Karl Marx, a 19th-century political philosopher and a father of communism, believed that socialism was a natural outgrowth of capitalism. In effect, he believed that the drive for profits would lead capitalists to exploit workers in the lower classes, and these workers would rise up and establish a more egalitarian society. While the distinction between socialism and communism is often debated, in general, communism is often considered a higher and more advanced form of socialism.
Commonalities of Socialism and Communism
Socialism and communism are both economic systems in which the public owns the means of production. The means of production include the raw materials and means of labor, such as machines and tools, used in production processes. Under both systems the state also engages in centralized planning; in a planned or command economy, business activities and resource allocation are controlled by the state, ostensibly for the greater good.
The First Step
Vladimir Lenin, who led the Bolshevik Revolution in Russia in 1917, saw communism as a "higher stage" of socialism. Socialism, in this line of thinking, was the first step toward a new society after the inevitable collapse of capitalism. Eventually socialism, considered a first, necessary step, would develop into communism. It is important to note that the United States, like nearly all modern capitalist economies, contains some elements of socialism, including public schools, Social Security benefits and public works projects -- collectivist services that are run by the state, not the free market. The difference between capitalist and socialist economies is often not binary, but rather one of degree.
In a socialist economy, the state owns and controls the common property and the resources that drive the economy. The distribution of resources is not conducted necessarily according to one's need, but instead one's deeds -- the quality and quantity of work performed. A socialist state does not control personal private property (i.e., the clothes you choose to wear or goods you consume for enjoyment), though it would confiscate private property, such as a factory, that is not meant for personal use but rather to manufacture products. In the words of Leo Huberman and Paul Sweezy, founding editors of the socialist magazine "Monthly Review," "[Socialism] 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." In essence, socialism advocates for a redistribution of wealth toward the workers and away from the capitalists, thus giving the lower classes more freedom and resources to do as they please.
Whereas socialism features state ownership of property, communism refers to community ownership of the means of production, with each man entitled to the value his labor provides, which ultimately leads to absolute social and economic equality. This equality is seen as the end that has, throughout the 20th century, been used to justify authoritarian and totalitarian regimes. A key difference is that communism requires a change in people's mindsets and morality to embrace egalitarianism, while socialism affects only economic systems and avoids the moral sphere.