Is a Political-Economic Distinction Between Socialism and Communism Necessary?

3-31-09, 10:59 am

In dealing with the current financial crisis, the US government is acquiring shares of financial and other corporations to which it is providing bailout funds. The press has been raising the specter that these actions are moving the United States toward socialism. In this connection, a discussion of what constitutes socialism is in order. On another plane, the introduction of mixed market economies in China and Vietnam raises the question of the political-economic character of such economic systems with a large state sector, but an even larger capitalist sector. Are these countries socialist?

I will begin by discussing the use of the terms socialism and communism in Marxist literature and then turn to some questions about the socioeconomic transformation from capitalism to communism.

According to the Oxford Dictionary of English Etymology, the term socialist was first used in 1827 by the utopian socialist Robert Owen and socialism (in French) in 1832. The terms communist and communism were first used by the utopian communist Étienne Cabet (in French) in 1839. A differentiation between the terms socialism and communism rapidly took place. The term socialism was associated with a movement for the gradual transformation of the means of production into cooperative property and an artisan type of ownership. The term communism was associated with the revolutionary transformation of the means of production and other private property into property of the society, subsuming therefore the very concept of property – such was the character of what can be considered to be the first modern communist movement, the “Conspiracy of the Equals,” which arose in the wake of the French Revolution under the leadership of Gracchus Babeuf (executed in 1797). Although projecting the abolition of property and money, and distribution based on need, Babeuf’s movement ignored the need for the development of the productive forces as a precondition for the introduction of communist social relations.

In his preface to the 1888 English edition of the Communist Manifesto, Engels commented that when it was written, we could not have called it a Socialist Manifesto. By Socialists, in 1847, were understood, on the one hand the adherents of the various Utopian systems: Owenites in England, Fourierists in France, both of them already reduced to the position of mere sects, and gradually dying out; on the other hand, the most multifarious social quacks who, by all manner of tinkering, professed to redress, without any danger to capital and profit, all sorts of social grievances, in both cases men outside the working class movement, and looking rather to the “educated” classes for support. Whatever portion of the working class had become convinced of the insufficiency of mere political revolutions, and had proclaimed the necessity of total social change, called itself Communist. It was a crude, rough-hewn, purely instinctive sort of Communism; still, it touched the cardinal point and was powerful enough amongst the working class to produce the Utopian Communism, in France, of Cabet, and in Germany, of Weitling. Thus, Socialism was, in 1847, a middle-class movement, Communism a working-class movement. Socialism was, on the Continent at least, “respectable,” Communism was the very opposite. And as our notion, from the very beginning, was that “the emancipation of the workers must be the act of the working class itself,” there could be no doubt as to which of the two names we must take. Moreover, we have, ever since, been far from repudiating it (1990a, 516–17) Insofar as one can speak about a distinction between the socialists and communists in the 1840s, a critical point of difference is their understanding of the nature and role of the state. The communists viewed the state as a class instrument of force, the social function of which is to maintain the stability of the property relations, while the socialists treated the state as an above-class institution. The communists, therefore, saw the state vanishing as property relations themselves vanish. Engels later put it this way: As soon as there is no longer any social class to be held in subjection; as soon as class rule, and the individual struggle for existence based upon our present anarchy in production, with the collisions and excesses arising from these, are removed, nothing more remains to be repressed, and a special repressive force, a state, is no longer necessary. The first act by virtue of which the state really constitutes itself the representative of the whole of society – the taking possession of the means of production in the name of society – this is, at the same time, its last independent act as a state. State interference in social relations becomes, in one domain after another, superfluous, and then dies out of itself; the government of persons is replaced by the administration of things, and by the conduct of processes of production. The state is not 'abolished'. It dies out. (1987, 268) In addition to the terms socialism and communism, one more term merits attention here – social democracy, since in 1848 the socialist political leader Ledru-Rollin called, for the radical republicans and socialists to “rally round the principles of social democracy” (cited in Beecher 2001, 228). The term appeared again in the aftermath of an uprising in Baden in 1949 (Billington 1998, 371). Although August Bebel and Wilhelm Liebknecht were closer to Marx than to the Lassalleans, who referred to themselves as social democrats, the party of which they were the principal founders adopted the name Social Democratic Workers Party of Germany in Eisenach in 1869. Marx and Engels did not make an issue of it, but apparently they were not happy with the name. As Engels wrote in 1894, in a preface to a pamphlet of his articles that had been published in the organ of the Social Democratic Party of Germany, Volksstaat: It will be noted that in all these essays, and particularly in the aforementioned one, I consistently do not call myself a Social Democrat, but a Communist. This is because at that time in various countries people called themselves Social Democrats who had certainly not inscribed upon their banners the taking over by society of all the means of production. In France, a Social Democrat was conceived as a democratic republican with more or less genuine but always indefinable sympathies for the working class, that is people like Ledru-Rollin in 1848, and the Proudhonist-tinged “radical socialists” of 1874. In Germany, the Lassalleans called themselves Social Democrats; but although the mass of them increasingly appreciated the necessity of socializing the means of production, the specifically Lassallean production cooperatives with state aid nevertheless remained the only publicly recognized item on their agenda. For Marx and myself it was therefore quite impossible to choose a name of such elasticity to describe our special standpoint. Today the situation is different, and the word can be allowed to pass, unfitting as it remains for a party whose economic program is not just generally socialist, but directly communist, and whose ultimate political aim is to surpass the entire State, and thus democracy too. The names of real political parties never fit exactly; the party develops, but the name stays. (1990b, 417–18) In State and Revolution, Lenin, citing this statement by Engels, explained that this is why he had proposed changing the name of the party from the Russian Social Democratic Labor Party to the Communist Party. Elaborating on Engels’s assertion that the ultimate aim of a communist party is to “surpass the entire State, and thus democracy too (“surpass” – Überwinden in German, is also translated as “overcome”), Lenin wrote: At first sight this assertion seems exceedingly strange and incomprehensible; indeed, someone may even suspect us of expecting the advent of a system of society in which the principle of subordination of the minority to the majority will not be observed – for democracy means the recognition of this very principle.

