Russia Assignment 8
Name: ____________________________________
Economics is a word that means how people make money, conduct trade, pay bills, etc. People across
the world and throughout time have had different ideas on what economic system works best.
We have learned that the Russian people were led by a communist government from 1917 to just a few
years ago. What do communists believe? Why do they think that their form of government is better at helping
people than a capitalist economy, which is what we have?
We will look at two systems that are completely opposite of each other—communism and capitalism.
These will be discussed in their pure forms, and then we’ll read about variations on how the two governments
are practiced in different countries throughout the world.
COMMUNISM basically states that everybody should share. Communists believe that nobody should
own property, homes, and businesses. Communists believe that everybody should have the same amount of
money, and that people will be motivated by cooperation. That is the idea that everybody will work for the
good of their country, and thereby improve everybody’s life at the same time. Communist governments believe
that they should control all property and production, and then redistribute it equally back to the people.
CAPITALISM states that everybody has the economic freedom to make as much, or as little, money as
they want. Owning property, homes, and businesses is encouraged. Capitalism encourages economic growth
through competition. Capitalists believe that individuals are motivated to make profits, and that they will
reward the workers with higher wages. In a pure capitalistic economy, there would be no taxes paid to the
government.
That is how each system works in theory. But is that the way each system is practiced by the
governments who use it? The answer is no.
Communists discovered that many people were not motivated simply by working hard to benefit their
country. The people in communist countries soon discovered that it didn’t matter if they worked hard or not…
they were rewarded with the same wages. Soon, all the workers worked less and less. The products became
inferior, and food production fell off. Poland is a good example of communism in practice. Before World War
II, when Poland had a capitalistic economy, Polish farmers produced enough food to feed every Polish person,
and have enough over to export (sell) 40% of their produce to other countries. After World War II, when the
Poles were forced to accept a communist government, farm production fell apart. In the middle 1950s, Poland
was forced to import (buy from other countries) 40% of their food requirements. The Polish government tried
to motivate the farmers with slogans, but eventually turned to terrorism and force. Polish people discovered that
anything said or written that was critical of the communists would land them in jail or a grave.
Communist governments are still used by many countries in the world, including China (the largest
country in the world by population) and a close neighbor of ours, Cuba. Many people in these countries hate
communism and hope for a day when the can switch to capitalism. This is what happened to Russia and other
Eastern European counties during the last ten years.
Is capitalism a perfect system? Capitalism does provide for economic freedom, but it does not provide
for people who are unable or unwilling to take care of themselves. Every capitalistic country in the world has
homeless people living on the streets. Capitalism gives you freedom—freedom to succeed and freedom to fail.
The United States and other capitalist countries have recognized this, and have throughout history
started programs to take care of those people who fail in their economies. Welfare, unemployment, free public
education, and other social services are all funded with taxes. The idea of taxes is really anti-capitalistic.
Capitalism in theory states that everybody has the right to succeed and fail based on their own merits. Our
country and others have adopted policies to take care of those less fortunate. You wouldn’t be here reading this
without our citizens paying taxes, for example.
Capitalism is working fairly well for us. We have had over 220 years to practice capitalism, and with
modifications, have learned to provide goods and services for almost everybody. The Russians are trying to
start capitalism in their country. They have learned that is not an easy thing to get started. There is wide spread
corruption and a growing gap between rich people and poor people. Capitalism can not start overnight, because
it does not usually use violence to enforce it’s law—like communism does. The capitalistic countries of the
world are hoping that the Russians and all communist countries can give democracy and capitalism a chance to
grow and work.
Answer the following questions with a COM for communism, a CAP for capitalism, or a BOTH for both
of them.
1. ______ This system encourages people to make a profit.
2. _____ This system encourages people to work for the good of their country.
3. _____ This system uses terrorism to keep people from speaking out.
4. _____ This system has more homeless people.
5. _____ This system uses advertising to promote businesses.
6. _____ You can own a business in this system.
7. _____ This system is based on cooperation.
8. _____ This system is based on competition.
9. _____ The people who use this system believe it is the best system.
10._____ This system takes time to work properly.
11._____ This system is used in China.
12._____ This system is used by the United States.
13._____ This system might be preferred by poor people who see no chance of making money.
14. _____ This system is preferred by anybody who would like to get rich someday.
15._____ This system has been modified to include taxes.
16._____ This is the system that is preferred by you.
17-25. Explain your choice for #16.