort of [planned economy](https://en.wikipedia.org/wiki/Planned_economy), this is the term used. If you are looking for political definitons, perhaps take your question to [Politics.SE]?  
> **username_0**: @username_1: I'm trying/failing to understand the fundamental difference between communism and capitalism; and now also trying/falling to understand the differences between "planned by companies trying to maximize profit in a system influenced by subsidies and taxes" and "planned by decentralized groups trying to maximize some alternative measure of community good".  
> **username_1**: Oh! Well, your software analogy obfuscates this quite a bit - at least for me! I guess someone will write a detailed answer based on the [second fundamental theorem of welfare economics](https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics).  

---

## 2 answers

### Answer by username_2 on 2021-05-06. Score: 1 | Accepted answer

First of all both communism and capitalism is poorly defined (you will generally not even find words capitalism and communism in standard economic textbooks unless they refer to history or feature exerts from news).

To my best knowledge the first one to apply the words capitalism and communism to an economic system was Marx (see Marx (1867) Das Kapital)\* However, Marx did not do so rigorously and used the word fluidly. For example, in some places capitalist system is the system of contemporary British empire, in some other places is a system where capitalist class exploits labor class through expropriation of surplus labor and elsewhere it is just a system of free private exchange, private property and trade. On the other hand communism was defined as final stage of socialism which was supposed to only occur after state apparatus died out and society becomes classless, moneyless and property less. First, clearly under their original capitalism and communism cannot be the same (if not for anything else then just because communism under Marks understanding has to be classless and capitalism **by Marx own definition** cannot be classless).

However, as you can see above the original definition of systems was quite loose and open to interpretation (especially his definitions of capitalism on the account of communisms he was arguably bit more clear). As a result presently there are no unified definitions of capitalism or communism, especially not across social sciences. For example, in some strands of political science literature USSR would be called state capitalism, but in other strands of political science it would be considered communism. This does not mean that they are same this is result of different fields using different nomenclature. For example, physics uses word inflation to refer to inflation of space time. In economics, inflation is positive change in price level - that does not mean inflation can be used interchangeably between fields, and in the same way in political science the authors who would define USSR to be state capitalism would have their own definition of communism that excludes USSR (e.g. see discussion of that in [Resnick & Wolff 2009](https://www.tandfonline.com/doi/abs/10.1080/08935699308658054?journalCode=rrmx20)). This was a bit of a tangent but my point is to just illustrate there are various definitions of these terms.

In economics, and we are on economics site so we will be using economics terminology, communism and capitalism is generally avoided altogether. However, if authors use words communism and capitalism then **generally** they use the following terminologies (although let me emphasize many authors can have different definitions).

Capitalism:

> Capitalism refers to the economic system wherein decisions about production, investment, and exchange are made chiefly by private individuals or corporations, especially as contrasted with collective, public, or state ownership. Attributes central to capitalism are private property, the division of labor, voluntary exchange, a money price-system, and competitive markets.

This is the definition of capitalism that we use on Economics.SE in our tag for capitalism (and the tag you also tagged your question with so I assume that this is also the definition you are willing to accept).

Communism is typically defined as centrally planed economy. For example, in Mankiws principles of economics pp 9 :

> Communist countries operated on the premise that government officials were in
> the best position to allocate the economy’s scarce resources. These central planners decided what goods and services were produced, how much was produced,
> and who produced and consumed these goods and services. The theory behind
> central planning was that only the government could organize economic activity
> in a way that promoted economic well-being for the country as a whole.

However, again the word communism and capitalism are not generally used for example Mankiw Principles of Economics has only 4 instances of word communism (including index at the end) and 3 instances of word capitalism (including index) in the whole book. In economics we typically use central planning and market economy.

Under the definitions of capitalism and communism above they are clearly diametrically opposed. Under capitalism the economic decision making is primarily done on individual basis while under communism economic decisions are centrally planned.

However, again the answer above might change if you ask the same question on political science or some sociology site. But from economic perspective they are not considered equivalent.