No, democracy is not identical with the subordination of the minority to the majority. Democracy is a state which recognizes the subordination of the minority to the majority, i.e., an organization for the systematic use of force by one class against another, by one section of the population against another.

We set ourselves the ultimate aim of abolishing the state, i.e., all organized and systematic violence, all use of violence against people in general. We do not expect the advent of a system of society in which the principle of subordination of the minority to the majority will not be observed. In striving for socialism, however, we are convinced that it will develop into communism and, therefore, that the need for violence against people in general, for the subordination of one man to another, and of one section of the population to another, will vanish altogether since people will become accustomed to observing the elementary conditions of social life without violence and without subordination.

In order to emphasize this element of habit, Engels speaks of a new generation, “reared in new, free social conditions,” which will “be able to discard the entire lumber of the state” – of any state, including the democratic-republican state. (1964/1974b, 461)

In these quotations, we see the fundamental difference between social democrats and Communists. The social democrats, although initially committed to some degree of public ownership – a commitment that is now abandoned by most of the European social-democratic parties – view the state as a permanent institution moderating class relationships. They are not committed to the eventual elimination of both private ownership of the means of production and of a class-divided society.

Let us turn to Lenin’s statement, “In striving for socialism, however, we are convinced that it will develop into communism. ...” Here, we have a different distinction between socialism and communism, one that associates socialism with a transitional stage toward communism. A few pages later Lenin connects this with the two-stage process following the transfer of state power to the working class that he reads into Marx’s Critique of the Gotha Program, for several pages later, he writes, And so in the first phase of communist society (usually called socialism), “bourgeois law” is not abolished in its entirety, but only in part, only in proportion to the economic revolution so far attained, i.e., only in respect of the means of production. (472) The “bourgeois law” to which he is referring is the payment of wages to workers based on the quantity and quality of their labor. Although Marx and Engels understood that the revolutionary transfer of state power from the bourgeoisie to the working class would not immediately bring about a communist society, and that much time would be needed before the conditions matured to the point where the state would wither away, they never used the term socialism to signify a transitional stage that would begin upon the transfer of state power. The earliest example of such a distinction that I have found in Lenin’s Collected Works is in an article “On a Slogan for a United States of Europe” written in August 1915, some two years before State and Revolution. Reflecting the view current at the time that a socialist revolution could be sustained only if it embraced the entire capitalist world, he writes: A United States of the World (not of Europe alone) is the state form of the unification and freedom of nations which we associate with socialism – until the time when the complete victory of communism brings about the total disappearance of the state, including the democratic. (1964/1974a, 342) Despite his association of the term socialism with the first stages of transformation from capitalism to communism, Lenin, like Marx and Engels, used socialism interchangeably with communism as the general goal of working-class struggle. The name of Engels’s pamphlet Socialism: Utopian and Scientific” is an example of this.

