An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.“Capitalism.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/capitalism. Accessed 27 Apr. 2020.
This definition captures some of the properties of market-based — or capitalist — economies. The businesses that produce the goods and services that we buy are privately owned. And those businesses hire the workers who are critical to the success of the business. Workers also buy their products. This system is characterized by consumer sovereignty — consumers ultimately decide what gets produced through their votes (or purchases) in the marketplace.
Regarding various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods. Moreover, a system of society or group living in which there is no private property. Socialism reflects a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.“Socialism.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/socialism. Accessed 5 May. 2020.
In this standard definition of socialism, the emphasis is on the absence of private property and the collective ownership of property, especially the means of production (nonhuman resources used in the production process, such as machines). Often overlooked is the notion that the government, acting on behalf of the collective, can make decisions that are going to lead to better outcomes than individuals acting on their own. That is, the government knows best.
Interestingly, many self-proclaimed socialists today seem to believe that government does not have to own property, but only be able to exercise considerable control over private property. This control is to be directed toward ends with which many individuals may not agree. Ironically, this type of economic system is more representative of fascism than conventional views of socialism.
A theory advocating for the elimination of private property through a system in which goods are owned in common and are available to all as needed. Communism reflects a doctrine based on revolutionary Marxian socialism and Marxism-Leninism that was the official ideology of the U.S.S.R. This represents a totalitarian system of government.“Communism.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/communism. Accessed 5 May. 2020.
In communism, the ideology—developed in detail by Karl Marx — and the communist party are central. The ideology is believed to capture the truth about economic and social systems, and the party—especially the secretary–is the custodian of the ideology. Capitalism must give way to communism and communism brings on an eternal utopia. In these circumstances, communist leaders who are faithful to the ideology cannot make errors. To question their decisions is tantamount to disloyalty and heresy. More than 100 million have died over the past century, and they serve as testimony that communist systems do not tolerate criticism or dissent.
A political philosophy, movement, or regime that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.“Fascism.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/fascism. Accessed 7 May. 2020.
To the surprise of many, fascism is a variant of socialism. So is communism. Similar to communism, fascism has an ideology, but that ideology is less well developed. Whereas communism is global in scope, fascism focuses on the superiority of a race or nation. Like communism, the fascist economy is centrally directed, but property is privately owned. Nonetheless, property owners are told how that property can be used. Like communism, the collective is regarded to be more important than the individual, and individual freedoms are subordinate to the interests of the collective.
In Capitalism Versus Socialism: What Does the Bible Have to Say? it is noted that both fascist and communist economic systems short-circuit the working of the Invisible Hand that coordinates production in a capitalist economy. As a consequence, they are incapable of matching the innovation and standard of living of a market-based economy. Also, the record of fascist and communist nations in the area of human rights has been abysmal—actually worse.