---

\* although the adjective capitalist or description of class of people as the capitalists predates Marx and was already employed by Ricardo

> **Comments:**
> **username_0**: Thanks - I think I'm understanding better: Free market and central planning are extremes (and every nation's economy is somewhere between these extremes), and "capitalism" could be considered any point between the extremes (primarily the "free market half" of the scale), and "communism" could be considered any point between the extremes (primarily the "central planning half" of the scale)?  
> **username_2**: @username_0 in essence yes although anything that combines central planning and free market is technically a mixed economy, commonly if the debate is not too technical when an economist would say market economy they would mean predominantly market economy (e.g. US, Sweden, Denmark)  and if they would say centrally planned economy they would talk about predominantly centrally planned (e.g. Cuba). However, in rigorous models like the first and second welfare theorem giskard mentioned market economy would actually mean no central planning at all  

---

### Answer by username_3 on 2021-05-06. Score: 0

**Engineering Self-Adaptive Systems through Feedback Loops:**

Political and economic systems have properties of self-adaptive systems:

[https://people.cs.umass.edu/~brun/pubs/pubs/Brun09SEfSAS.pdf](https://people.cs.umass.edu/%7Ebrun/pubs/pubs/Brun09SEfSAS.pdf)

> Self-adaptive systems can be characterized by how they operate or how they are analyzed, and by multiple dimensions of properties including centralized and decentralized, top-down and bottom-up, feedback latency (slow vs. fast), or environment uncertainty (low vs. high). A top-down self-adaptive system is often centralized and operates with the guidance of a central controller or policy, assesses its own behavior in the current surroundings, and adapts itself if the monitoring and analysis warrants it. Such a system often operates with an explicit internal representation of itself and its global goals. By analyzing the components of atop-down self-adaptive system, one can compose and deduce the behavior of the whole system. In contrast, a cooperative self-adaptive system or self-organizing system is often decentralized, operates without a central authority, and is typically composed bottom-up of a large number of components that interact locally according to simple rules. The global behavior of the system emerges from these local interactions. It is difficult to deduce properties of the global system by analyzing only the local properties of its parts. Such systems do not necessarily use internal representations of global properties or goals; they are often inspired by biological or sociological phenomena.

> Figure 1 on nominal page 52 (pdf page 5) shows an "Autonomic Control Loop" with four related functional blocks: Collect (Sense environment), Analyze, Decide, and Act.

When human beings interact with nature and/or each other as autonomous agents we must generate an internal model of the self and other persons as autonomous agents to make decisions and take actions in the natural and social world. So the agents have to recognize models of how the self and the other agents interact in the political-economic context.

**The Purpose of Law**

by Hugh Gibbons

<http://www.biologyoflaw.org/Purpose/PurposeLaw.pdf>

> The purpose of law is to expand freedom.

> Freedom is the experience of an individual who is free of constraint.

> Constraint is the general term for reductions in freedom, whether real (e.g., loss of a limb) or imagined (e.g., paranoia). Constraints come in two flavors that have vastly different implications in the law. “Willed” constraints are the result of the actions of other people. They are produced by intelligence, and they can be reduced or eliminated by responsible behavior. Willed constraints, in the form of injuries, lies, breaches of promise, monopolizing, abuse of office, and so on, are the primary subject matter of law. “Natural” constraints are the constraints that are not driven by will—gravity, disease, ignorance, decay, and so on. Natural constraints are not legally significant. Viruses, droughts, and gravity are not moral actors; no legal action can be brought against them. But natural constraints that are under the control of a willed actor do support a cause of action, say, against the logger who carelessly felled the tree onto your car.

> Law uses two very different methods to increase freedom. Protecting and expanding freedom are the purpose of each one.

> First, law controls willed constraints by enforcing rights. Where a breach of duty threatens to, or actually does, diminish the prospects of a person, law uses regulatory and adjudicatory methods to redress the rights thus created.

> Second, law addresses natural constraints by creating entitlement systems. Creating a property law system, for example, lets people establish an authoritative relationship with the resources that constitute an essential part of their causal capacity. The person who is protected by copyright law has a way of turning the tunes in his head or sketches on a pad of paper into an economic resource.

This model of law in the capitalist society argues that freedom of the individual is or should be the purpose of law. If, for example, property rights deprive too many or even a few people of freedom then those laws should be adapted or will adapt via emergence to expand freedom in a society that values freedom. But if the society does not value freedom of individuals then the law can be oppressive.

**Capital**

Capital is a thing produced by agents in the model. Economists do not all agree on the exact meaning of capital as an economic concept.

<https://www.economicsdiscussion.net/capital-2/capital-in-economics-definitions-characteristics-functions-examples-and-importance-economics/31131>

> “Capital consists of all those goods, existing at present time which can be used in anyway, so as to satisfy wants during the subsequent years”. -J. R. HICKS According to this, all those things, which satisfy human wants are capital goods. It means that both, consumer goods as well as producer goods should be included in ‘capital’, as both satisfy human wants in one way or the other. But as a matter of fact, the consumer goods are not included in ‘capital’ because the consumer goods will be consumed in a single use only and will not be utilized for further production of wealth.