Let us now turn to considering how we should be using the terms socialism and communism (as well as their adjectival forms) in describing the stages of transition toward communism in light of the history of previous attempts to bring this about.

Lenin’s State and Revolution was published August 1917, on the eve of the October Revolution. In line with the views of Marx and Engels, Lenin saw the process of transition to communism from capitalism in three stages. The first stage was a stage of revolutionary transformation in the course of which the working class seized state power in capitalist economies worldwide. The worldwide scope was seen as necessary since the capitalists could be expected to unite internationally to overthrow any national revolutionary government, as they did indeed do after the October Revolution in Russia. During this period of revolutionary transformation, the working class would consolidate its rule (dictatorship of the proletariat), and seize control of the means of production, abolishing all capitalist relations of production, thereby eliminating capitalists as a class. (In 1848, the call for “dictatorship of the proletariat” referred to the political rule of the proletariat, not to dictatorship as a political form, which is its negative connotation today.) Marx, Engels, and Lenin did not speculate on the duration of this period of consolidation. The two relevant paragraphs in the Communist Manifesto are: We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class, to win the battle of democracy.

The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total of productive forces as rapidly as possible. (1976, 504)
Completion of the centralization of all instruments of production in the hands of the state marks the beginning of the first phase of communist society, the starting point of Marx’s discussion in the Critique of the Gotha Program (1989); this first phase is what Lenin referred to as socialism.

When it became clear that socialist revolutions would not succeed worldwide, Lenin concluded that because of the contradictions of imperialism and different rates of economic development in the world, it would be possible proceed with the development of the socialist economy in Russia. In 1921, he introduced the New Economic Policy, which encouraged limited capitalist relations of production. Although the land was nationalized, the peasant families retained inheritable control over it as their principal means of production (although they could not sell it). Nevertheless, despite the existence of capitalist relations of production in the cities and towns and individual control over the means of production by the peasantry, what was now the Soviet Union was still considered to be a socialist country because state power was in the hands of the working class and the state and cooperative sectors dominated industrial and commercial activity. In 1936, with capitalist relations of production eliminated and peasants voluntarily and involuntarily organized into cooperatives, the Stalin declaration that the Soviet Union had completed the socialization of the economy was embedded into the Soviet constitution. After World War II, under the leadership of Communist parties, thirteen other countries embarked on the socialization of their economies – Albania, Bulgaria, China, Czechoslovakia, Cuba, the German Democratic Republic, Hungary, the Korean People’s Democratic Republic, Mongolia, Poland, Romania, Vietnam, and Yugoslavia. Although some continued to allow control over the land by individual peasant families and allowed individually owned small industrial and commercial enterprises (with very limited wage labor), these countries were considered to be socialist countries because of the overwhelming dominance of the state and cooperative sectors in the economy. All 14 countries adopted centralized planned economies, although Yugoslavia’s centralizing was looser because its industrial enterprises – operated more or less as worker cooperatives – were given more flexibility in managing their resources.

In late 1960s and early 1970s, the level of technological development in the Soviet Union and European socialist countries made it necessary for them interact increasingly with the world capitalist market. By the mid-1970s, their inability to maintain rates of technological development comparable to that of the developed capitalist countries put them at a disadvantage and led to increased internal stress in their economies. One of the first signs to the outside world of this situation was the vanishing of the statistics on infant mortality from the statistical yearbook published by the Soviet Union. Because of the intertwining of the economic and political systems of the other European socialist countries and Mongolia with the Soviet Union and each other, their socialist governments all collapsed with the implosion of the Soviet economy in 1989-1991.

Toward the end of the 1970s, China and Vietnam, alerted to the premature character of the centralized socialist planned economies (which also included agriculture), began to decollectivize their cooperative farms and communes and allow peasant families to cultivate land individually. They began the process of moving from a centrally planned socialized economy to a mixed economy with foreign and domestic capitalist sectors, state and cooperative sectors, and patriarchal agriculture.

In both China and Vietnam today, the domestic and foreign capitalist sectors exceed the state and cooperative sectors in industrial production. In both countries, however, the infrastructural elements of the economy and key elements of the industrial economy remain largely in the state sector. Key to the control of the direction of economic development is the effective state control of the credit system. Although capitalist entrepreneurs are permitted to be members of the Communist parties, their influence is greatly limited, so that the interests of the working class still dominate policies of the state. The long-term goal is to develop the productive capacity to the point where it becomes possible to undertake the transition to a communist society. They have no timetable for this process and its success will depend on the ability of the working class to maintain the dominance of its interests in the party and state.

