Socialism and Communism

Business Economics

Nicholas Ali MBA I 35

Socialism
Social is an economic system which consists of social ownership of the means of production and co-operative management of the society. The goal of socialism was to create goods and services aimed for their utilitarian purposes and to allocate them to sectors of the economy which needed them most. Socialism also has different forms, three of the main forms are: a) Planned economy b) State-directed economy c) Market socialism

Communism
Communism is a form of government which focuses on creating a classless society where the capital or factors of production lie with the society or government as opposed to it being owned by private ownership as in a capitalist society. Communism also consists of its own social, economic and political ideologies to uphold this form of government.

Formation
Though the origins of communism are debatable it is generally accepted that modern communism was created by socialist Karl Marx. In his book, A Communist Manifesto Karl Marx along with Friedrich Engels, sought to create an end to the greed and tyranny of capitalism.

Features of Socialism and Communism

1. Resources

In both these economic systems the resources or means of production are owned by the public or by the government. They are not in the possession of private owners as in capitalist countries.

2. Decision Making The state or society in these economies decided how to produce these resources and in which sectors they should be utilised the most. Both these forms of government try to bring about or maintain the equality among all people living in the society.

3. Rationing Both these forms also believe in equal distribution of wealth. They use a form known as rationing, which dictates that each individual or family is entitled to a specific amount of supplies. It may be employed also to conserve economic resources and to reinforce price and production controls.

4. Equal Opportunity One of the major aspects of both socialism and communism is equal opportunity for all members of the society. Even the disadvantaged, exploited groups are given opportunities to work and earn unlike in a capitalist society where only preferred people may be employed.

Difference between Socialism and Communism

Though the two economic systems are radically similar there is but a slight difference between them. Communism in its own way is a stricter form of socialism. Socialism is the idea that the working class, the class that produces the profits, the wealth, the cars, houses, planes, should take over and run things collectively,

democratically, for the benefit of the majority (who also "just happen" to be workers too) Socialism is purely only an economic system. Whereas communism is the idea that society should not have classes - exploiters and exploited, oppressors and oppressed, and so on. Communism not only is an economic but also a political system which enforces the equity of citizens within the countrys borders. Socialism seeks to manage the economy through deliberate and collective social control. Communism seeks to manage both the economy and the society by ensuring that property is owned collectively, and that control over the distribution of property is centralized in order to achieve both classlessness and statelessness.

Transition from Communism to Socialism

1. Less Government Control If communist countries begin to ease the control over the economy and let the society begin to govern them, public enterprises will allocate resources just as the state did but taking away the authoritarian style of administration. 2. Communist Ideology Communist societies are also governed by its own ideology; if this ideology was slowly replaced with a more liberal, socialist one the countries would begin its progress towards a socialist way of life. 3. Political Aspect As communism also has its own political doctrine, the transition to socialism would be made much easier if the political factor of communist countries were removed and became even more democratic.