Fundamental Differences between Communism and Liberal Capitalism after WWII - Essay Example

Question 1 Introduction Liberal capitalism refers to an economic system where there are free markets and the means of production are owned by individuals and private organizations. In liberal capitalism, the government has the least amount of influence on how the industry and the market are run. However under this liberal capitalism, different people are at different social and economic classes. The central importance of liberal capitalism is the fact that everyone has the same opportunity as everyone else to make it economically. Liberal capitalism however, unlike communism is intertwined with democratic government systems. Communism on the other hand refers to the communal ownership of public resources. Under liberal capitalism, everyone has the same share of resources and there is expected to be as little government intervention as possible. Communism is geared towards placing the ownership of resources to the people where these resources are owned communally. There exists some fundamental differences between communism and liberal capitalism. The role of the individual The role of an individual changes depending on whether communism or liberal capitalism is at work. With liberal capitalism, each individual is independent and is expected to make their personal decisions. Under communism, each individual is supposed to contribute to the common good of the society by being a part of the production system. Distribution of wealth Under liberal capitalism, wealth is distributed unevenly unlike in communism where each individual in the society co-owns the wealth and the national resources. Under capitalism, each individual have their own wealth and this wealth is owned privately. Communists believe that each person’s needs are equal and equally important and in this regard argue that resources should be shared equally. At the same time, communists believe that by working together as a team, people can achieve more and this will lead to the welfare of the community as a whole. Liberal capitalists have different views on this. To begin with, a liberal capitalist society, it is believed when individual compete against each other, they will be the most productive and this will eventually work for the best of everyone. One of the best examples of liberal capitalism is probably the United States of America. Liberal capitalism in America has led to the inventions of so many technologies that have made the lives of people so much easier. In liberal capitalist economies such as the United States of America, individuals are rewarded for their contribution to the societies. This encourages people to work harder because they understand that the more they work, the more the reward will be. Communism however, is founded on a different attitude because individuals know that regardless of how hard they work, the results are the same. It can be might argued that liberal capitalism and communism are not entirely different because of a number of things; They are both geared towards making sure that the individual gets the best A close look at both communism and liberal capitalism indicates that they are both geared towards making sure that the individual achieves the best. Capitalism is for instance geared towards making sure that the individual is able to benefit the most from the labor of his hand. Communism on the other hand is geared They are both opposed to the increased interference by the government This is probably the epitome of both communism and liberal capitalism. In communism, the idea is to make sure that there is as little interference from the government as possible. In fact, under communism, the government is seen as redundant because the people are expected to be able to govern themselves. Liberal capitalism on the other hand does not necessarily out-rule the existence of a central government but nonetheless looks for a way to make sure that the government has minimal interference on the economic activities of individuals. Both liberal capitalism and communism have differences with socialism in that unlike socialist settings, liberal capitalism and communism do not leave the ownership of resources to the state. They are both never perfectly implemented Both liberal capitalism and communism are also similar in that they are never implemented in a perfect way. For instance, most nations which have tried to implement communism have failed mainly because the elite groups in that nations shy away from relinquishing power to the masses. Where efforts to install communism are made, the end result is authoritarian power and dictatorships. A good example is Russia where Lenin wanted to install this kind of social order and only succeeded in installing a dictatorship regime. The same case applies to liberal capitalism. Although liberal capitalism does not necessarily lead to dictatorship regimes, it is nonetheless never able to be implemented completely and perfectly. Liberal capitalism for instance is supposed to lead to economies which are not only free but also effective in creating resource balances, unfortunately, this never happens and where liberal capitalism is applied, it leads to economic issues as the majority of people end up in poor economic situations. The best example is the economic recession of 2008 in the USA which spread to the rest of the western developed world. Liberal capitalism led to so many people losing their economic fortune and to the economy being almost destroyed. It is clear that the strong argument against communist regimes in Russia during the cold war were not entirely valid. Winston Churchill was the pioneer of such argument, calling the differences between the capitalist West Europe and the communist East Europe an iron curtain (Fordham University, Para 2). Looking back at history may indicate that both liberal capitalism and communism had the same roots. These two ideologies were based on the need to have a system that gave as much power to the people and as little intervention from the government as possible. In fact, it can be said that communism was born of capitalism. This is because capitalism had seen to be failing in many areas. Capitalism, as much as it has its strengths also has its weaknesses. Winston Churchill saw the exponential growth of the communist regime as a great risk to Europe and argued that the only important thing to do would have been to create a United States of Europe (Churchill, 1946). Question 3 Introduction The World War II is considered one of the bloodiest wars that the world has witnessed. Apart from the many lives lost during the World War II, the nations which were involved also incurred lots of devastation in terms of the destruction of infrastructure and severed economic relationships between the opposing sides. After the War, there were a various efforts which were carried out. One of the most important efforts to reconstruct Europe is the Marshall Plan. The Marshall plan was the plan by the United States of America to help European nations rebuild their economies after the First World War. The plan was invented and promoted by George C. Marshall, a former military officer and the secretary of state at the time. The Marshall plan was the United States of America's response to the growing communism that was creeping into the European continent (Joseph, Postwar planning & reconstruction 2014). The USA government did not want the concepts communism to