Communism was killed off because it runs against the grain of the human evolutionary process, ie its not in our DNA. I think there is a paper out there that shows that should all wealth be evnly distributed tomorrow, most of it would be back in the heands of the current wealthy within 1-2 years.
Capitalism was let run free since 1950's, however it become clear sometime Capitalists need to be controlled for their own benefit, but also because we don't like seeing people exploited.
Looking at the Soviet Union, I don't think the main forces behind its fall had much to do with the incompatibility of communism with human nature.
The fall of the Soviet Union is widely produced as evidence that "communism does not work" and used as grounds for ridicule of the Soviet system, communism and socialism. However, the role that "Communism" played in the fall of the USSR is widely misunderstood and exaggerated in the name of imperial propaganda. It is my view that fundamental biophysical economic issues were major contributing factors to the collapse of the USSR. Biophysical economic limits tend to transcend economic ideology. Therefore, many of the problems faced by the USSR could also apply also to capitalist countries like the USA.
In a competition between empires there is always going to be a loser. The loser of this competition had somewhat of a different economic religion to the winner, one that was less efficient at using resources, but looking ahead I'd say neither industrial economic model is suited to a future of stagnant or contracting energy supplies.
The Soviet Union lasted about 70 years. The American global empire didn't emerge until after WWII when the UK went broke, and has been going for about 70 years; its collapse could well be on the horizon. Despite the polarising propaganda, both of these industrial empires have a lot in common. Indeed, all large industrial economies do, for the obvious reason that they tend to engage in similar activities, produce similar things and, significantly, require similar energy and resource inputs. Money is a lot more important in controlling access to resources under capitalism whereas communism, even if it uses some form of money, grants access to resources differently, but in reality both systems are absolutely resource-based. The focus of liberal social pseudoscience economics on things like capital, anthropocentric considerations (although labour is now often discounted) and often vague attributions of advancement to technology etc, coupled with a lack of regard for energy and other resources as key production inputs and ignorance of externalities is a source of serious problems that skew the economic picture. In other words, many popular views of economics, particularly in relation to the Soviet economy are quite simply wrong but rarely questioned because they suit the anti-communist agenda.
Free market vs. centrally planned economy comparisons are misleading, because the so-called free market is typically anything but free, and so-called centrally planned economies also featured elements of market economics. The various mammoth bureaucracies of the USSR had to compete for limited resources in what amounted to a special form of political market, and also engaged in barter with each other (at a local level) to correct shortages and excesses of resources allocated under central planning. Misjudgements in central planning flowed down to ordinary Russians who also had to deal with the consequences of over and undersupply of certain goods. Since only certain goods could be purchased with rubles from official distributors, other wants and needs of ordinary citizens were met through the barter of goods and services, blat (black market, political connections and favours) and private, non-collectivized farm stalls to which the government turned a blind eye. In the United States, a great deal of State spending and market intervention occurred and continues to occur in relation to the allocation of funding for the various industrial complexes (supposedly because it is essential and in the national interest and provides a lot of employment), and nowadays also for the bailout of increasingly illegitimate private business corporations and incessant money printing to stimulate the zombified economy, all at the expense of the taxpayers who are not consulted on the matter (in the increasingly plutocratic US the bottom 70% has virtually no say on government policy; with an awareness of this up to 50% of US citizens don't even bother voting).
