Communist Economy

Going by the simplest definition possible, a communist economy is an economy managed by the communist state, however, there is much more to understand beyond this simple definition, and that's exactly the reason why the concept of the communist economic system is considered to be so intricate. Before we move on to the seemingly intricate details of a communist economy, let's try to get a deeper meaning of the underlying concept of communism.

What is Communism?
Communism is defined as a social structure which is typically characterized by the abolition of classes and a common control over the property. The founder of modern communism - Karl Marx, coined the term 'communism' for a classless, stateless, oppression free society, wherein the decisions about the political as well as economic policies pertaining to the state, were supposed to taken by all the members of the society in a democratic manner. Marx put forth this social structure as a replacement to the prevailing capitalist system, wherein the working class was always subjected to exploitation from the capitalist class. He also advocated the dictatorship of the working class was the need of the hour, and the apt solution for capitalism which was alleged to be a barrier to development.

What is a Communist Economy?
The communist economy, by and large, is based on the thoughts and beliefs of Karl Marx. Even though Marx mentioned the word 'economy' in his definition of communism, he never gave an elaborate description of how communism would function as an economic system. However, taking into consideration the norms of communism, the communist economy can be defined as an economy characterized by the common ownership of the means of production, as opposed to private ownership in the capitalist economy. In this type of economy, social welfare for the people is given a priority over individual's profit.

How does a Communist Economy Work?
The belief that the society is more important than an individual in a communist economy, means that each individual is supposed to work as per his or her capacity, and gets paid as per his or her needs. In this type of economic system only those goods and services are provided which the individuals need, instead of those which they want. In a pure communist economic system, all the resources are publicly owned. This is done with the belief that the public ownership of resources minimizes the inequalities in wealth distribution, and helps in realizing the desired social objectives.

Communist Economy Advantages and Disadvantages
The biggest advantage of the communist economic system is the fact that everybody has what it needs and each citizen of the society contributes to the development process as per his/her capacity. More importantly, the economic disparities are also abolished, and economic stability is achieved. Coming to the loopholes, this system doesn't take into consideration the fact that all the individuals are not same. Similarly, the lack of competition means there is no desire and initiative for improvement. The fact that the entire planning process is in the hand of central planners tends to delay the implementation of policies.

This was brief information about the communist economy, and its various features. There are several examples of the communist economic system. This system prevailed in the Soviet Union before it came down. At present, this system is followed by countries like China, Vietnam and Cuba. Even though these countries continue to embrace this economic system, its popularity has lately received a major dent. At the time of its introduction, the appealing characteristics of communist economy earned it a decent following across the world, especially in the countries with huge slice of the population representing the working class. More recently, however, things have changed, and most of the countries are opting for the mixed economy, rather than resorting to extreme left with the communist economy or the extreme right with the capitalist economy.