> For example, Capitalism is built on the philosophy of decentralized decision-making, whilst Communism is built on the philosophy of centralized decision-making.
I'm mainly referring to the process of price-setting. Rather than having some all-powerful body that determines the price, the price is determined by market participants. Too high and no one buys, too low and no one makes a profit. The market determing the price of goods is an example of decentralized decision-making.
This aspect of Capitalism is what allows for a more efficient allocation of scarce resources. The gov't doesn't tell corporations what goods to produce or who they should be sold to, instead corporations make those decisions based on prices set by the market. Where can they make the most profit? The answer to this question correlates (in theory and most of the time, in practice) with where the resources are most needed.
So in short, the market sets the price (decentralized decision-making) and the prices determine where resources are allocated.
Communism as implemented in the USSR lacked this aspect which is why the allocation of resources was less than ideal. e.g. Bread lines, two or more years to receive a car that was purchased, etc.
It should be noted that I'm mainly referring to Communism as seen in the USSR and China.
>The Chinese have their own way of implementing Capitalism which is largely informed by the legacy code from the philosophy of Communism.
I'm referring to the Mao Zedong era in which Communism was the dominant economic model. Following that, the development of "Special economic zones" which are "granted more free market-oriented economic policies" (https://en.wikipedia.org/wiki/Special_economic_zones_of_Chin...).
China still remains a communist country but is trying to integrate the Capitalist model whilst taking into account legacy code from a prior regime.
> For example, Capitalism is built on the philosophy of decentralized decision-making, whilst Communism is built on the philosophy of centralized decision-making.
I'm mainly referring to the process of price-setting. Rather than having some all-powerful body that determines the price, the price is determined by market participants. Too high and no one buys, too low and no one makes a profit. The market determing the price of goods is an example of decentralized decision-making.
This aspect of Capitalism is what allows for a more efficient allocation of scarce resources. The gov't doesn't tell corporations what goods to produce or who they should be sold to, instead corporations make those decisions based on prices set by the market. Where can they make the most profit? The answer to this question correlates (in theory and most of the time, in practice) with where the resources are most needed.
So in short, the market sets the price (decentralized decision-making) and the prices determine where resources are allocated.
Communism as implemented in the USSR lacked this aspect which is why the allocation of resources was less than ideal. e.g. Bread lines, two or more years to receive a car that was purchased, etc.
It should be noted that I'm mainly referring to Communism as seen in the USSR and China.
>The Chinese have their own way of implementing Capitalism which is largely informed by the legacy code from the philosophy of Communism.
I'm referring to the Mao Zedong era in which Communism was the dominant economic model. Following that, the development of "Special economic zones" which are "granted more free market-oriented economic policies" (https://en.wikipedia.org/wiki/Special_economic_zones_of_Chin...).
China still remains a communist country but is trying to integrate the Capitalist model whilst taking into account legacy code from a prior regime.