The Basics of Communism for the GED Social Studies Test
The GED Social Studies test will expect that you know some basics about Communism. On the opposite end of the economic spectrum from laissez-faire capitalism is Soviet-style communism. The state owns all means of production and regulates inputs and outputs along with wages and prices.
The state allocates resources and sets priorities, deciding how much of any item is produced and what it will cost. It sets quotas workers must meet. Because of state priorities, consumer goods are often in short supply, or of limited variety, and often of mediocre quality.
Karl Marx, a German philosopher and economist, popularized communism with the publication of his Communist Manifesto. The principle on which pure communism is based is “From each according to his ability, to each according to his need,” a slogan that predated the Communist Manifesto but that was popularized by Marx.
In practice, communism has never achieved the ideal Marx had envisioned. Here’s one example of how communism tends to fall short in terms of efficiency: After WWII, the East German government approved the production of private cars, including the Trabant. Because of steel shortages, the car body was made of a cotton and plastic resin body, and the car was equipped with a two-stroke engine.
Consumers had to pay the full price in advance, the equivalent of several years’ wages for the average worker, and then wait, sometimes several years, for delivery. When the Trabant’s designers wanted to introduce a new and better model, the state regulators denied permission. That was a common theme throughout the communist states. The Soviet workers’ car, the Lada, was a reproduction of a Fiat. It continued in production virtually unchanged for 30 years.
In what way can Soviet communism be viewed as a form of capitalism?
(A) It can’t.
(B) The state, rather than private individuals, owns all the businesses in the country.
(C) The state is the only employer in the country.
(D) The government controls all sales.
In Soviet communism, the state owned all businesses just as individuals own businesses in a capitalist system. The correct answer is Choice (B). Choice (A) is wrong because, in a way, Soviet communism is capitalistic; the only difference is that the state, rather than individuals, owns and profits from the businesses. Choices (C) and (D) are partially correct if you view the state as a private business owner, but in capitalism, the state isn’t the only employer in the country, nor does it control all sales.
Another problem with communism is that in the USSR and other communist states, consumer goods were not a priority. That was often given to industrial expansion to earn foreign currency to support the regime and for increasing production of military goods to expand borders and put down revolts, so shortages of consumer goods are common. However, communism does deliver some benefits to the people. In most communist countries, for example, healthcare and education are available at no cost.
Some experts are careful to point out that communism is an economic system and not a political system. As an economic system, it calls only for a reasonable approach to the division of labor and goods. However, the political system that often develops around communism is usually more dictatorial than democratic, giving rise to power and corruption that directs the flow of wealth to the country’s leaders at the expense of the people.