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Communism vs. Socialism – What’s The Difference? 

Communism and socialism are political and economic models that can be confusing.

Both of these are different from the United States capitalist system.

Related: Capitalism Facts


But it is important to understand how socialism and communism are different from each other.

Both communism and socialism desire to fix the issues they see within society. For example, the large gap between the rich and the poor. Communists believe that a violent revolution is the only way to fix the gap. Socialism does not think that violence is always necessary. It works to make the needed changes through a more democratic process.

Both of these models use the idea that the government provides for each person. This is based not only on their needs but on what they can contribute back to society.

It happens in a few different ways with big differences between the two systems.


Differences Between Communism & Socialism

Another big difference between communism and socialism is the idea of who holds what kind of power.

Communism believes that the state or the government should control and own all aspects of economic production.

They also think that the state should provide every citizen with their basic needs.

Socialism is a bit more flexible. Socialists believe that all citizens should share in economic resources. Who can have what is the decision of a democratically-elected government.

presidential elections

This means that, unlike communism, socialists do believe in a private property. All industrial and production is communally owned and managed by an elected government.

Communism and socialism also differ in the ideas of the class structure. Communists believe that there should not be a class structure at all.

This means that there are no ultra-rich or very poor members of society. They think that everyone earns the same, and almost no one is above anyone else. 

pay and money

Socialists believe something a little different. Socialists believe that a class structure can exist. But it is much more relaxed and less defined than both communism and capitalism.

They think that it is possible, but still rare for somebody to earn more than others.


Communism vs Socialism

Basic Idea From each according to his ability and to each according to his needs. From each according to his ability and to each according to his contribution.
Economic Leadership Central Government Central Elected Government
Economic Resources Ownership The government owns and controls all resources. No individual property is allowed. All Industrial and production capacity is communally owned by the democratic government. Individuals can own personal property.
Economic Production Distribution The intent of production is to meet human needs, the product is distributed at no charge to the people. The intent of production is to meet individual and societal requirements and are thus distributed according to individual ability and contributions.
Class Segregation Abolishment of Class. The ability to earn more than others is non-existent. Classes exist but with very slight disparity. Some can earn more than others.
Religion Abolishment of Religion Freedom of Religion
Censorship Authoritarian crackdown on criticism and dissent Protection of free speech and human rights.
Taxation Not required Progressive Tax System
Welfare Welfare for everyone without discrimination. Supports widespread welfare with an emphasis on public health and education.
Ownership of Property Private property is not allowed Private property is allowed
Labor The state determines occupation and employment of the worker. Workers can decide their own occupation.

Key Similarities between Communism and Socialism

Both ideologies originated out of the exploitation of the working class by Rich and Powerful Industrialists. 

Both ideologies require that all goods and services be produced by institutions controlled by the government or collective organizations and not private individuals.

Both ideologies emphasize the responsibility of the central government for all economic planning and production.

Understanding Communism

Under communism, the idea is that the government provides for the general public based on their needs. The main goals of communism are to get rid of the gap between the rich and poor and create economic equality.

Communists believe that in certain cases, a violent uprising is the only way to get rid of the upper class and restore everyone to an equal footing.

This means that no one is allowed to own private property, and everyone is on the same level. 

There are many different types of communist ideals and societies. While some claim to be real communist nations, only a few countries actually meet the requirements.

Communist flag Russia

Understanding Socialism

Socialism is a system that is based on public ownership. The understanding of socialism is that everyone wants to get along and cooperate. A socialist society uses a centralized government.

The government controls resources, property, income, and many other things. It is then their job to distribute it among the people. 

One of the important goals of socialism is to narrow the gap between the rich and the poor, so everyone is equal. Socialists try to do this through cooperation.

They do not believe that there is a need for a violent revolution when things are not going right.

Russian Revolution

How do they differ from capitalism?

Both of these systems differ from capitalism in a few critical ways. Capitalist nations, like the United States, believe in free and fair competition.

Capitalism also believes in the idea of economic freedom In a capitalist society, most things are owned by private companies. The government does not own things such as factories and businesses. 


A great example of this is most of the food and beverage companies like McDonald’s or Coca-Cola. This practice means that these business owners get to keep what they earn. They can also continue to grow and expand.

In this capitalist system, some people may earn more or less than others, and wages do not have to be fair. In a communist or socialist system, things would not work this way.

Taupo McDonald's

Instead of some people making more or less money, the government controls all the money

Everyone contributes what they can to make sure they are all treated the same. The government would also decide where you live, and how big or small your home would be.

Social Democracy Explained

Democratic Socialism is a Social, Economic, and Political school of thought which states that while society and the economy need to be run democratically, they must be focused on meeting the collective needs of society rather than for specific individuals as in capitalism. 

Modern Democratic Socialists want to transform the current capitalistic landscape to a more socialist system through the existing methods of democracy and not through revolutionary methods favored by the Marxist. They believe that universally used services such as housing, utilities, health care, etc.. should be distributed by the government, and consumer goods are distributed by capitalistic free markets.

The last part of the 20th century was witness to an emergence of a more toned-down form of socialist democracy that emphasized a mixture of socialist and capitalist policies towards economic production supplemented by extensive welfare programs to provide for the basic needs of all citizens.


supply demand exchange

Karl Marx and the History of Communism

Socialism was born out of the wide-ranging economic and social changes caused by the Industrial Revolution, and particularly the struggles of the working class. The wealth disparity between the working class and the industrialists had massively widened during this period.

Early in the 19th Century, socialist thought leaders like Charles Fourier, Robert Owen, and Saint-Simon put forward ideas for the reorganization of society along the lines of cooperation and community. This was in stark contrast to capitalism where free-markets controlled all aspects of the supply and demand of goods and services.

Along came Karl Marx, a German philosopher and Economist who would go on to become one of the most influential socialist thinkers of all time. Along with Friedrich Engels, Karl Marx authored The Communist Manifesto in the year 1848. 

He wrote an entire chapter on how earlier models of socialism were utterly unrealistic. Karl Marx believed that all history was a history of class struggles and that the working class or proletariat would someway or the other triumph over the capital class or bourgeoisie. Thus taking control of production and forever abolishing the class system.

Communism often referred to as revolutionary socialism originated as a response to the Industrial Revolution and came to be governed by the principles put forward by Karl Marx – pushed to its extremes. 

Marxists believe that Socialism is the first mandatory phase on the journey from capitalism to communism. There were no distinctions between communism and socialism in any text put forward by Marx or Engels.

Examples of Socialist and Communist Countries

Three countries identify as communist states: North Korea, China, and Cuba. The government of North Korea controls all the resources like property and farmland.

chinese communist party

They also handle government-owned housing and assigned homes, as owning property is forbidden.

China also uses a similar system. The government housing system that they have is very competitive. Cuba also works under a communist program. They also have a competitive subsidized housing program.

bank owns house

Cuba’s government also owns and controls most of its companies within the country, and has most people employed working for them.

Some countries that have identified as socialist states are Norway, Sweden, and Denmark.

These countries have to pay higher taxes. But, they also get free healthcare, educational funds, and retirement income.

These countries may not identify with all socialist ideas. Still, they can find the best parts that work for them and follow those.

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Final Thoughts

In our world that is growing and changing, we must become informed readers.

In this way, we can stay up to date on important issues. There is no pure capitalist, socialist, or pure communist nation in our world today.

Everyone has taken pieces of the system and used it in a way to best help their government.

The more we know and understand about these important issues, the better it is for our world. Understanding the difference between communism and socialism is important so you can be more aware of how the world works.

After all, that’s the first step in changing your future and the future of society.

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