edman has said that Hong Kong has a Laissez-faire economy because government economic spending in Hong Kong is at most 15 percent of the national income (1998). Laissez-faire is French for “let it do”. In relation to economics, Laissez-faire refers to minimal interference in economics by governments. Hong Kong is very close to having a laissez-faire economy, which has its benefits. Hong Kong is very small in size, and therefore has very few natural resources; despite this, Hong Kong’s economy is booming. Its gross domestic product, GDP, per capita is the 17th highest in the world, at $61, 400 (The World Factbook, 2017). A high GDP per capita indicates a high standard of living because there is a large amount of economic output per person. The higher the GDP per capita is, the more likely it is that the public is satisfied with their country, which subsequently leads to a lower likelihood of political uprisings.

Unlike Marx’s theory that capitalism is only a stage that is overthrown by people who seek out communism after their dissatisfaction with capitalism, the Soviet Union was dissolved because people were unhappy with the communist system. The non-competitive nature of communism has negative implications on all tiers. The working class knows they are guaranteed the same benefits regardless of how much work they’re doing, and how well they’re doing it. The room for economic growth is minimal. At a higher level, there is no competition between firms, which causes a stagnation. No economic growth leads to unhappiness, which leads to political backlash, and revolutions.

Capitalism results in economic growth because it feeds innovation through competition. China has developed an increasingly free market economy. The Soviet Union was innovative whenever they were involved in competing with the United States, but for products only distributed within their nation, it was always the bare minimum. The “invisible hand” of competition, brings the market to a natural equilibrium according to Adam Smith. Competition supports individual growth as well, and eventually results in more specializations of work.

An important distinction between capitalism and communism is the idea of equal opportunity verses equal outcome. Capitalism supports the idea of equal opportunity, but this automatically results in an unequal outcome because of the varying amounts in which different people are willing to work. Communism on the other hand supports the idea of equal outcome. There should be no weal