Capitalism is a political system in which individuals own all the property that isn’t required for the government. The government’s basic function consists in ensuring individual freedom and property rights, and enforcing contracts. The government could be democratic or not. In history, capitalist countries have included democratic and non-democratic regimes, but most have been democratic.
Socialism is a political system in which the state owns all the property. That state could be democratically controlled, but need not be. In history, most socialist societies were not democratic.
Communism is an ideal social system put forward by Karl Marx. As other posters have noted, communism is supposed to exist when production is so abundant there is no need for ownership, contracts, or pay. This idea violates one of the basic principles of economics, which is that human wants are unlimited and some resources are always scarce.
In common parlance, “Communism” is often used to refer to totalitarian socialism, such as that of the Soviet Union, Maoist China, Castroist Cuba, and North Korea. These countries severely limited private property. The state or workers’ communes owned most of the property. The ruling parties in those countries called themselves “Communist,” so the name has stuck.
All economies in the world today are a mix of capitalism and socialism. No country bans all forms of private property, and no country embraces laissez-faire capitalism in the sense classical liberals advocate. China, though ruled by a Communist Party, is not strongly socialist now.
MBC / Mudasir Bedar Chandio
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