One of my previous post from different thread.

One main reason why Communism ideology fails is the way it handles the economic of a country. It assumes that the economic of a country is finite. Don't get me wrong, finite here doesn't mean that the regime leader comes out with a GDP of says 1Billion for year 2010 for that country.

"Finite" means the economic is determined by the regime leader and his team in a hierarchy structure. A team does infrastructure, B team food, C team medical, D team weapon....etc. The nation's wealth is determined by the top tier of the hierarchy. The job creation, the number of companies are all are predetermined by the leader. Food is distributed to each citizen in the form of coupon (like North Korea). The country will need to shield the entire nation from the outside world (capitalism) in order to maintain the ideology.

On the other hand, why capitalism is a better model? Because it started with the assumption that economic of a country is theoretically infinite.

Looking back at the history of western economy capitalism model, prior to 17th century, there were kings, dukes, rich man or central planner who control the entire piece of lands and everything (includes everyone) in it.

There was one Scotsman who proposed a new model called "Invisible Hand". He argued that when each person pursues his own line of work, the general population is far better off that it is when the king or the central planner runs the economic show and dictates who does and gets what (e.g. cloth, hat, vegetable). He argued that if millions of individuals making and selling whatever they pleased, and going off in all directions at once, could create an orderly society in which everyone had clothes, food and a roof over their heads. What if 99% of the people decided to make hats, and only 1% decided to grow vegetables? The country would be flooded with hats, and there would be nothing to eat. But this is where the Invisible Hand comes to the rescue.

There wasn't really an Invisible Hand, of course. It is a metaphor. For instance, if too many hat makers made too many hats, hats would pile up in the market, forcing the hat sellers to lower the price. Lower price for hats would drive some hat makers out of the hat business and into a more profitable line of work, such as vegetable farming. Eventually, there would be just enough vegetable farmers and hats makers to make the right amount of vegetables and hats.

The "invisible hand" method proposed is the basics of how a free market works, and they still hold true today. He was referring to supply and demand kept goods and services in balance. His idea seems obvious today, but in 17th century, it was a novel idea by one human being when such ideology was never heard and never implemented before.

His name was Adam Smith aka The Father of Modern Economics. And his idea was written down in the book called "The Wealth of Nations".

If a country wants to be prosper, it needs to adopt "free market" concept where the wealth generated is theoretically infinite. In summary, bottom up (capitalism) is a better model then top down (communism) from economical perspective.

One can still argues that there are pro and con with "free market" capitalism concept. I agree. Look at Tulip bubble, Automotive bubble, .Com bubble and lately property bubble in Dubai. Again, as Adam has mentioned, this is how the free market work in cyclic order, where price goes up will eventually comes down and this cycle will continues......just like the hats maker and the vegetables farmer.....

Maybe it was me that did not clarify the word finite enough. Assume there is one hundred people in a country that adopts communism ideology.

The leader group 25 pal to plant vegi, 25 pal to make clothes, 25 pal to make houses and 25 pals to make weapons. And he came out with their own currency for circulation. As you might imagine, the price you sell for the vegi and clothes are more or less fix. The money becomes a medium to trade different necessity. If 1 million dollars was printed, it would be more or less staying the same for a very long time.

The following questions raise:
1) How to calculate GDP for each people in the country?
2) How to calculate inflation which is a barometer for demand and supply?
3) The value of clothes and vegi are hardly demand and supply driven, how to determine the value of it?
4) How the leader know that 25 person planting vegetables is enough for national consumption, if it is not demand and supply driven?

Few months back, North Korea raised help to UN community asking for food supply as many of the citizens in the country live in starvation, however this request was turned down by UN. The reason provided was if North Korea afforts to make nuclear weapons, didn't see why they couldn't affort to feed their citizen. One can argues that it was UN that closed off the two way trading between North Korea and the rest of the worlds, the point here is North Korea which adopt purely communism ideology is not self sustainable.

In contrast, capitalism does not impose any restriction to the price of a product and services. A bag could be range from 10 dollars to 1M dollars as long as demand and supply calls for it. The GDP for a country is theoritically infinite, depends on how well the products that they produced are needed by the rest of the worlds.

When the price of the product reaching sky high, at one point it will burst just like all the bubbles burst happened in the history. One need to be smart enough to different between the intrinsic values of a products and services against the price pay. Like what Warrant Buffet has quoted: "Price is what you pay, value is what you get".

This is what make capitalism so seductive and dangerous at the same time.

Excluded the discussion of greed here. Be it capitalism or not, it is always an issue and need to be regulated.

Just like what illustrated in Al Gore's an inconvenient truth video, which won him a nobel prize in peace. Although whether he walks the talk is questionable.

There will always be endless discussion on how do we weight on what we have achieved, to the expend of consuming our very own mother nature.

Do we measure the value of a human by what he own or what he do?

Who do we value more? An environmentalist named John or Bill Gates? If we only have one choice to be friend with only one of them and he will be friend with us, who would that be?

Off topic a bit I would say