accounting

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The economic system

Capitalism is an economic system and not a political system which allows each member of society to seeks behind his own interests in order to get more income which means that the individual in capitalist system is free to choose the type of activity that he wants and is free to choose the investment and consumption. In other word we can say that it is an economic system that depends on the concept of the freedom where the means of production are owned privately or owned by companies so that the distribution, production, price setting is governed by supply and demand and owners are able to retain or re-invested profits.

According to historical view the capitalism is the Product and the result of industrial development and a great shift from the means of production lagging in feudal system to the means of production advanced in the Industrial Revolution, so the capitalism emerged as one of the consequences of this Industrial Revolution. With the development of the capitalist economy from the initial stages of the stage of commercial competition and economic to the middle stage which is monopoly up to the upper stage which is imperialism where this mean it is foreign policy of some of the advanced capitalist countries that intended to subdue the nations and countries with weak evolution for their benefits.

In terms of example the majority of the countries in the world such as United States, Canada , Mexico, all countries of the European Union, Australia, Japan, India, Egypt, Tunisia, New Zealand, South Africa, Switzerland, , Brazil, etc. .). "Even some countries which in-name follow different economic systems (such as China, claiming to have a communist economy with Chinese characteristics) are capitalist (i.e. have most of the output coming from industries in private property trading and setting prices on a free market by the laws of supply and demand, and have a legal framework geared to protecting and encouraging such a system of production)" [1]. For an example in general term you can imagine that you owned two cows, then you sell the cow and buy a bull, then grow the herd and sell it and so on. In terms of people the most famous one is an American business magnate Donald Trumpwho exploited the advantages of the free market system by purchasing the properties at low prices and re-sale it when it going up. In terms of country the most important one is the United States. The capitalist systems in the U.S according to the social life divide into different layers which are the capitalist class, upper middle class,Lower middle class, working class and underprivileged class. At the level of wealth the capitalist class is distinct from other classes in terms of Stocks, real estate and wage or annual income because half of the wage and property located in the possession of a few individuals who constitute one percent of the population. The Statistics from the U.S. government in recent decades of the twentieth century shows that there are more than six hundred thousand millionaires, including twenty-six individuals who have more than a billion dollars. At the level of Politics the capitalist class can do great job in the movement to vote and be elected to political candidates, while the others classes get disregard the direction of the voting process the presidential and parliamentary. At the educational level the capitalist class gets higher level of cultural and educational than other classes.

On the other hand the communism is doctrine which is designed to control the society and it is resources for the benefit of members of the community are equally or it is doctrine designed to eliminate the capitalism system in order to create a society where it is members are equal in rights.

Communism emerged in Russia in 1903 when the revolution started between the working classes in capitalist societies. The communist countries called Socialist countries, where the socialism means it is Social system free from personal property which means participation of small numbers or huge number of people for sharing the wealth of the country.

The spiritual father of the theory of communism was Karl Marx and the most important of the incursion into the theory of Communism, and contributed to the literature and the application was Vladimir Lenin. It comes after the socialist period, where the socialist period has gone across two fundamental periods which are perfect stage of socialism which can call also the first communist and Scientific Socialism during the nineteenth century.

There is no difference between the communism and socialism because the socialism aimed to the communism, but there is a difference in the scientific side, where the communism sees that the person consumes as much as what fills all his needs, while the socialism sees that the person consumes as much as his works (the one that not work will not eat).

In terms of example there are few countries the located under the communism which are North Korea, Laos, Cuba, Vietnam and China (which tried to be capitalism, but still it is has a communist economy with Chinese characteristics). ]. For an example in general term you can imagine that you owned two cows and the government take both cows and give you some milk.


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