20+ Differences Between Socialism And Communism (Explained)

Both Communism and socialism are critical economic systems that are practiced around the world. In a class-free society, most resources are collectively held by the population rather than by individual people.

This is the definition of pure Communism. Contrarily, socialism is a kind of capitalism in which everyone has an equal share of the four components of economic productionβ€”labor, enterprise, capital goods, and natural resources. 

Fundamentally, socialism is built on the idea that everyone inherently wants to collaborate but cannot because of capitalism’s competitive nature.

Under socialism, the government uses centralized planning to distribute resources based on two criteria: the needs of the individual and the nation’s needs.

Key Differences:


  1. Socialism is an economic system in which everyone in society owns an equal share of the means of production.
  2. It is not based on a system where production depends on people’s consumption.
  3. Eliminating the rich and poor socioeconomic classes through fair distribution of income is socialism’s major goal.
  4. The government has such an extensive influence over the job market that it frequently serves as the main employer. Thus, complete employment is guaranteed.
  5. Sweden and Norway are two nations that support a socialist system of government.


  1. Under Communism, individuals are provided with most of their food, clothes, shelter, and other basics depending on what the government deems to be their requirements.
  2. In a communist society, there is no such thing as private property; all real estate is communally held, and each individual is given a share according to their needs. 
  3. The government also has complete authority over all facets of economic output.
  4. In Communism, a bloody revolution in which the working class overthrows the lower and middle classes is considered necessary to establish a wholly communist society.

History of Socialism

An economic and political ideology known as socialism first appeared in the 19th century in response to perceived injustices and inequalities brought on by capitalism.

It was first used to criticize the Industrial Revolution’s dominant social and economic circumstances. Karl Marx, Friedrich Engels, and Robert Owen were influential intellectuals who helped shape socialist philosophy.

During the 20th century, socialism was put into practice. The Bolshevik Party and Vladimir Lenin’s Russian Revolution of 1917 led to the creation of the Soviet Union.

The Soviet Union centralized economic planning, collectivized farms, and nationalized enterprises. Other nations also adopted socialist ideals and founded socialist or communist regimes, including China, Cuba, and some Eastern European countries.

The socialist movement experienced disagreements and divides throughout the 20th century. There were disagreements on the state’s role, balancing individual freedoms and communal interests, and how much economic planning should be done.

Reevaluation and a turn towards market-oriented reforms were triggered by the fall of the Soviet Union in 1991 and the changes that followed in other socialist countries.

Pros of Socialism:

  1. Everyone receives compensation for the work they accomplish through a salary or wage. The way the wage system is set up prevents any significant inequities.
  2. Socialism is strongly related to economic planning. Planning guarantees quick economic growth in the intended direction.
  3. In a socialist economy, the central planning body manages the balance between production and consumption.
  4. There aren’t two groups of have-nots in a socialist economy. There is no exploitation as a result. Everyone receives a fair portion of the national product.
  5. Depression and unemployment are not possible since the government controls production and distribution.
  6. Everything is decided by the planning authorities after thorough consideration of the needs of society. The State is in charge of production.
  7. Economic equality is Socialism’s greatest asset. The concept of private property is absent. It prevents anyone from accumulating riches. Therefore, there is no chance of getting wealthy.
  8. Through the equitable distribution of products, the provision of employment for everyone, and the social protection of all, a socialist system works to reduce social inequities.

History of Communism

The political and economic philosophy of Communism first appeared in the 19th century as a more extreme variation of socialism.

Karl Marx and Friedrich Engels’ works and theories significantly influenced it. Communism seeks to establish a classless society in which all property is held in common and money and resources are divided in accordance with each person’s needs.

With the 1917 Russian Revolution and the subsequent creation of the Soviet Union, Communism was first put into practice.

The Soviet Union’s government centralized planning, collectivized agriculture, and nationalized industry under the direction of Vladimir Lenin and later Joseph Stalin.

The Soviet Union established itself as the world’s first significant communist state and was a role model for future communist organizations.