Some of the main factors in the fall of the USSR and "defeat of communism":
(a) Soviet oil production stagnated from 1983 and peaked in 1988 (Russian oil production picked up again from 1996); world oil prices simultaneously fell, apparently after Saudi Arabia was persuaded by the US to flood the market with oil in 1985; these factors combined to reduce oil export revenues for the USSR at a time when it desperately needed hard currency for trade on global markets; reserves accumulated through higher oil prices in the 1970s were spent on projects that either failed to increase oil production or increased the need for oil, worsening the situation; liberalisation under Perestroika led to uneven growth and could not help the oil situation
(b) the domestic farming industry could not keep up with population growth from the late 1960s; this loss of self-sufficiency necessitated the import of increasing amounts of grain using dwindling oil revenues and in unfavourable exchanges with rather hostile nations; this grain was largely for feeding cattle rather than people directly
(c) the invasion of Afghanistan, which became the USSR's Vietnam War, was hugely expensive, wasting precious resources (fuel, materials, labour, lives etc)
(d) the continuing competition of the Cold War that saw a huge amount of resources wasted on the military industrial complex
(e) the fact that the Soviet Union had to compete in the trade of resources on the global market like a capitalist country while its domestic economy was less efficient at using them than the US and did not generate the huge surpluses of capitalism
(f) the failure of political institutions to adapt to and reform under changing circumstances, known problems were put in the Too Hard Basket,
(g) conditions worsened with the 1988 oil peak, COMECON barter that had usually favoured the Eastern European economies at the expense of Moscow vaporised and they were eventually forced to pay for oil at global market prices using hard currency (e.g. US$) they did not have; foreign aid was available, but on terms that were not supportive of the continuation of communist rule; North Korea and Cuba suffered greatly as the aid that Moscow had provided at huge expense dried up, although Cuba fared reasonably well in the long run
It's not hard to see that at least some of these factors are very basic economic issues that could also contribute to financial crises in capitalist countries. The failure of political institutions to adapt/reform is also not unique to communism - it's a common problem in the demise of empires.
Prior to agricultural economics that arose 10,000 odd years ago it looks like wealth was much more evenly distributed among the human population, so while I can see what you are getting at with the reference to DNA, I don't think I'd go quite that far. Modern humans have been around for at least 200,000 years (evolving over a few million), and for most of that time they were hunter gatherers with a very basic energy system (sunlight, hunted and gathered food, fire etc) and therefore a very basic, unspecialised resource economy without much wealth disparity. The enhanced energy supply that agriculture provided is what led to more specialisation and division of labour in the economy, accompanied by wealth inequality, stockpiles of food (fuel, energy = wealth) and increased violence, as well as technological advances from stone age through the various metal ages.
The 200 year old industrial economies are quite possibly just a flash in the pan, with both modern industrial economic religions based on the exploitation of energy dense fossil fuel, with unrealistic promises and projections of unsustainable exponential growth that ignore biophysical economic parameters. Biophysical economic factors will be driven home as energy supply constraints become a bigger issue in future with a high probability of causing economic collapse of some sort.
If communism was inhuman, surely some aspects of the modern capitalism are also pretty odd by comparison with most of human history, such as the fact that many people have an impersonal economic relationship with most of the people they interact with (whom they neither know very well nor trust very much), performing work that is detached from their basic needs like food and shelter, aside from the fact that they are paid money for doing it.
In his comparisons between the US and Soviet Union, Dmitry Orlov has written about the different incentives and egalitarian aspects of daily life for ordinary Russians under communist rule that were linked to the absence of the profit motive and market speculation, and how basic systems of production and distribution continued to function after the collapse in 1990-91 because within the borders of the State they were largely resource rather than money based and tended to have large stockpiles. Orlov argues that the American profit based system with long, delicate supply chains, car/truck dependence and just in time inventories is much more fragile in a collapse scenario.
RTT_Rules I think the path forward will be free market economies, more privatisation and govt focusing on the boundries and rules for which they play in to prevent bankrupt banks and sustained over heated economies.
Let's face it, the true free market economy under classical liberal precepts with small government is almost as dead in the real world as "Communism" and it ain't coming back under existing global institutions. As mentioned above, there is a lot more State funding and protection for the private sector as well as "innovation" and "creativity" in the public sector (or funded by the State) than many free market prophets would like to admit. Similarly, many commercial technologies were originally developed for the military using public money. The various industrial complexes of the United States comfortably feed off of taxpayers' money.
Private industry is not exactly proceeding as planned, because many corporations become so big through amalgamations and the elimination of real competition that they are deemed too big to fail, then given government guarantees, bailed out when they do collapse, if not temporarily nationalised; these too big to fail corporations effectively become extensions of the State, parasitic extensions that are gutting the nation. That is no-one's idea of how capitalism is supposed to work and in some ways is a combination of the worst elements of socialism and capitalism - socialising losses while privatising and concentrating gains.
Governments are enormous and in many cases getting bigger. The reach of the law and State bureaucracies is at an unprecedented stage except perhaps if we look to totalitarian "Communism" - you know, that extremely evil system of government against which we like to contrast our "liberal" capitalist system.
As business and governments continue to fuse together, we are on the path towards some sort of corporate fascism, so just remember that the political spectrum is shaped like a horse shoe, with communism and fascism at either end but still not very far apart.