{"id":108,"date":"2014-09-04T04:25:59","date_gmt":"2014-09-04T04:25:59","guid":{"rendered":"https:\/\/courses.candelalearning.com\/internationalbusiness1xmaster\/?post_type=chapter&#038;p=108"},"modified":"2015-02-17T19:48:09","modified_gmt":"2015-02-17T19:48:09","slug":"reading-the-disadvantages-of-communism","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/chapter\/reading-the-disadvantages-of-communism\/","title":{"raw":"Reading:  The Disadvantages of Communism","rendered":"Reading:  The Disadvantages of Communism"},"content":{"raw":"<div>\r\n<div>\r\n<h2>Businesses under Communist system have very strict limitations as to what they can and cannot do, which can hamper productivity and innovation.<\/h2>\r\n<\/div>\r\n<div>\r\n<div class=\"bcc-box bcc-success\">\r\n<h3>KEY\u00a0Points<\/h3>\r\n<section>\r\n<div data-type=\"note\">\r\n<ul>\r\n\t<li>In a Communist system, the central authority dictates the means and quantity of production, and places strict rules on businesses.<\/li>\r\n\t<li>Since there is no competition amongst firms, each is given the same amount of money and each worker is paid the same, with the same expectations of each.<\/li>\r\n\t<li>All businesses are ultimately owned by the government.<\/li>\r\n\t<li>Populations tend to be treated homogeneously, meaning that common goals or sets of rules will not apply to different segments of the population and community.<\/li>\r\n\t<li>Without a\u00a0price mechanism, supply and demand are difficult to balance perfectly over time.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/section><\/div>\r\n<\/div>\r\n<\/div>\r\n<div><\/div>\r\n<div>\r\n<div>\r\n<h4><strong>Term<\/strong><\/h4>\r\n<ul>\r\n\t<li><em>Price mechanism:<\/em>\u00a0 An economic term that refers to the buyers and sellers who negotiate prices of goods or services depending on demand and supply. A price mechanism or market-based mechanism refers to a wide variety of ways to match up buyers and sellers through price rationing.<\/li>\r\n<\/ul>\r\n<div>\r\n<h4><\/h4>\r\n<h4><strong>Example<\/strong><\/h4>\r\n<ul>\r\n\t<li>Ho Chi Minh raised a guerrilla army in Vietnam, promising them a Utopian communist future of rule by the people and a communal country. However, what transpired was a nation ruled by corrupt Party officials, with no\u00a0rights\u00a0or civil liberty. The theory peddled by Ho Chi Minh was far removed from the practice of Communism once he was successfully elected. There are many other examples of how Communism has failed the people of a country. Whether this is down simply to corrupt leaders, or to a deeper flaw in the nature of Communism is a subject debated by many scholars .<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<div><\/div>\r\n<div>\r\n<h4><strong>Disadvantages of Communism<\/strong><\/h4>\r\nThe economic and political system of Communism effectively dictates what can and cannot be done in the realm of business. There are defined limitations for the amount a business can produce and how much money it can earn.\r\n\r\nIn addition to directly controlling the means of production, Communism places strict rules as to how businesses operate in such a way that a classless society is born. No matter what field a business specializes in, the same amount of funds will be allocated to each, and each worker will receive the same amount of money. This can cause emotional unrest between workers who wish to be specially recognized for their work. It can serve to create uncomfortable conditions for workers in a society without rank or varying specialty. Finally, it can be stifling to entrepreneurial spirit, which is key to a country's economic growth and development. The U.S., a capitalistic nation, has greatly benefited from that small business and entrepreneurial atmosphere, a backdrop for the American dream.\r\n\r\nMore specifically, in Communism:\r\n<ul>\r\n\t<li>The government owns all the businesses and properties (the means of production).<\/li>\r\n\t<li>There is no freedom of speech.<\/li>\r\n\t<li>Large or geographically-broad populations tend to be diverse, making it difficult to maintain a common goal or set of rules for shared effort andresources.<\/li>\r\n\t<li>Central planning is difficult to achieve.<\/li>\r\n\t<li>Consumers needs are not taken into consideration.<\/li>\r\n\t<li>Productivity\u00a0and efficiency are difficult to achieve without\u00a0profit\u00a0motive for the workers.