Communism hasn't worked in the past because as such no one every outlined what specifically it means for a perfect world after the worldwide spontaneous workers revolution. It's just imagined as a utopia where the means of production are shared. Communism is inherently a different notion than what I believe some people are trying to get at here. From what I can tell, people are talking about a society that doesn't have a notion of "money" altogether. It's tough to imagine one because we are so conditioned into thinking of everything in terms of money (this is coming from a man who tends to lean Libertarian).
Communism as a philosophy versus communism as implemented by nations are radically different.
The communism philosophy has worked out fairly well for small groups of like-minded individuals. They all pool their resources, they all help contribute, they all do work for the group, they all get benefits ... and they are inclined they can all sit around the campfire and sing songs when the day is done. There were groups of people who followed the philosophy all through history, the name is relatively new. Back in the 1960s there were quite a few communal groups that earned the ire of people who hated other governments that claimed to be communistic.
Communism as a government in practice looks nothing like the philosophy. In China it is closer to a single-party democratic dictatorship; those at the top of the political parties can discuss their views, they are expressed as a single party which people have no other option to support, and they are implemented in dictatorial methods. Under Communist Russia it was more like a autocratic bureaucratic dictatorship, those who had consolidated power operated in bureaucratic fashion to generate policy dictated to the masses.
Capitalism isn't designed to handle the social/human aspects of society, it's merely an economic system devised to optimize profits.
Fully agree.
Capitalism left to itself in isolation fails. When capitalism is subordinate to a moral framework history shows it works well, and has been a vigorous driver of governments for over 3000 years. Back in my school days I had some lessons on Aristotle's analysis of capitalism back in his day (about 300 BC) where it was already a well-studied subject. Even then he noted the key factor of ethics for the system to work, otherwise the people become slaves or even worse than slaves.
An interesting thing through history is how it doesn't particularly matter which moral framework is used, but for it to work well society as a whole needs to accept that a set of moral guidelines of right and wrong are more important than the profit motive. When that fails capitalism traditionally cripples the nation until it is consumed by others.
Capitalism and the pursuit of profits tends to encourage trade, which encourages the flow of ideas and information. One key way to reach great profits is to innovate, and historically there is a surge of innovation in capitalistic cultures. It isn't just because innovations increase your trade and your profits, it is also a display of wealth that your people are educated or that you can hire educated people.
Many of the classical scientists and artists were funded by rich individuals as a matter of show, much like how many of today's corporations will help fund conferences and send their brightest minds out as speakers as they stand by the corporate banner, or how when the latest products come out companies push to have top billing on the list titled "Sponsored By".
On its own capitalism fails. But as a subcomponent for economics in an otherwise strong moralistic society it can work well at keeping a society vital.
Trying to swing this back to the central line of the discussion ...
Despite the flaws the original argument is well supported with history that when the capitalism is used alone by amoral or immoral individuals, when all that matters is to get gain and there are no viable constraints, that will fail. Even if there are some constraints when they can be overcome through bribery or corruption or even indifference they are no longer viable.
Classical Greece suffered from it; profiteering was a major factor in the wars between city-states. The great Roman Empire collapsed because of it, those with money sought only more money and grandiose living and all other items, including national defense, were ignored in favor of the appearance of wealth.
Similarly with classical India, the Gupta Empire was at its peak when the people had an enormous amount of trade and also had strong moral guides. When the pursuit of money become primary, even beyond the showing of wealth through grand architecture and art, infighting became more common and then widespread, the common folk reverted back to mostly chattel, and within two generations the empire collapsed.
The US is suffering a similar variation of the problem where the distribution and concentration of wealth are key components that are followed without any form of moral guide. Based on history (and observations of society) the US is likely to result in some serious upheaval in the near term if changes aren't made. Corruption in the government, both directly under the euphemism of "campaign contributions" and less directly through processes like regulatory capture, severely weaken the constraints. Society as a whole has transitioned from a strongly moral society (mostly protestant ethics) to a "me first" attitude common in capitalism. Right and wrong are increasingly viewed in terms of profit instead of terms of morals.
The results of this particular trend is exactly as the original post describes. Not the part about the cost of goods dropping to nothing, but the part about how the common folk lose the ability to have viable lives, how there are those in power with enormous wealth and then there is everyone else who is expected to generate and then surrender wealth. Suddenly unemployment skyrockets and goods that should be commonplace become scarce. Generally this is followed by a revolution, either within the framework as new people emerge and transform the power structure, or through a brief bloodletting and establishment of a new government.
The fall of trade-based empires under overwhelming greed and profiteering follows two well-established pattern through history. The precursors frequently are a sudden drop of intellectual and artistic pursuits as the common folk lose their leisure time and disposable funds. Either it transforms as the power structure is replaced, or it gets consumed by neighbors.
