The Rise of Socialism

Communism envisions socialism as a transitional phase leading toward its ultimate realization. Core to communist theory is the abolition of privately-owned companies in favor of state ownership. This shift, it argues, eliminates the hardline profit motive inherent in private capitalism, which communism contends drives companies to disregard public welfare and national interests. Instead, state-owned enterprises are posited to operate driven by the interests of the masses and the nation, alongside profit considerations. Furthermore, communism claims to address the recurring economic instability (characterized by cycles every 4-7 years) seen under capitalism.

Following World War I, socialism gained traction in many nations. Within this movement, a significant division emerged:

• Revolutionary Socialism: Advocated seizing political power through uprising and revolution.

• Evolutionary Socialism (Traditional): Aimed to achieve a socialist government holding political power, but through the democratic electoral process. Its proponents reasoned that since workers (employees) vastly outnumbered capitalists (employers), socialist parties could win majority support and form governments peacefully via elections.
  

The rise of Lenin and the USSR through revolution, coupled with the USSR's implementation of extensive state ownership, profoundly impacted both the factions globally. Both revolutionary and evolutionary socialists looked to the USSR as a working example. This period saw the revolutionary faction increasingly identify itself as communist. The evolutionary socialists admired the USSR's achievements and began having doubts with their own relatively passive approach of achieving a socialist government. They, however, retained their reservations against pursuing revolution in their own countries.

After the collapse of the USSR in 1991, the revolutionary communist model largely faded. What endured was socialism, exemplified by the contemporary system in China. Crucially, China maintains communism as its ultimate goal, viewing its current socialist phase as the pathway towards that destination. Chinese socialism, as practiced today, involves strong government regulation of fundamental economic policies aimed at benefiting the masses. Its objectives include eliminating recurring economic instability (like the 4-7-year recession cycles associated with capitalism) and reducing inequality (the rich-poor gap), while also promoting workplace democracy.

China, remarkably, has a significant private sector, comprising of private companies and a well-developed stock market. However, the government maintains ownership of companies producing the means of production (e.g., key industries, infrastructure, raw materials). This structure aims to prevent a handful of private individuals from manipulating these critical resources for personal gain and exploiting the public. Consequently, the economic hierarchy in Chinese socialism places the government at the top, followed by private employers, and then employees. This contrasts sharply with the perceived US hierarchy, where private employers sit at the top, followed by the government, and then employees.