<\/li>\r\n\t<li>It is difficult to achieve internal balances between supply and demand without a price mechanism.<\/li>\r\n<\/ul>\r\n<figure id=\"f728d\"><img src=\"https:\/\/figures.boundless.com\/16618\/full\/8283191601-f074b350c5-h.jpeg\" alt=\"\" \/>\r\n<div>The Kremlin<\/div>\r\n<figcaption>Only the government has a say in production planning under a Communist system.<\/figcaption><\/figure><\/div>\r\n<\/div>\r\n<div>\r\n<h4><\/h4>\r\n<h3><\/h3>\r\n<div class=\"bcc-box bcc-success\"><section id=\"glossary\">\r\n<h3>GLOSSARY<\/h3>\r\n<div data-type=\"definition\">\r\n<div>\r\n\r\n<strong>Productivity<\/strong>\r\n\r\nA measure of the efficiency of production and is defined as total output per one unit of a total input.\u00a0The rate at which goods or services are produced by a standard population of workers.\u00a0A ratio of production output to what is required to produce it (inputs).\u00a0The state of being productive, fertile, or efficient. The rate at which products and services are produced relative to a particular workforce.\r\n<div><\/div>\r\n<\/div>\r\n<div>\r\n\r\n<strong>Profits\u00a0\u00a0<\/strong>\r\n\r\nCollective form of profit.\r\n<div><\/div>\r\n<\/div>\r\n<div>\r\n\r\n<strong>Resource<\/strong>\r\n\r\nSomething that one uses to achieve an objective, for example a raw material or an employee.\r\n<div><\/div>\r\n<\/div>\r\n<div>\r\n\r\n<strong>Right<\/strong>\r\n\r\nA legal or moral entitlement.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/section><\/div>\r\n<\/div>","rendered":"<div>\n<div>\n<h2>Businesses under Communist system have very strict limitations as to what they can and cannot do, which can hamper productivity and innovation.<\/h2>\n<\/div>\n<div>\n<div class=\"bcc-box bcc-success\">\n<h3>KEY\u00a0Points<\/h3>\n<section>\n<div data-type=\"note\">\n<ul>\n<li>In a Communist system, the central authority dictates the means and quantity of production, and places strict rules on businesses.<\/li>\n<li>Since there is no competition amongst firms, each is given the same amount of money and each worker is paid the same, with the same expectations of each.<\/li>\n<li>All businesses are ultimately owned by the government.<\/li>\n<li>Populations tend to be treated homogeneously, meaning that common goals or sets of rules will not apply to different segments of the population and community.<\/li>\n<li>Without a\u00a0price mechanism, supply and demand are difficult to balance perfectly over time.<\/li>\n<\/ul>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<div><\/div>\n<div>\n<div>\n<h4><strong>Term<\/strong><\/h4>\n<ul>\n<li><em>Price mechanism:<\/em>\u00a0 An economic term that refers to the buyers and sellers who negotiate prices of goods or services depending on demand and supply. A price mechanism or market-based mechanism refers to a wide variety of ways to match up buyers and sellers through price rationing.<\/li>\n<\/ul>\n<div>\n<h4><\/h4>\n<h4><strong>Example<\/strong><\/h4>\n<ul>\n<li>Ho Chi Minh raised a guerrilla army in Vietnam, promising them a Utopian communist future of rule by the people and a communal country. However, what transpired was a nation ruled by corrupt Party officials, with no\u00a0rights\u00a0or civil liberty. The theory peddled by Ho Chi Minh was far removed from the practice of Communism once he was successfully elected. There are many other examples of how Communism has failed the people of a country. Whether this is down simply to corrupt leaders, or to a deeper flaw in the nature of Communism is a subject debated by many scholars .<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<div><\/div>\n<div>\n<h4><strong>Disadvantages of Communism<\/strong><\/h4>\n<p>The economic and political system of Communism effectively dictates what can and cannot be done in the realm of business. There are defined limitations for the amount a business can produce and how much money it can earn.<\/p>\n<p>In addition to directly controlling the means of production, Communism places strict rules as to how businesses operate in such a way that a classless society is born. No matter what field a business specializes in, the same amount of funds will be allocated to each, and each worker will receive the same amount of money. This can cause emotional unrest between workers who wish to be specially recognized for their work. It can serve to create uncomfortable conditions for workers in a society without rank or varying specialty. Finally, it can be stifling to entrepreneurial spirit, which is key to a country&#8217;s economic growth and development. The U.S., a capitalistic nation, has greatly benefited from that small business and entrepreneurial atmosphere, a backdrop for the American dream.