Communism, or the command economy, is the opposite of free enterprise. Communism, simply put, is the belief in government control over the economy for the collective good of the people. This economic system has failed in just about every single country it has been implemented in. The command economy has three main aspects, unlike free enterprise. The three main aspects of communism are:


Collective Ownership

In a command economy, there is no private property. All property is held by the government for the sake of the collective whole of society. Thus, since one cannot accrue property, there is no incentive for producing under communism. All factories, trains, and farms are owned by the government. Such assets can be easily mismanaged in communism, as the government officials overseeing their use are appointed for political reasons, not for their ability to generate wealth.


“Communism possesses a language which every people can understand – its elements are hunger, envy, and death”- Heinrich Heine


Planned Production

Production is planned by a central government committee in this economic system. Since no government committee can know what every person wants and needs, this system of attempting to produce the optimal quantities of different goods and services is inefficient. Furthermore, no individual is able to invent, innovate, and improve. That is because there is no possible way for an individual to implement his or her ideas i.e. produce a good or service, unless the government wants to do so. Planned production prevents the human mind from bettering the world.



All wealth is allocated equally under communism. Because of this, no individuals will produce for their own sake; they must be convinced to produce for the sake of others. The problem with this is that commanding a person to act against his or her own rational self-interest is to command that person to act against human nature. Thus, individuals will not be willing to produce in large amounts.


The video below offers ten reasons for communism’s lack of success:



Free enterprise is a far more successful system than communism. Refer “Free Enterprise System Definition and Characteristics” to learn about how that differs from the command economy.