5 Examples of Communist Economies

5 Examples of Communist Economies

For centuries, humanity has been trying to come up with the ideal structure or methodology to successfully run a community, in which every individual agrees with the governing body and vice versa. While all the ideologies and planning appear flawless on paper, these begin to crumble as soon as they are implemented in the real world. Although a majority of the world practice capitalism, some countries chose to become communist economies.

What is a Communist Economy?

karl marx friedrich engels statue in Berlin
Karl Marx (Foreground) and Friedrich Engels (Background) statue in Berlin, Germany

Simply, an economy that is based on the communist ideology is referred to as a communist economy. Communism is an ideology in which the political and economic agenda of a ruling body is to establish a community in which classes of individuals are disregarded, in theory, promoting equality. Moreover, each individual is paid according to their ability and need. In a communist economy, factors of production, i.e., labor, land, and entrepreneurship, are owned by a single entity, which is usually the government. This ideology was developed by Karl Marx, a German philosopher. According to Marx and his co-author, Friedrich Engels, communism would have provided a solution for the exploitation of labor and would have freed individuals from working in sectors that they don’t wish to work in. Theoretically, by implementing advanced manufacturing technology, working hours would reduce, and once people begin to work on what they love, they would work restlessly, resulting in a better economy. Karl Marx laid out 10 planks or rules of communism that are:

  • Property cannot be owned privately, and government can issue it to anyone at any time.
  • Taxes must be dependent on an individual’s income, i.e., the rich must be taxed, likewise, the poor should be taxed less.
  • If a person passes away, their possessions become the property of the government, which is then distributed in the community.
  • If a person leaves the country or stands against it, the previous rule applies.
  • There must be only one bank that is regulated by the government.
  • Mailing and transportation services are also controlled by the government.
  • All land is valuable. Farming must be conducted on good soil while factories are to be built on badlands.
  • Each individual must work, especially in agriculture.
  • Allocation of people, factories, and farms in different parts of the country can happen at any time to maintain an equal concentration of people and employment.
  • Education must be free-for-all children, and children are prohibited from labor, especially in factories.

    Examples of Communist Economies

    1. China

    China Mao Zedang
    A portrait of Chairman Mao Zedong

    Presently, China is the biggest example of a communist economy. Interestingly, China became a communist country in the mid-1900s. This occurred because previously, the Chinese, particularly the lower class, were suffering because of constant invasions from foreign nations. In 1911, a rebellion against the authority took place in Wuchang. Rebellions similar to this had taken place before as well; however, this time, the army joined the uprising. While they overthrew the authorities at the time, it only lasted for a short duration, and by 1925, China was divided into different states governed by warlords. To change the shape of the nation both politically and economically, the Chinese Communist Party was formed in the 1930s. At the same time, Guomindang, another political party, was formed. Initially, both parties worked together; however, as China was free from foreign invasions, both parties turned against each other, leading to the Chinese Communist Revolution. While the Guodimang party promoted democracy, the Chinese Communist Party, led by Mao Zedong favored communism. Ultimately, communism was chosen by the public. Mao Zedong introduced two policies, namely the Great Leap Forward and the Cultural Revolution, and both of these flopped. The former policy was set in motion to accelerate the economic growth of China. It forced people to work on farms for extended periods, to boost food production, and in factories, to develop products rapidly; however, there was a huge drawback. The redistribution of workers was random, meaning people working in factories had no idea about the operations or what they were supposed to do. Unsurprisingly, it failed and claimed the lives of approximately 50 million people. Following this, Mao Zedong launched the Cultural Revolution. It was aimed at eradicating non-revolutionaries, resulting in the death of 1.25 million people and the extinction of Chinese heritage. Finally, Mao passed away in 1976, and the power came into the hands of Deng Xiaoping. Deng introduced modernization that worked remarkably for China, as he designed each aspect of the policy himself. Still, some citizens wanted democracy, and protests across the country started to happen, which lead to the massacre at Tiananmen Square in 1989, as the military was ordered to establish order. Despite all the ups and down in the communist economy of China, it is a superpower with a high gross domestic product value. The present communism in China restricts freedom of speech and even monitors the internet usage of each citizen.

    GDP: USD 14 Trillion

    2. Cuba

    Che Guevara Wall Painting
    A woman walking in front of the wall painting of Che Guevara in Havana with the text meaning “Ever onward to victory”

