What is the difference between communism and socialism? | Investopedia
In theory, socialism and communism sound appealing, with everyone doing their share and working together to provide for the greater good. Each utilizes a planned production schedule to ensure the needs of all community members are met. They are utopian economic structures that some countries have tried; however, most have failed or become dictatorships, making reform nearly impossible.
In a communist society everything is owned by the working class and everyone works toward the same communal goal. There are no wealthy and poor classes. Instead, all are equal. Production from the community is distributed based upon need, not by effort or amount of work. It is expected that basic needs for each worker are met by the community, and there is no more to be obtained through working more than what is required. For example, if a worker puts in more time at work, he sees no additional reward, and production is minimally affected. The worker receives the same stipend and ration as before. Therefore, this type of economy often results in poor production, mass poverty and little advancement. This occurred in the 1980s to the Soviet Union when poverty became so widespread, and rebellions and revolutions caused a dissolution of the nation.
Socialism shares similarities to communism but to a lesser extreme. As in communism, equality is the main focus. Instead of the workers owning the facilities and tools for production, workers are paid and allowed to spend their wages as they choose, while the governing body owns and operates the means of production for the benefit of the working class. Each worker is provided with necessities so he is able to produce without worry for his basic needs. Still, advancement and production are limited because there is no incentive to achieve more. Without motivation to succeed, such as the ability to own an income-producing business, workers' human instincts prohibit drive and desire that is produced through such incentives.
Both communism and socialism are near opposites of capitalism, with no private ownership and class equality. In capitalism, reward comes naturally without limitation to workers who exceed the normal minimums. When there is excess production, the owner can freely keep it, and he has no obligations to share his spoils with anyone else. A capitalist environment facilitates competition, and the result is unlimited advancement opportunity.