> “Capital is the produced means of production”-BOHM BAWERK. According to this definition, only those goods are included in capital, which have been produced by human efforts.

> “Capital goods are the products (tools) of the past labour (efforts) used for further production.”-VON SICKLE and ROGER. Thus, capital is productive in the sense that it enables a worker to produce more goods or services, during the physical life of the product.

> “Capital goods are produced goods that can be used as factor input for further production.” -PROF. SAMUELSON Thus, several economists have defined ‘capital’ differently.

The article describes commonly described attributes or features of capital even though there is not one uniform definition of the meaning of "capital".

**State Capitalism versus Socialism**

<https://www.marxists.org/archive/petroff/1934/state-capitalism.htm>

> Marx, Engels, and generally the elder generation of socialists, visualised Socialism as the highest stage of human society, economically, socially, morally and intellectually.

> All the accumulated treasures in machines and technical appliances created by the genius of man, all that science and art had given to the human race in generations is to be utilised, not for the few, but for the benefit of mankind as a whole.

> Based on the common ownership of the means of production and distribution, a new and higher economic system is to be built up, raising production to a higher economic level, and ending all social oppression by dissolving the hostile classes into a community of free and equal producers striving not for sectional interests, but for the common good.

> This socialist commonwealth, liberating the individual from all economic, political and social oppression, would provide the basis, for real liberty and for the full and harmonious development of the personality, giving full scope for the growth of the creative faculties of the mind.

> The pioneers of socialist thought believed that in fighting for this great ideal, socialists will rise to a high moral level inspiring the masses with love of liberty and hatred against any kind of oppression.

> State capitalism concentrates an overwhelming power in the hands of the state, and places the citizen completely at the mercy of the State.

> If this State is not run by the working-class there is the grave danger that the ruling class may use this tremendous power to subjugate the people and oust the working-class front all the positions they have conquered in a century of struggle.

> If this State is in the hands of a working-class party there is the danger that, under certain conditions, an all mighty bureaucracy might grow up. From a sheepdog it may turn into a wolf, becoming a danger to the very flock it should guard.

> Under private capitalism in a democratic State the government has no substantial direct income. It raises revenue and makes expenditure by the authorisation of Parliament. This gives to Parliament a great power of control over the executive.

> Under State capitalism the government derives its income automatically from the economic enterprises of the State. It thus has a tendency to free itself from parliamentary control, to become the master of Parliament and to turn the Members of Parliament into obedient civil servants.

> The State, as the owner of banking industry, agriculture and transport becomes the universal employer, the universal landlord. It controls everything on which the fate and happiness of the individual citizen depend.

> The citizen is dependent on the State as regards his employment, his housing, his supplies, his amusement, his educational and transport facilities. A conflict with the State might affect the citizen as an employee, tenant, etc.

> This enormous power of the State over the individual citizen must needs call forth or strengthen tendencies towards a dictatorship.

> Therein lies the chief danger of State capitalism. It hides an abyss into which the nation may easily tumble, sinking back into barbarism instead of making its way further towards the sunny heights of Socialism.

**The Political Economy of Capitalism**

by Bruce R. Scott

<https://www.hbs.edu/ris/Publication%20Files/07-037.pdf>

> Capitalism is often defined as an economic system where private actors are allowed to own and control the use of property in accord with their own interests, and where the invisible hand of the pricing mechanism coordinates supply and demand in markets in a way that is automatically in the best interests of society. Government, in this perspective, is often described as responsible for peace, justice, and tolerable taxes.

> This paper defines capitalism as a system of indirect governance for economic relationships, where all markets exist within institutional frameworks that are provided by political authorities, i.e. governments. In this second perspective capitalism is a three level system much like any organized sports. Markets occupy the first level, where the competition takes place; the institutional foundations that underpin those markets are the second; and the political authority that administers the system is the third. While markets do indeed coordinate supply and demand with the help of the invisible hand in a short term, quasi-static perspective, government coordinates the modernization of market frameworks in accord with changing circumstances, including changing perceptions of societal costs and benefits. In this broader perspective government has two distinct roles, one to administer the existing institutional frameworks, including the provision of infrastructure and the administration of laws and regulations, and the second to mobilize political power to bring about modernization of those frameworks as circumstances and/or societal priorities change. Thus, for a capitalist system to evolve in an effective developmental sense through time, it must have two hands and not one: an invisible hand that is implicit in the pricing mechanism and a visible hand that is explicitly managed by government through a legislature and a bureaucracy. Inevitably the visible hand has a strategy, no matter how implicit, short sighted or incoherent that strategy may be.


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