Communism vs Socialism

Article byKhalid Ahmed
Reviewed byDheeraj Vaidya, CFA, FRM

Difference Between Communism And Socialism

The primary difference between communism vs socialism is the nature of ownership of assets. In communism, the ownership of the factories, residential properties, and agricultural lands is state-owned without any private ownership. However, in socialism, the ownership of land, factories, and agricultural land lie with the private sector or individuals. Socialism can exist within the framework of democracy, whereas democracy has no place in communism. In communism, there is no religion besides the state. Socialism allows people to practice their religion.

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Key Takeaways

  • Socialism and communism have the same roots in worker exploitation but different characteristics.
  • Communism fully controls the production of goods and services. In contrast, socialism controls only the essential factors of production. But both reject capitalism.
  • There is no democracy, class, religion, or private sector in communism. Whereas socialism is integral to democracy, promoting private ownership, wealth as per efforts, and independent religious beliefs.
  • Market forces are not present in communism, unlike socialism, where the government regulates trade and business through its policies and personnel.

Comparative Table

Here is a table to depict communism vs socialism.

ParticularsSocialismCommunism
DefinitionIt refers to an economic and political state where only essential factors of production and services are under public (government) control.It means the state where the public owns everything in the form of the central leadership of the communist party.
PhilosophyThe basic idea is to give resources to individuals as per their contribution.The basic philosophy is that everyone will get the resources as per his needs despite extra efforts put by some.
Economic planningThe central government does economic planning for essential products and services.The group of leaders of the communist party plans everything.
Ownership of resources and productionThe government owns the infrastructure, health, education, transport, railways, power, and other such sectors that private individuals partly or fully own.The central leadership of the communist regime controls everything from production to distribution.
Distribution of products and resourcesThe democratically elected government ensures equal distribution of essential commodities, goods, and services per individual contribution.The communist regime distributes the common societal needs equally to all, even if anyone gives more input in the production of services.
Class systemThere is income equality amongst various classes as per their efforts, but some gaps in earning between classes exist.All forms of economic or social classes are abolished.
ReligionAll are free to follow their choice of religion.All sort of religion is abolished, and the state becomes the religion.
TaxesA progressive tax system is present.The tax system is absent as the wages of all remain the same.
Financial institutionsThis system reform the existing financial system for the public good by nationalizing banks.Banks and the financial system are fully in control of the government.
Market systemIt has the presence of demand-supply for goods and services in private.It does not have a prevalence of demand and supply owing to government-controlled prices of goods and services.
Form of governmentDemocraticAuthoritarian

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What Is Communism?

Communism is a form of political doctrine that aims to build a classless society by ending capitalism. It, therefore, emphasizes equalizing wealth distribution. As a result, communism advocated for a global revolution to end the rich and exploitative class to create a classless society.  In the communist party, workers control society through a central authority. So, the proletariat or the members of the society have common ownership under communism. Hence, they equally own the factors of production and the produced goods and services. The government acquires all the private property. The government itself becomes a religion. Therefore people worship it.

The communist party has full authority and controls everything under the communist regime. So, under the system, people have to contribute to the economy and government as per their abilities. People are given a share in the state livelihood concerning the collective needs of the society. Moreover, the group of heads of the communist party owns the manufacturing factors like land, capital, and entrepreneurship. Although the head group does not own the labor, the central group decides the deployment of the labor. According to historical records, communist systems have always failed to some extent.

What Is Socialism?

Socialism is a broader concept referring to an economic and political theory where the government, society, and private sector collectively own the the production of goods, dispensation, and interchange equally for homogeneity. Hence, socialism promotes a democratic form of government.

Land ownership, agricultural plots, and factories are in private individuals’ hands. So, they can use it to their benefit and earn profits for themselves. However, the government owns all those production factors that positively affect society. Examples include the power sector, railways, health care, and education. Private businesses are also allowed in other sectors that may not be feasible for the government to own, like dairy, crop production, pen, pencil, paper, water supply systems, etc.

However, in socialism, capitalism in some sectors exists in some form. It does not require a centrally controlled group to dictate and own everything. Therefore, it also does not require a single party to implement socialism. Therefore, even a democratically elected government can implement and own those aspects of society that may adequately fulfill the basic needs like water, electricity, healthcare, housing, and education.

Hence, in a nutshell, one can say that socialism’s prime goal is to promote mixed ownership of all kinds of production. This ownership is also by the public sector instead of completely by the private sector for fulfilling all human beings’ basic economic and social needs.

Thus, even if it’s communism vs socialism, these two systems are relatable but not identical.

Communism vs Socialism Infographics

Communism-vs-Socialism-info

Similarities

Some striking similarities between communism and socialism are discussed below:

  • The communism vs socialism definition clarifies that both communism and socialism aim at social welfare. The former aims at fair, whereas the latter aims at equal distribution of wealth.
  • Both are political and economic systems.
  • Both the systems want to eliminate class differences and equalize income distribution
  • When it comes to social welfare; every government is slightly communist social welfare.
  • Both beliefs are based on Karl Marx’s notion that capitalism allows the exploitation of workers by the owners. So, they reject capitalism and support equal economic power in society.
  • Both advocate the production of essential services and goods under the government’s control.
  • Moreover, both result from the workers’ opposition to their exploitation by the rich classes during the industrial revolution.
  • Communist and socialist countries include the People’s republic of China, the Republic of Cuba, the Socialist Republic of Vietnam, and the Lao People’s Democratic Republic, to name a few.

Communism vs Socialism vs Capitalism

The prime difference between capitalism from the other two systems is its central aim. The central aim of this system is to maximize profits. Whereas in communism, the prime aim is to maximize social welfare. So, the government completely controls the resources and factors of production. In socialism, the state partially controls the resources. However, in capitalism, the state does not intervene in the markets. It promotes a free market and free economy.

This has been a guide to what is communism vs Socialism. We explain the differences between Communism & Socialism with Infographics and their similarities. You can learn more about them from the following articles – 

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