10 Differences Between communism and capitalism

Difference Between Communism and Capitalism

Communism and capitalism are two contrasting economic and political systems that have shaped the world in significant ways. Understanding their differences is crucial for comprehending the diverse ideologies that these systems represent. In this article, we will explore the concepts of communism and capitalism, provide examples of each system, highlight their uses, and present a comprehensive table differentiating them in various areas.

What is Communism?

Communism is a socio-economic ideology based on the principles of common ownership and the absence of social classes. In a communist system, all property and resources are owned and controlled by the community, with the aim of achieving social equality and eliminating exploitation. The government plays a prominent role in decision-making and distribution of resources.

Examples of Communism:

  • Soviet Union (1922-1991)
  • Cuba (since 1959)
  • China (since 1949)

What is Capitalism?

Capitalism is an economic and political system centered around private ownership of means of production, such as factories, businesses, and resources. In a capitalist society, individuals and businesses can freely pursue economic activities, and the market determines the allocation and distribution of resources. Competition and profit maximization are key driving forces.

Examples of Capitalism:

  • United States
  • United Kingdom
  • Germany

Differences Between Communism and Capitalism:

Differences between Communism and Capitalism
Difference Area Communism Capitalism
Ownership Collective ownership of resources and means of production Private ownership of resources and means of production
Economic System Planned economy Market economy
Wealth Distribution Equal distribution among the community Unequal distribution of wealth
Role of the State Strong state control and central planning Minimal state intervention
Innovation and Incentives Restricted incentives for innovation Strong incentives for innovation and entrepreneurship
Individual Liberty Subjugation of individual rights for the benefit of the community Emphasis on individual liberty and freedom
Consumer Choices Minimal consumer choices due to central planning Wide range of consumer choices
Class Structure Classless society with no social divisions Stratified society with social classes
Inequality Strives for social and economic equality Tolerates wealth inequality
Profit Motive Profit motive is discouraged Profit motive drives economic activities


Communism and capitalism differ in several fundamental aspects. While communism focuses on collective ownership, planned economies, and social equality, capitalism emphasizes private ownership, market economies, and individual freedom. These differences shape not only the economic systems but also the political and social structures of the societies that adopt them.

Knowledge Check:

  1. Which economic system has private ownership of resources?
  2. Answer: Capitalism

  3. In which country did communism exist from 1922-1991?
  4. Answer: Soviet Union

  5. Which economic system has minimal state intervention?
  6. Answer: Capitalism

  7. Which economic system focuses on equal wealth distribution?
  8. Answer: Communism

  9. Which system tolerates wealth inequality?
  10. Answer: Capitalism

  11. In which economic system is profit motive discouraged?
  12. Answer: Communism

  13. Which economic system has a classless society?
  14. Answer: Communism

  15. Which system allows a wide range of consumer choices?
  16. Answer: Capitalism

  17. Which system emphasizes individual liberty and freedom?
  18. Answer: Capitalism

  19. Which economic system has strong incentives for innovation and entrepreneurship?
  20. Answer: Capitalism

Related Topics:

  • Comparison between Socialism and Capitalism
  • Main Features of a Planned Economy
  • Impact of Political Systems on Economic Growth

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