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Communism vs. Capitalism: What's the Difference?

Edited by Huma Saeed || By Sumera Saeed || Updated on October 18, 2023
Communism emphasizes collective ownership of means of production; capitalism prioritizes individual and corporate ownership.

Key Differences

Communism is a socio-economic system in which there's collective ownership of the means of production. Within this system, property and resources are owned communally, and the goods produced are distributed based on need. Capitalism, on the other hand, is characterized by private ownership of the means of production. In this system, goods and services are produced for profit, and individuals and businesses operate in a competitive market environment.
Sumera Saeed
Oct 18, 2023
In communism, the goal is to achieve a classless society where everyone has equal access to resources and opportunities. The distribution of wealth and resources is determined by communal decisions, often guided by the principle “from each according to his ability, to each according to his need”. Capitalism, in contrast, operates on the principle of individual initiative and reward. Success and wealth in capitalism are often linked to individual effort, innovation, and the mechanisms of supply and demand.
Sumera Saeed
Oct 18, 2023
Under communism, central planning by the state or community often determines production decisions and resource allocation. This central planning is aimed at meeting the needs of the populace rather than maximizing profit. In capitalism, decision-making is decentralized, and businesses and individuals make choices based on their own interests, with market forces guiding resource allocation.
Sumera Saeed
Oct 18, 2023
Communism often posits that it counters the exploitative nature of capitalism, where the labor of many benefits the few. In its ideal form, it seeks to eliminate socioeconomic disparity. Capitalism, while it can lead to economic disparities, is often defended on the grounds of fostering innovation, efficiency, and individual freedom, allowing for upward mobility based on merit.
Harlon Moss
Oct 18, 2023
While communism seeks to establish a common ownership and egalitarian society, capitalism thrives on competition and the pursuit of individual or corporate interests. Both systems have their strengths and weaknesses, and their successes and challenges often depend on their implementation in specific contexts.
Harlon Moss
Oct 18, 2023
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Comparison Chart

Ownership

Collective ownership of means of production
Private or corporate ownership
Sumera Saeed
Oct 18, 2023

Economic Driver

Need-based distribution
Profit motive
Sumera Saeed
Oct 18, 2023

Decision Making

Centralized planning
Decentralized, market-driven
Sumera Saeed
Oct 18, 2023

Wealth Distribution

Egalitarian, based on need
Based on individual/corporate success
Janet White
Oct 18, 2023

Incentive

Collective welfare
Individual profit and achievement
Sumera Saeed
Oct 18, 2023
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Communism and Capitalism Definitions

Communism

A system where property is publicly owned and goods are distributed based on need.
In communism, factories are owned by the community rather than private individuals.
Huma Saeed
Oct 18, 2023

Capitalism

An economic system characterized by private ownership of the means of production.
Under capitalism, businesses aim to maximize profit.
Huma Saeed
Oct 18, 2023

Communism

A political movement seeking to establish a society based on communal ownership.
Communism gained traction in the 20th century, influencing several nations.
Janet White
Oct 18, 2023

Capitalism

An ideology emphasizing individual initiative and market competition.
Capitalism allows entrepreneurs to innovate and compete.
Janet White
Oct 18, 2023

Communism

A doctrine advocating for the abolition of private property.
Communism opposes the capitalist notion of private property rights.
Aimie Carlson
Oct 18, 2023

Capitalism

A socio-economic model where success is often based on merit and market performance.
In capitalism, hard work and innovation can lead to increased wealth.
Sumera Saeed
Oct 18, 2023

Communism

A socio-economic model emphasizing state control over resources and industries.
Under communism, major industries are often nationalized.
Aimie Carlson
Oct 18, 2023

Capitalism

A system where production and distribution are driven by supply and demand.
Capitalism thrives on the principles of a free market.
Sara Rehman
Oct 18, 2023

Communism

An ideology promoting a classless society with collective ownership of production means.
Communism aims to eliminate the division between the rich and the poor.
Janet White
Oct 18, 2023

Capitalism

A doctrine advocating for the rights of private property and free enterprise.
Capitalism encourages private investment and business ventures.
Harlon Moss
Oct 18, 2023

Communism

A theoretical economic system characterized by the collective ownership of property and by the organization of labor for the common advantage of all members.
Sumera Saeed
Jun 27, 2015

Capitalism

An economic system in which the means of production and distribution are privately or corporately owned and development occurs through the accumulation and reinvestment of profits gained in a free market.
Sumera Saeed
Jun 27, 2015

Communism

A system of government in which the state plans and controls the economy and a single, often authoritarian party holds power, claiming to make progress toward a higher social order in which all goods are equally shared by the people.
Sumera Saeed
Jun 27, 2015

Capitalism

(politics) A socio-economic system based on private ownership of resources or capital.
Sumera Saeed
Jun 27, 2015

FAQs

What's the primary focus of communism?

Communism emphasizes collective ownership and the equitable distribution of resources.
Sumera Saeed
Oct 18, 2023

What drives production in capitalism?

Profit and market demand primarily drive production in capitalism.
Sara Rehman
Oct 18, 2023

Are there classes in communism?

Communism aims to achieve a classless society.
Sumera Saeed
Oct 18, 2023

How does capitalism approach ownership?

Capitalism prioritizes private or corporate ownership of means of production.
Huma Saeed
Oct 18, 2023

Are resources nationalized under communism?

In many communist systems, major resources and industries are nationalized.
Aimie Carlson
Oct 18, 2023

What role does the state play in communism regarding the economy?

In communism, the state often has a central role in planning and controlling the economy.
Sumera Saeed
Oct 18, 2023

What's the role of the market in capitalism?

In capitalism, the market guides resource allocation and production based on supply and demand.
Harlon Moss
Oct 18, 2023

Can communism exist without state intervention?

While communism aims for a stateless society, in practice, many communist states have had strong state intervention.
Aimie Carlson
Oct 18, 2023

What's the incentive for businesses in capitalism?

The primary incentive for businesses in capitalism is profit.
Sumera Saeed
Oct 18, 2023

How is wealth distribution handled in communism?

Wealth and resources are distributed based on communal decisions and needs.
Sumera Saeed
Oct 18, 2023

How does capitalism foster innovation?

Capitalism provides incentives for individuals and businesses to innovate for profit.
Sumera Saeed
Oct 18, 2023

Is private property allowed in communism?

Communism generally opposes the notion of private property, advocating for communal ownership.
Sumera Saeed
Oct 18, 2023

How do communists view capitalists?

Communists often view capitalists as exploiting workers for profit.
Sumera Saeed
Oct 18, 2023

How does capitalism reward individuals?

Capitalism rewards individuals based on effort, innovation, and market success.
Sara Rehman
Oct 18, 2023

Can capitalism lead to economic disparities?

Yes, capitalism can lead to economic disparities based on individual or corporate success.
Janet White
Oct 18, 2023

How does capitalism view individual rights?

Capitalism often emphasizes individual rights, especially concerning property and enterprise.
Aimie Carlson
Oct 18, 2023

Why do some advocate for communism?

Some advocate for communism as a solution to socioeconomic disparities and exploitation.
Sara Rehman
Oct 18, 2023

Is competition encouraged in capitalism?

Yes, capitalism thrives on competition and individual initiative.
Sara Rehman
Oct 18, 2023
About Author
Written by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

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