    The only ruling party in the Republic of Cuba is the Communist Party of Cuba. This island country has been subject to many invasions in the past. In the 19th century, it was ruled by the Spanish; however, Carlos Manuel de Céspedes led a rebellion for independence in the mid-1800s. Originally, this conflict was not planned to stretch for prolonged periods, but it lasted for a decade and was called the Ten Year’s War. At the same time, America and Spain were waging war against each other. Fortunately, this war finally came to a stop with a peace treaty between the mentioned countries in 1898, resulting in America taking control of Cuba. Finally, in 1902, Cuba gained independence from the United States; however, the US was still legally allowed to intervene in Cuban affairs and finances. Gerardo Machado was elected the president of Cuba in 1924. He invested heavily in tourism to uplift the economy. While it worked in the beginning, the crash of Wall Street led to the downfall of Machado. Citizens, especially students, opposed him, and he was ultimately exiled from the country. In 1940, Fulgencio Batista became the president of Cuba. During his rule, the economy of Cuba saw a drastic downfall with unemployment and inflation. Fidel Castro along with his brother, Raúl Castro, launched The Movement against Batista by military means. Their attacks failed, and they were captured; however, Fidel Castro gave a speech that led citizens to see the unconstitutional ways of Batista. Fortunately, both of them were saved and moved to Mexico, where they met Ernest ‘Che’ Guevara. Interestingly, during Guevara’s university years, he stayed away from politics and instead preferred riding his motorcycle for long adventures. During his travels, he witnessed the degrading life quality and poverty in South America, and to him, it was because of the failing capitalist system. Although he became a doctor in 1953, he threw away his career just two months later to fight for people. In 1957, Che Guevara, Fidel Castro, Raúl Castro, along with 82 men, reached the South of Cuba. At the time, other rebellions were already taking place in Cuba which led to extensive bloodshed. Seeing such events, Americans, who have been supporting Batista, decided to side with rebellion groups. Finally, Batista was exiled in 1958. At this time, the United States had banned trade with Cuba, and even seize the assets of Cubans in the US. By the 1960s, the USSR had established a stronghold in Cuba and even deployed numerous nuclear missiles. Unsurprisingly, the US government was not happy about this movement, and both countries were seriously considering nuclear war for 13 days. This later came to be known as the Cuban Missile Crisis. This led to the country following the economic model of the USSR, i.e., communism. Although there have been many tough times since the implementation of communism in Cuba, it led the country to become what it is today.

    GDP: USD 108 Billion

    3. Laos

    Laos Pathet Lao Propaganda Poster
    The Pathet Lao’s propaganda poster

    The only landlocked country in Southeast Asia is a communist economy. Similar to Cuba, Laos has been a subject of wars and invasions from foreign powers, but unlike Cuba because of the geographical location, it was an ideal ground for business, and Laos became a prosperous nation because of the gold and ivory trade. Interestingly, the French were a huge ruling power in Laos during the 19th century. When the kingdom of Lax Xang split into three kingdoms, out of which three territories were under the French in 1893, that became Laos. While the Japanese also gained control of the nation during the Second World War, it became independent in 1953 under the rule of Sisavang Vong; however, a civil war broke out shortly afterward. This civil war was between the royalists who supported the king and those who were in the favor of the communist party, Pathet Lao, that opposed the king. The war lasted for nearly two decades. This was also during the period of the Vietnamese war, therefore, constant bombardment from the US airforce wreaked havoc on the southern hemisphere of the country, as Vietnamese soldiers were hiding there. Finally, the civil war was resolved in 1975, with Pathet Lao gaining control. Unsurprisingly, the Soviet Union supported the country. Royalists fled to Thailand during that time and the country came under the command of Kaysone Phomvihane. He renames the country to Lao People’s Democratic Republic. In 1977, Laos signed a peace treaty with Vietnam. Two years after that, Vietnam asked Laos to end relations with China, making it isolated from the largest trade market. Despite this, it has become one of the fastest-growing economies in Southeast Asia. Laos has also built four railway networks that connect it to the neighboring nations.

    GDP: USD 19 Billion

    4. Vietnam

    Ho Chi Minh
    A photograph of Ho Chi Minh

    The Socialist Republic of Vietnam was also under the rule of the French in the 19th century. Unsurprisingly, the Vietnamese opposed the colonization by the French, as they had already been ruled by the Chinese previously. In 1911, a revolutionary, Ho Chi Minh was exiled from Vietnam for 30 years. During this time, he read the writings of Vladimir Lenin and became a communist who wished for an independent Vietnam. In 1919, Woodrow Wilson, the 28th President of the United States, visited Paris to request the independence of the colonized nation, and during this time, Ho Chi Minh stated his desires to Wilson’s secretary, but to no avail. As the Second World War began, Japan began invading Vietnam, and Ho Chi Minh returned to Vietnam to free his country with rebellion. Japanese had already attacked Pearl Harbor, and Ho Chi Minh contacted the US government for aid, and unsurprisingly, they agreed, supplying weaponry to the group. After the dreadful nuclear attack on Japan, its surrender was imminent. Ho Chi Minh asked citizens to take control of the country; however, another event sealed the fate of this country. The Cold War had begun. As the USSR gained control of most of Eastern Europe, the French stated that if its colonized states became independent, they will join the Soviet Union. As one can imagine, it led to almost a 7-year-long war between France and Vietnam that ended with Vietnam winning, and the French leaving the country after a hundred-year-long rule in 1953. Following this, the country was divided into North and South Vietnam, where communist and capitalist economies were established, respectively. Although it was an independent nation now, it didn’t last long. John F. Kennedy was being pressurized by government officials to stop communism in Vietnam and was even accused of being too lenient. He gave in, and he started sending troops along with fleets of weaponry and vehicles to Vietnam. Meanwhile, South Vietnam had become a dictatorship because of the corruption and greed of the president, Ngô Đình Diệm. This caused great turmoil and suffering, and ultimately, the assassination of Ngô Đình Diệm by the military. After the assassination of John F. Kennedy, the power went to Lyndon B. Johnson, and this was when American soldiers were ordered to begin bombing the oil facilities and crops in Vietnam. Unsurprisingly, the Vietnamese responded by attacking and killing numerous American soldiers. Minister of Defence advised Lyndon B. Johnson to negotiate and come to a mutual ground, but he chose war. As we all know, history was engraved in the flesh of more than 50,000 American soldiers and over 200,000 Vietnamese soldiers. Seeing such devastation troops were pulled from the grounds. At this time, Richard Nixon was elected as the president, and the Americans were enraged upon learning the reality of American soldiers killing innocent Vietnamese. Despite the anti-war campaigns, Nixon bombed Hanoi, resulting in the death of over 100,000 Vietnamese. With such dreadful events, Vietnam surrendered. Despite seeing such dark times, even after the war, Vietnam rose from the ground up. Compared to other communist economies, say China, the Vietnamese government gives its citizen a little more freedom in terms of social media and freedom of speech.

