Difference Between Communism Capitalism and Socialism

By : Neha Dhyani

Updated : Apr 6, 2022, 7:52

History witnessed the emergence of various ideas that have changed the world's social structures. With small-scale revolutions in the early modern period (16th to 18th century), full-fledged capitalism emerged by the 20th century. Moreover, the period between the 19th and the 20th century saw the emergence of communism and socialism. The three ideologies reshaped the world and ushered in profound changes in socio-economic and political structures. Understanding the Difference Between Communism Capitalism and Socialism is imperative to gain clarity on these revolutionary ideas.

Communism Definition

Communism owes its origin to the French word communism which means of or for the community. It favours state ownership of the economic resources, policies, and means of production. Moreover, communism favours the absence of private property, established in a revolutionary way. Communism as an ideology found scholarly elaboration in the writings of Karl Marx and Friedrich Engels.

Capitalism Definition

Capitalism, as an economic ideology, focuses on the idea of -

  • Free trade
  • Free markets
  • Profits
  • Private control of resources and production means
  • Entrepreneur-wage labourer-based relations of production

It had its inception in the early modern period corresponding to the 16th and the 18th century.

The emergence of capitalism underwent three stages -

  • Merchant capitalism
  • Industrial capitalism
  • Financial or imperial capitalism

It gradually transformed into global capitalism based on ideas of free trade and laissez-faire, also known as Neoliberalism, that we encounter today.

Socialism Definition

Socialism advocates for communal social ownership of the means of production in the form of public, collective, or cooperative, in contrast to the private ownership as expounded under capitalism. It favours government control on everything - ranging from economy to production and output. Moreover, the government engages in social welfare initiatives to ensure equitable distribution of wealth and equal opportunities for all. However, it is a broader concept than communism, as it functions in a democratic setup.

Important Exam
UPSC ExamIBPS PO Exam
SSC ExamDefence Exam
SSC CHSL ExamSSC Steno Exam
RRB JE ExamSSC CGL
RRB NTPC ExamIBPS Clerk Exam
IBPS SO ExamUPPSC Exam

Difference Between Communism Capitalism and Socialism

Communism

Capitalism

Socialism

It promotes state control of economic resources and the means of production.

It favours the concentration of wealth and means of production in the hands of private individuals.

Emphasizes state control of economic resources within reasonable limits.

There is complete state intervention in terms of economic policies.

There is no state intervention as it follows the ideal of laissez-faire.

State intervention exists but leaves some scope for individual intervention as long as it follows the fair distribution of economic resources.

Static economic system.

Dynamic economic system.

Flexible economic system.

The end goal of communism is to establish a communist egalitarian order, usually through revolutions or authoritarian regimes.

Capitalism strives to create a free society, economy, and market in sync with democratic and liberal ideals.

Socialism does not necessarily aim for the establishment of communist order. It can exist along with capitalist programs, thereby creating a mixed economy.

Communism, capitalism, and socialism are ideologies that shape socio-economic and political structures in society. Because they have subtle differences in their ideology, policies, and actions, it is imperative to understand the difference between communism, capitalism, and socialism. In a nutshell, communism advocates complete governmental control over all means of production and resources; socialism practices flexible forms of state control; and capitalism advocates a free economy and free-market without state intervention.

More Current Affairs Topics
Difference Between Democracy and RepublicAgri Udaan
Difference Between Endogenic and Exogenic ForcesAgricultural Extension Service
Agriculture Infrastructure FundAgricultural Price Policy in India
Agro-Based Industries in IndiaAgro Climatic Zones in India
Discretionary Power of GovernorAhom Kingdom

FAQs on the Difference Between Communism Capitalism and Socialism

Q.1. What is the main Difference Between Communism Capitalism and Socialism?

The Main Difference Between Communism Capitalism and Socialism is that Communism favours complete state control over means of production, economic resources, and policies. Capitalism favours no state intervention and advocates the creation of a free economy and markets. Socialism also favours state control over means of production, economic resources, and policies but is flexible enough to allow private entrepreneurship.

Q.2. What is the Difference Between Communism Capitalism and Socialism concerning the extent of private entrepreneurship?

The Difference Between Communism Capitalism and Socialism concerning the extent of private entrepreneurship is that While communism does not allow any private entrepreneurship, capitalism thrives on it and supports the concentration of wealth. However, socialism offers flexibility to private entrepreneurship as long as it ensures equitable distribution of economic resources.

Q.3. What is the Difference Between Communism Capitalism and Socialism regarding their aims/approaches?

The Difference Between Communism Capitalism and Socialism regarding their aims/approaches is that Communism aims to establish egalitarian communist societies through revolution. Capitalism advocates a free society functioning in a free economy following democratic ideals. Socialism aims to create an egalitarian society following the ideals of democracy and liberty.

Q.4. Is the Difference Between Communism Capitalism and Socialism reflected in economic progress?

Yes the Difference Between Communism Capitalism and Socialism is reflected in economic progress. Communist economies tend to stagnate while capitalist economies tend to progress. The growth in socialist economies depends on the level of flexibility to include capitalist programs.