Other nations also experienced communist revolutions. The Communist Party won the Chinese Civil War under Mao Zedong, who also oversaw the founding of the People’s Republic of China in 1949. In 1959, Fidel Castro oversaw a communist revolution in Cuba.

Pros of Communism:

  1. Communist administrations can swiftly mobilize economic resources at whatever size is required for any undertaking. 
  2. It can generate industrial electricity on demand, carrying out massive projects that would take other economies years to design.
  3. Even though they might not have a royal title, many rulers had lifelong power. Because of this framework, it is simpler for the leadership to adapt the nation’s economic goals to their own.
  4. Communists believe that capitalist countries would inevitably fall apart because of a top-heavy structure brought about by the accumulation of riches on top of the poor.
  5. By pushing everyone into a job and using threats of terror to control their behavior, state-sponsored Communism rejects the concept of a person aiding the government in some other way if they don’t want to work.
  6. Communists think that reading and writing skills are indicators of an educated populace, despite possible attempts by government officials to prevent the education class from acquiring control.
  7. Before it is corrupted by the leadership who imposes the State’s authority, Communism aims to include all families, all ways of life, and all religions. 
  8. It invites everyone to consider each person as a substantial component of the total rather than highlighting people’s disparities as a source of disagreement.

Comparison Between Socialism And Communism

AdvantageIn communism, there is low unemployment, so everyone gets a job.People are not incentivized under socialism to work harder, more effectively, or more independently.
DisadvantageGoods are allocated per each person’s capacity and contribution and are meant to suit individual and community needs.No incentives are given to innovate or come up with good ideas.
Involvement of GovernmentGovernment is the central authority that makes all the rules.The government plans the economy.
Distribution of GoodsAll fundamental human requirements are supposed to be satisfied by the products provided free of charge to the populace.The government plans the economy.
ReligionPeople are allowed to choose their religion.Freedom of choosing a religion is effectively abolished.
Equality or DifferentiationDespite variances, there are classes. There is a chance that some people may make more money than others.There is no longer a concept of class. It is practically impossible to make more money than other workers.
Example of CountriesDenmark, Finland, IcelandChina, Cuba, North Korea

Major Differences Between Socialism And Communism

What exactly is Socialism?

In socialist nations, the State regulates and possesses productive resources, including the land, the environment, businesses, etc.

The people receive only what they require despite earning pay. The game aims to eliminate social classes and promote equality for all players. Socialism has certain inherent flaws that become apparent when implemented in a nation. 

There is no motivation to think outside the box and develop methods to increase productivity and wealth under Socialism since no one is rewarded for producing more than anybody else.

Low productivity, as a result, causes widespread poverty. People in positions of authority abuse their positions in countries that have adopted Socialism, which has resulted in widespread corruption.

They want to maintain their power rather than attempt to build a society where they may renounce it.

Cons of Socialism:

  1. They can only consume the items that the planning authorities have approved. The rationing mechanism used to distribute goods to individuals violates the consumer’s freedom.
  2. As a result, the State becomes authoritarian and intrudes excessively into people’s everyday lives. The nation’s citizens become unhappy as a result.
  3. Red tape and bureaucracy are in full force under Socialism. It discourages making prompt decisions.
  4. In a socialist system, bureaucrats and government employees run the economy. Instead of production, people are more concerned about their pay.
  5. Given that the State holds the factors, resource waste is a possibility. Resources may be misallocated and wasted as there is no price for them.
  6. People do not have a choice in their occupations in a communist economy. They must accept the employment that the government has selected.
  7. In a socialist system, the government is in charge of everything. They could be ineffective, uninteresting, and sluggish going. Their pay is independent of the company’s revenue.
Pros And Cons Of Socialism

What exactly is Communism?

German thinkers Karl Marx and Friedrich Engels originally put out the current concept of Communism. They collaborated on a brief text known as “The Communist Manifesto.”

They predicted that the proletariat, or working class, would one day rise up and overthrow their affluent bosses. The proletariat would then fundamentally alter society. The idea of a classless society is one of Communism’s central tenets.

As a result, communist administrations made a determined effort to eliminate anything that may symbolize class conflict or inspire class jealousy.

