Capitalism is a social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its result is the free-market.
What is the difference between socialism and communism?
Socialism and communism are alike in that both are systems of production for use based on public ownership of the means of production and centralized planning. Socialism grows directly out of capitalism; it is the first form of the new society. Communism is a further development or "higher stage" of socialism.
From each according to his ability, to each according to his deeds (socialism). From each according to his ability, to each according to his needs (communism).
The socialist principle of distribution according to deeds— that is, for quality and quantity of work performed, is immediately possible and practical. On the other hand, the communist principle of distribution according to needs is not immediately possible and practical—it is an ultimate goal.
Obviously, before it can be achieved, production must reach undreamed of heights—to satisfy everyone’s needs there must be the greatest of plenty of everything. In addition, there must have developed a change in the attitude of people toward work—instead of working because they have to, people will work because they want to, both out of a sense of responsibility to society and because work satisfies a felt need in their own lives.
Socialism is the first step in the process of developing the productive forces to achieve abundance and changing the mental and spiritual outlook of the people. It is the necessary transition stage from capitalism to communism.
It must not be assumed, from the distinction between socialism and communism, that the political parties all over the world which call themselves Socialist advocate socialism, while those which call themselves Communist advocate communism. That is not the case. Since the immediate successor to capitalism can only be socialism, the Communist parties,-like the Socialist parties, have as their goal the establishment of socialism.
Are there, then, no differences between the Socialist and Communist parties? Yes, there are.
The Communists believe that as soon as the working class and its allies are in a position to do so they must make a basic change in the character of the state; they must replace capitalist dictatorship over the working class with workers’ dictatorship over the capitalist class as the first step in the process by which the existence of capitalists as a class (but not as individuals) is ended and a classless society is eventually ushered in. Socialism cannot be built merely by taking over and using the old capitalist machinery of government; the workers must destroy the old and set up their own new state apparatus. The workers’ state must give the old ruling class no opportunity to organize a counter-revolution; it must use its armed strength to crush capitalist resistance when it arises.
The Socialists, on the other hand, believe that it is possible to make the transition from capitalism to socialism without a basic change in the character of the state. They hold this view because they do not think of the capitalist state as essentially an institution for the dictatorship of the capitalist class, but rather as a perfectly good piece of machinery which can be used in the interest of whichever class gets command of it. No need, then, for the working class in power to smash the old capitalist state apparatus and set up its own—the march to socialism can be made step by step within the framework of the democratic forms of the capitalist state.
The attitude of both parties toward the Soviet Union grows directly out of their approach to this problem. Generally speaking, Communist parties praise the Soviet Union; Socialist parties denounce it in varying degrees. For the Communists, the Soviet Union merits the applause of all true believers in socialism because it has transformed the socialist dream into a reality; for the Socialists, the Soviet Union deserves only condemnation because it has not built socialism at all—at least not the socialism they dreamed of.
Instead of wanting to take away people’s private property, socialists want more people to have more private property than ever before.
There are two kinds of private property. There is property which is personal in nature, consumer’s goods, used for private enjoyment. Then there is the kind of private property which is not personal in nature, property in the means of production. This kind of property is not used for private enjoyment, but to produce the consumer’s goods which are.
Socialism does not mean taking away the first kind of private property, e.g. your suit of clothes; it does mean taking away the second kind of private property, e.g. your factory for making suits of clothes. It means taking away private property in the means of production from the few so that there will be much more private property in the means of consumption for the many. That part of the wealth which is produced by workers and taken from them in the form of profits would be theirs, under socialism, to buy more private property, more suits of clothes, more furniture, more food, more tickets to the movies.