I just wrote this comparison in a comment on my earlier post about saving society with handcuffs:
Here's how I see it.Capitalism: high average growth, but with lots of intermediate volatility that enriches some and makes others destitute (generally due to their own choices).
Socialism: low average growth (historically negative) but with less volatility until everything collapses due to demographics.
Basically socialism seems like a graceful way to spend down your societal capital as your society dies off.
I like it enough to it quote myself!
Is socialist economic growth really historically negative? The Soviets industrialised a predominantly peasant economy very rapidly, and certainly up to about 1970 growth was completely unprecedented... that doesn't make up for the brutality of Stalin or the decades of stagnation that followed, obviously. But I think the rapid industrialisation is quite a common feature in hard-core socialist countries, so I do question your negative growth claim.
I would agree that that volatility is the big difference though -- although communist countries are capable of sustained periods of growth that allude capitalists, it seems that once a communist country enters an economic downturn, it is usually unable to correct itself. Since economics seems to be inherently unstable however you run it, I prefer capitalism's self-correcting properties. However, I do consider it a failure of capitalism when so many thousands of people loose so much each recession -- their homes, savings, etc. The very poor don't have much to loose, and the very rich will get it back in about seven years or so; but those in the middle loose out. I recently heard an economist explain how in the years after black Wednesday Britain made a profit from having bought up so much foreign currency. Lucky us -- except that money never arrived at the people who lost their homes during the crisis, it went to bonuses for the city boys to spend on cocaine and lamborghinis.
It makes me sound like a rotten socialist I know, but it simply isn't fair. It's a naturally emergent redistribution cycle from the poor to the rich, and it doesn't seem unreasonable to me for a government to set up a redistribution cycle in the other direction, simply to offset the natural one.
Interesting point about the early advantages of socialism. I don't know enough about the pre-USSR Russian economy. I'd be surprised if they had a free market system. Were they feudal? They were ruled by some sort of aristocracy right?
It's logical that if your existing economy is horribly screwed up that central planning and socialism could help improve the situation. But the central planning seems to reach a limit of effectiveness as complexity increases.