The ultimate objective of this “classless society” would be a society in which there was no such thing as money and everyone received equal quantities of food, clothes, and housing from the government.

True communist countries are to have no private property ownership. The federal government is the sole owner of all real estate and corporations. As a result, the government employs everyone.

Additionally, it would imply that all means of generating commodities and services were under the jurisdiction of the State, enabling it to regulate how those items were distributed.

Cons of Communism:

  1. The fact that Communism eradicates the free market from domestic life is its worst drawback. Therefore, the prices customers must pay are not determined by the rules of supply and demand.
  2. The notion of individual liberties is irreconcilable with the ideology being applied in a communist system since the government’s demands and the interests of society are indistinguishable.
  3. There is a disparity between the capacity to plan centrally and its comprehensive implementation, even if the government can quickly mobilize substantial resources for nearly any demand thanks to communist mechanisms.
  4. In a communist society, since the government controls everything, entrepreneurs never need to operate. 
  5. That indicates that the production cycles are barely efficient enough to create what is required for both the potential small export market and domestic consumption.
  6. There is a reason why Communism is only practiced by five current countries worldwide. In the process of leaving Socialism, North Korea, China, Laos, Cuba, and Vietnam are no longer considered genuine examples of this kind of government.
  7. A diverse population may be difficult to control since they require varied regulations.
  8. Because it lacks drive, Communism struggles to strike the proper balance between supply and demand. Only those products the government deems the populace needs to keep working must be produced.
  9. Communism controls the means of production in society and imposes stringent rules on companies that compete in the market, preventing a class system from developing among the populace.
  10. A communist government has a state-owned economy; hence there is a heightened danger of misuse for monetary gain, to exert authority and control, or to further personal goals.
  11. Due to the pressing necessity to meet everyone’s fundamental food requirements, most employment in communist nations is related to agriculture.
  12. Once in power, the communist party’s objective is to use all methods necessary to maintain that leverage.
  13. Contrary to popular belief, Communism frequently leads to poverty.
Pros And Cons Of Communism

Contrast Between Socialism And Communism


  • Socialism – Everyone has an equal ownership stake in the productive capital.
  • Communism – In this, the State also owns private properties to promote a casteless society.


  • Socialism – In Socialism, economic equality of the society is promoted.
  • Communism – Communism’s goals include abolishing private property, central planning, reducing income gaps, and collective authorization of the means of services.

Production Of Goods 

  • Socialism – In Socialism, the goods are produced according to use value in some cases, as commodities in others.
  • Communism – In Communism, the goods are produced by the government as a whole for all the country’s citizens. This process leads to the wastage of goods, as there is no data on how many products are consumed on the whole or by an individual.

Services Provided

  • Socialism – Socialist governments provide free healthcare, education, and minimum wages.
  • Communism – State-directed social services, child care, healthcare, and shelter.
Difference Between Socialism And Communism

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Frequently Asked Questions (FAQs)

Q1. Which countries can be said to fall under the category of socialist countries?

Countries like Denmark, Finland, Norway, Sweden, and Iceland can be included in the category of countries that follow or motivate Socialism.

Q2. Which countries can be said to fall under the category of communist countries?

Countries like Vietnam, North Korea, China, Cuba, and Laos can be included in countries that follow or motivate Communism.

Q3. What are the similarities between Socialism and Communism?

Both emerged from the resistance to affluent corporations’ unjust exploitation of employees throughout the industrial revolution.

Both believe government-controlled institutions or collective groups, rather than individually owned firms, will generate all commodities and services.

Supply and demand issues, as well as other areas of economic planning, fall primarily under the purview of the central government.

Q4. Which is better for societal growth, Communism or Socialism?

Despite distinct economic systems, both philosophies aim to prevent worker exploitation and reduce or do away with the dominance of economic classes in society.

Although Socialism encourages equality in society, the next logical step is ultimate communal ownership if the State has total control over the means of production.

Not just in terms of productivity but also in terms of the entire economy and society, including private property. Communism is Socialism’s extreme.

Even though many nations profess to be communist, their citizens are unhappy; this clearly demonstrates which economic system is best.

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