<\/p>\n<p>More specifically, in Communism:<\/p>\n<ul>\n<li>The government owns all the businesses and properties (the means of production).<\/li>\n<li>There is no freedom of speech.<\/li>\n<li>Large or geographically-broad populations tend to be diverse, making it difficult to maintain a common goal or set of rules for shared effort andresources.<\/li>\n<li>Central planning is difficult to achieve.<\/li>\n<li>Consumers needs are not taken into consideration.<\/li>\n<li>Productivity\u00a0and efficiency are difficult to achieve without\u00a0profit\u00a0motive for the workers.<\/li>\n<li>It is difficult to achieve internal balances between supply and demand without a price mechanism.<\/li>\n<\/ul>\n<figure id=\"f728d\"><img decoding=\"async\" src=\"https:\/\/figures.boundless.com\/16618\/full\/8283191601-f074b350c5-h.jpeg\" alt=\"\" \/><\/p>\n<div>The Kremlin<\/div><figcaption>Only the government has a say in production planning under a Communist system.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<div>\n<h4><\/h4>\n<h3><\/h3>\n<div class=\"bcc-box bcc-success\">\n<section id=\"glossary\">\n<h3>GLOSSARY<\/h3>\n<div data-type=\"definition\">\n<div>\n<p><strong>Productivity<\/strong><\/p>\n<p>A measure of the efficiency of production and is defined as total output per one unit of a total input.\u00a0The rate at which goods or services are produced by a standard population of workers.\u00a0A ratio of production output to what is required to produce it (inputs).\u00a0The state of being productive, fertile, or efficient. The rate at which products and services are produced relative to a particular workforce.<\/p>\n<div><\/div>\n<\/div>\n<div>\n<p><strong>Profits\u00a0\u00a0<\/strong><\/p>\n<p>Collective form of profit.<\/p>\n<div><\/div>\n<\/div>\n<div>\n<p><strong>Resource<\/strong><\/p>\n<p>Something that one uses to achieve an objective, for example a raw material or an employee.<\/p>\n<div><\/div>\n<\/div>\n<div>\n<p><strong>Right<\/strong><\/p>\n<p>A legal or moral entitlement.<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-108\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Boundless Business. <strong>Authored by<\/strong>: Boundless. <strong>Provided by<\/strong>: Boundless. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.boundless.com\/business\/\">https:\/\/www.boundless.com\/business\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Image of Kremlin. <strong>Authored by<\/strong>: Valerii Tkachenko. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/commons.wikimedia.org\/wiki\/File:Kremlin_Palace_reflection_Moscow_cityscape_%288283191601%29.jpg\">http:\/\/commons.wikimedia.org\/wiki\/File:Kremlin_Palace_reflection_Moscow_cityscape_%288283191601%29.jpg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":9,"menu_order":10,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Boundless Business\",\"author\":\"Boundless\",\"organization\":\"Boundless\",\"url\":\"https:\/\/www.boundless.com\/business\/\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image of Kremlin\",\"author\":\"Valerii Tkachenko\",\"organization\":\"\",\"url\":\"http:\/\/commons.wikimedia.org\/wiki\/File:Kremlin_Palace_reflection_Moscow_cityscape_%288283191601%29.jpg\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-108","chapter","type-chapter","status-publish","hentry"],"part":71,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapters\/108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":9,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapters\/108\/revisions"}],"predecessor-version":[{"id":793,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapters\/108\/revisions\/793"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/parts\/71"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapters\/108\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/wp\/v2\/media?parent=108"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=108"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/wp\/v2\/contributor?post=108"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-fmcc-internationalbusiness\/wp-json\/wp\/v2\/license?post=108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}