It is important to realize that socialism or communism, as an economic system, does not necessarily describe a form of government. In communism, the government has total control over production and distribution of goods and of all resources, which are shared evenly among society. Communism describes a comprehensive economic and political system whereby the state owns all the property and means of production; markets do not have any authority to regulate prices or to decide what is to be produced. In economics, Communism calls for government to control all capitals and industry within the state, seeking to eliminate economic inequality.
Like communists, socialists and communists argue that workers should control most of the means of production, rather than being ruled by free markets and the capitalist class. A nation may be capitalist and socialist at the same time, since capitalism means a free market, which, unlike communism, is in charge of setting prices and modes of production. Such countries may be classified as communist, because, in both, a central government controls every aspect of the economic and political system.
However, in a communist society, the government is controlled by one political party, and political dissent is not tolerated. As a governing system, the political regimes accompanying a communist economic system, as in China, generally focus on one-party rule, which prohibits most forms of political dissent.
Although on their surface, democratic and communist political systems appear to share the peoples power philosophy, in practice, these two systems of governance structure the economic and political structures of societies very differently. Severe political changes have led to government changes ten times over the last ten years, and during this time, both communist parties expanded rapidly in political support, and then won successive elections at the national and state levels.
The communists quickly established Peoples Democracies in Poland, Hungary, Romania, Bulgaria, Yugoslavia, Albania, and Czechoslovakia. After the Second World War, Communism spread across Central and Eastern Europe, and the Peoples Republic of China was established by the Communist Party of China in 1949. By 1948, the Communists had taken control of eight Eastern European governments, always in the background, thanks to the Red Army of the Soviet Union.
With the economic and political death of Soviet-style communism, most of the Soviet-backed Communist regimes around the world, such as in Ethiopia, Afghanistan, and southern Yemen, collapsed as well. The Soviet bloc just quietly (at least in Europe) disappeared into thin air, leaving communism as a political and economic system gone in most of the world. Today, communism exists in China, Cuba, North Korea, Laos, and Vietnam — though, really, there has never been such a thing as a pure Communist state.
Only in communist societies, when the capitalist opposition has disappeared, when classes do not exist (i.e., when there is no difference among members of society with respect to their relationship with social means of production), then only then does the state… end, and it becomes possible to speak about freedom. In fact, under communism and socialism, when the distinction between a working and an owning class has been erased, liberty and democracy may thrive; yet, a mass redistribution of wealth will occur. The emergence of socialism, or a lower phase of communism, supposedly will bring about a higher, fuller form of democracy, one that embraces civil society in addition to the state, and puts the gratification of human needs ahead of the quest for private profit.
What is commonly called socialism was described by Marx as the first, or lower, stage of communist society. According to German philosopher Karl Marx, socialism is the necessary intermediate stage between capitalism and an ideal communist economy.
Lenin and the Bolsheviks saw the Soviet Union as the main unit organizing society within the communist system, and supported that form of democracy. Under the influence of the First World War and the Bolshevik Revolution, the international socialist movement divided into two antagonistic camps, subsequently known as the Social Democrats and Communists, the former committed to electoral-legislative politics within a framework of liberal democracy, and the latter dedicated to the defense of the Soviet Union and to promoting a worldwide revolution.