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I agree with the basic idea of answer 1 and disagree with the basic idea of answer 2. The reason I say this is that I do not agree that Americans feared communism because the politicians made us do it. I do not believe that anti-communism was a way of stifling dissent within the US either.
I think that Americans have feared communism because it (as practiced) takes away people's freedom.
As the first answer says, communism certainly takes away people's freedom to get ahead economically. Communism as practiced has also stifled human rights in a way that is far beyond anything that has been done in the US (outside of slavery). People do not get executed for dissent in democracies. Democracies do not ban or try to control religion either.
America is based on the idea of freedom even if we do not live up to that ideal all the time. Communism takes away many freedoms (at least as it has been practiced in the real world). This is why Americans have feared it.
I would say that part of the frightening concept behind Communism and its relationship to America is that it has been used by politicians in the position of power to bolster their own position. The fear of Communism has been used to solidify political power in that people were less likely to question it, trusting their leaders more, allowing greater exercise of power to result. If we examine the history of American and Soviet relationships, there was never a real opportunity present where the leadership of both countries featured an open and clear understanding of one another. It was shrouded in the fear of "the other" and how this fear would impact the lives of the "the other" nation. It seemed that this was engineered to ensure that there would not be any dissent in either nation. There are some fundamental differences between both economic systems. Over time and with the dissolution of the Soviet Union and the economic crises of capitalism, we have begun to understand that both forms of economy have significant challenges. Perhaps, capitalism has less to which there can be such hostile aversion, but there are elements in both systems that can prove to be undesirable.
Perhaps there was some kind of fear psychosis in USA about communism till about 1960's This fear may not have been caused more by the increasing influence of USSR through spread of communism to many countries. Of course, USA had good reason to reject the communist ideology, as the ideology of free enterprise had served the country well for nearly 200 years, and thee was no need of risking change to another system of government and economy.
I believe the American fear of Communism waned automatically when it realized that USSR or any other country following the communist Ideology will really not be able to convert the entire world to communism. Finally with the break up USSR in 1990's the last remaining traced of fear from communism also vanished.
I am not sure if it is a frightening concept, but it is one of the theories of economics that goes against the very founding principles of the US. The US was built up by men who took risks and from those risks, received great rewards. If there is no reward for doing something well, unique, more effective, more efficient, then you remove the barrier to development and improvement in our lives. I am not sure if there are any countries that had used a pure communist form of economic governance. It could work for small tribes who don't progress or small communities who view progress as somethingg that is unattractive, but when it comes to the great societies of Russia, and China, most people feel that they were not communist in any way but rather dictatorships who circumvented their own economic principles.
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