ng rent, whereas Americans dedicate 26 percent of their income to living expenses (Fein, 1989). The Soviets denounced the existence of poverty in their country up until Gorbachev’s leadership, and instead claimed that poverty was only brought on by capitalism. The large number of people who were experiencing economic hardships sought for change in the USSR. Despite Soviet officials claiming that the poverty was caused by laziness, many believe that poverty was brought on by the economic state of the USSR. The economy under Gorbachev suffered immensely, causing over 20 million people to live impoverished lives (Fein, 1989). The communist Soviet Union crumbled soon afterward.
A defining factor of a capitalist economy is its economic freedom. The five most economically free nations are Hong Kong, Singapore, New Zealand, Switzerland, and Australia according to the Index of Economic Freedom (2018). Hong Kong is a part of China, yet the only things the Chinese government controls in Hong Kong is foreign relations and the military. The population grew in Hong Kong from 600, 000 to 6 million in fifty years (Friedman, 1998). This population growth was due to people fleeing from the communist state of China to Hong Kong. A major downside to reduced economic freedoms, is the reduced political freedom that typically comes with it. Both issues have gradually diminished in China since the height of their communist reign. It’s evident that people prefer freedom over control from the fact that people fled from their controlling to country, to a free country.
Friedman 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 h