    GDP: USD 275 Billion

    5. North Korea

    Kim Il Sung Propaganda Poster
    Kim Il Sung on a North Korean propaganda poster

    Korea is divided into two countries, North and South Korea. While South Korea is a capitalist nation, North Korea is strictly a communist economy, one can even refer it to as a dictatorship. Like many other Southeast Asia countries, it was overtaken by the Japanese. In 1919, a revolt against the Japanese government was initiated. This lasted for 3 years; however, nothing much came out of it. Interestingly, the Korean Liberation Army was created in China, and it aimed to remove the Japanese from the nation; however, the US dropped nuclear bombs on Japan before this army could fight the Japanese. The Soviet Union was the first nation to enter Korea after Japan departed from it. Interestingly, the USSR was perceived as the liberator in Korea. In 1945, seeing the Soviet Union’s activity in Korea, the US sent two generals to negotiate with the USSR, resulting in the division of Korea. Soviets got a hold of North Korea, and South Korea fell under the control of the United States. This led to increasing tension between North Korea and South Korea, resulting in the Korean War that killed nearly 1.2 million people. In 1947, the United Nations decided to eliminate the power struggle by introducing an independent election in each country. While the US agreed, the Soviet Union denied it. South Korea became an independent nation after the elections. As for North Korea, Kim Il Sung gained control over it. As we all know, the control stayed in the Sung family with Kim Jong-un, the present leader. North Korea’s economy is mysterious, to say the least, as Kim Jong-un is known to publish fake statistics. Moreover, journalists claim that a majority of North Koreans are living under the poverty line.

    GDP: USD 28 Billion

    The Soviet Union

    Joseph Stalin Propaganda
    Joseph Stalin’s propaganda poster

    No communist economy can be talked about without mentioning the Union of Soviet Socialist Republics. Before the moment of communism in Russia, it had been ruled by the Romanov family for 300 years, and the leader was referred to as the Tsar. Moreover, Tsar was considered to have received power from God himself. Alexander III can be considered the true last Tsar of Russia as he maintained the mentioned persona; however, his son, Nicholas II, was made the Tsar after the early death of his father in 1894. With the arrival of the 20th century, Russia went to war against Japan, which they lost. This loss tarnished the image of the Tsar, Nicholas II, in the eyes of Russians, as Asian countries were considered inferior in terms of military power. Following this, Nicholas II’s poor war strategies led to the death of 3 million Russians during the First World War. The public was furious, resulting in the resignation of Nicholas II as the Tsar. While many forms of groups rose to power after this, none were able to establish themselves as the true governing body of Russia. Vladimir Ilyich Ulyanov (Lenin) returned to Russia after his exile from the time of Alexander III. Lenin’s older brother was killed under the order of Alexander III, leading to his anger toward the Tsardom. Lenin ordered the killing of the remaining believers of the Tsardom, and this event is known as the Red Terror. In doing so, he gained control of Russia; however, he became severely ill and knew he would pass away soon. Before his death, he designed a layout for the future of Russia, which is known as the Lenin’s Testament. Finally, Joseph Stalin took the control of the nation. Russia became the first country to implement communism. Stalin laid out a 5-year plan for the future for the economic growth of the nation. However, communism had never been tested before, and it was a new concept. This led to employers doing the bare minimum, resulting in the country producing just enough to survive, but the authorities put a strong emphasis on producing vast amounts of tools. This idea was useless earlier; however, it proved tremendously beneficial during the second World War. The USSR won most wars because of the sheer number of weaponry. Despite all this, the USSR dissolved, and the birthplace of communism ceased to exist in 1991.

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