spread and therefore thought that by helping them to rebuild their economies faster and easily, it would help in preventing citizens of these nations from looking to communism as a better alternative to the western capitalism. Already, by this time, some nations in east Europe such as Czechoslovakia had already turned into communism and were already taking sides with the soviet government. This led to the United States feeling that if no interventions were made, most of Europe would turn to communism and this was definitely not in the best interest. The United States provided over thirteen billion US dollars in aid. This was received by most European nations both in the form of cash money as well as grants and other goods. The Marshall plan ran from 1948-1952 and played a major role in the construction of west European nations after the Second World War. This plan did not only help in the rebuilding west Europe, it was a much larger plan by the United States to assert its power and to make sure that it did not lose its political influence in the region. However even without the Marshall plan, most European nations, especially those in the West of Europe, such as France, Italy and the UK were doing so well in rebuilding their economies and their infrastructure. The speed at which the West Europe nations were able to rebuild their infrastructure was seen as nothing short of a miracle. This was because immediately after the war was over, the nations embarked on building the economies. The war was over and there was only one important thing to most of these nations; to rebuild their economy and return life to normal. Warsaw pact The Warsaw pact was a driving force behind the rebuilding of west Europe. Driven by the socialist movement from Russia, the Warsaw pact was a treaty between eastern and central European nations which was geared towards helping these nations to be stronger (History Para 2). While the agreement led to the development and the rebuilding of these nations in the eastern European countries, the west and especially United States of America saw a threat in it (Joseph, POLECON 160: The socialist alternative, Spring 2014). The United States of America in did not want communism to spread and it started a strategy to help in the rebuilding of Europe. However, in order to receive aid and grants from United States, European nations had to distance itself from the aid from Russia. Most of the aid given to Europe was given to the nations in the west of Europe, most of who were allied to the United States. The formation of the World Bank and the International Monetary fund also played a big role in the rebuilding of the west Europe (Martin 443). Desire to rebuild After the War, there was an innate desire by not only the authorities but also by the civilians to rebuild their nations. This strong desire was seen as a major contributing factor in making sure that the nations such as Britain, France and Spain were rebuilt in the shortest time. Other factors also played a very big role. One such factor was the Americanization of European economies. It was seen in terms of technology use in production (mass production), unrestrained consumerism which supported the economic growth by providing markets and thereby increasing employment opportunities etc (Joseph Bohling, Spring). John Maynard Keynes was also a very popular economist and most of his economic ideas, which had already been assimilated by the United Stated of America to deal with the great economic depression of the 1930s, were now in operation in most of Europe. These ideas (called Keynesianism) were supportive of democratic capitalism which became the epicenter of west European economies. Integration of economies With the formation of organizations such as IMF and the World Bank, it was now easy to integrate the West Europe economies. Integration of the economies was very important and played a major role in ensuring that west European nations were built. These organizations not only provided for development funds, but also helped in lifting up barriers of trade in the West Europe region, making trade possible across West European nations. Germany, despite being divided between the western capitalist democracy and the eastern socialist aristocracy, eventually came to its terms and rebuilding started. The bringing down of the Berlin war was a dawn of a new era where German started rebuilding. Money that would otherwise have been used to fund war was now used for construction of the Decolonization Decolonization was also another main factor which would determine how the European countries would be able to recover from the war. It is necessary to note that the Marshall plan played a major role in helping the reconstruction of West Europe (US Department of State: office of the Historian, Para 3). The Marshall plan however came with many restrictions and conditions which the European nations would have to meet (Grazia 347). Among them was the decolonization of African and Eastern nations. At the same time, the nations would have to pull down trade restriction against the United States of America. Prior to the Marshall plan, nations such as Britain had a trade preference with empire members, which meant that the they preferred goods from their member states than from other states such as the unites states of America. This trade preference was considered a major supporting factor for the economy. However, these nations needed help from America than anything else and so they had to accept the conditions and take the aid. This means that the nations had to both implement American capitalism as well as open up free trade with the USA. It is crucial to note that USA had selfish economic interests in the West Europe region because this region acted as a major market for tits goods. If the USA failed to support this region in the bid for reconstruction, it would mean two main things. First, that the European region would most likely sink economically and therefore the United States would lose its market. It would also mean that west Europe would be tempted to turn to socialism which would mean that the Soviet Union would gain more power in world politics. The Soviet Union being America’s number one enemy, United States of America would not allow that to happen. Works Cited Bohling, Joseph Polecon 160: Postwar planning & reconstruction. Lecture Notes Spring 2014.Print. Bohling, Joseph Polecon 160: The socialist alternative, Spring 2014. Lecture Notes, Spring 2014.Print. Bohling, Joseph, PolCon 160: The “Americanization” of Europe? Lecture Notes.. 2014Spring. 2014.Print Churchaill, Winston. "the United Stats of Europe Speecj, September 19, ." NA. Wars Aftermath: Plans for Peace, Cold War and Reconstrction. New York, NY: NA, 1946. 58. Fordham University. Modern History Sourcebook: Winston S. Churchill: "Iron Curtain Speech", March 5, 1946 . NA 2014. 05 April 2014 . Grazia, Victoria. "Irresistible Empire : America's Advance Through Twentieth-Century." Grazia, Victoria. The Consumer-Citizens- How Europeans Traded Rights for Goods. Cambridge, MA.: Harvard University Press, 2005. Print History. Formation of NATO and Warsaw Pact. 2014. 05 April 2014 . Martin, Jamie. "Were we bullied?" Benn, Steil. The Battle of Bretton Woods: John Maynard Keynes,Harry Dexter White and the Making of a New World Order. Princeton: Princeton, 2013. pp. 449 . US Department of State: office of the Historian. North Atlantic Treaty Organization (NATO), 1949. NA. 05 April 2014 . Read More