Disadvantages of Communism
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.
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'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.
More specifically, in Communism:
- The government owns all the businesses and properties (the means of production).
- There is no freedom of speech.
- Large or geographically-broad populations tend to be diverse, making it difficult to maintain a common goal or set of rules for shared effort and resources.
- Central planning is difficult to achieve.
- Consumers' needs are not taken into consideration.
- Productivity and efficiency are difficult to achieve without profit motive for the workers.
- It is difficult to achieve internal balances between supply and demand without a price mechanism.
The Kremlin
Only the government has a say in production planning under a Communist system.