Can one consider China and Vietnam to be socialist countries? Under the Marxist-Leninist political-economic theory that bore the stamp of Stalin, the entire means of production has to be in the state and cooperative sector before a country could be called socialist. In the practice of post-World War II Marxism-Leninism, a country with an overwhelmingly dominant state industrial and commercial sector, despite a large private agricultural sector, was considered a socialist country provided its state leadership maintained the goal of economic development that would lead to a fully communist society. In neither China or Vietnam are the state and cooperative sectors dominant, so that the latter extension of the political-economic concept of a socialist society cannot be applied to them. Apparently for this reason, the Communist Party of China refers to its system as “socialism with Chinese characteristics,” even though there is nothing specifically Chinese about the model. Its principal features can be adopted by other relatively underdeveloped countries. The Communist Party of Vietnam prefers to refer to the Vietnamese social system as “socialist-oriented.” In my view, this is the proper way to characterize a system with a mixed economy maintaining a goal of development toward a communist society.

Marx and Engels made a distinction when they needed to distinguish the communist movement from other currents that called themselves socialist. Lenin made the distinction in his scientific discussion of the lower and higher phases of communist society, because he, like Marx and Engels, assumed that socialization of nearly all of the means of production would follow closely upon the seizure of state power by the working class. He turned to the Critique of the Gotha Program, since Marx dealt with important theoretical issues the Bolsheviks would have to deal with if the factory-based soviets seized power and took control over the means of production.

Tetsuzo Fuwa, a prominent Japanese Communist leader, in his 2003 lecture Rereading “Critique of the Gotha Program”: Marx’s/Engel’s [sic] View of a Future Society” (published under the same title in book form in 2004) also indicated that Marx, Engels, and Lenin usually used the terms socialism and communism interchangeably. But he argues that Lenin placed undue emphasis on the Critique of the Gotha Program, noting that Marx, who died in 1873, had sent it privately only to a few key potential allies and never published the text in his lifetime. Engels published it fifteen years later in 1891 on the eve of the Erfurt Congress of the Social Democratic Party of Germany. He did so to forestall the adoption of the same programmatic material that Marx had criticized in the Gotha program in 1875 and which had been adopted then despite Marx’s criticism. Engels effort succeeded. The program adopted at the 1891 congress contained none of the elements that Marx had criticized. Fuwa stresses correctly that Marx and Engels always refrained from giving a blueprint for the process of transition from capitalism to communism. In criticizing the Gotha program, Marx was criticizing the blueprint that the Lassalleans were projecting, but was not providing a substitute blueprint. Nevertheless, Marx and Engels had always assumed that the seizure of power by the working class would first occur in the industrialized countries and that this would be followed by the socialization of the means of production. They never projected a decades-long period of transition to the full socialization of the means of production. On the eve of a revolution bearing the slogan “All Power to the Soviets,” Lenin could only assume that the socialization of the means of production would immediately follow a successful proletarian revolution in Russia. It was reasonable for Lenin to take Marx’s critique of the Gotha program as a guide for dealing with the question of distribution of the product of production. Even had Lenin put forward the New Economic Policy immediately after the October Revolution, Marx’s discussion of distribution based on the labor contributed by the worker to the production process would have still been applicable.

Fuwa’s main criticism is directed against Lenin’s depiction of the transition from capitalism to communism as a two-stage process following a revolutionary transfer of state power, assigning the term socialism to the first stage, which led to Stalin’s inscribing this two-stage process as the only correct path to communism.1 Obviously, such a two-stage process is not a meaningful description of a path to communism that includes a mixed economy on the scale of China or Vietnam. The Chinese and Vietnamese Marxists consider it premature to project at this time the way property relations will change in the process. Lenin, however, could not have considered the possibility of a mixed market economy on the scale of China and Vietnam. This scale has only been made possible by the globalization of the labor process so that now the production process is the result of labor processes that span continents. The technological developments involving information exchange, automation through computerization, and transportation that made globalized industrial operations possible did not exist at the time of the October Revolution. I can agree with Fuwa, therefore, that it is not appropriate to associate socialism with a lower phase of communist society. He prefers to refer to the future society by the combined term socialism/communism. I would contend, rather, that we should revert to the interchangeability of the terms socialism and communism in ordinary language, but use the term communism for the scientific designation of the future society.

We face a situation today similar to that confronted by Marx and Engels, with movements or persons that call themselves socialist. The US press often refers to some Scandinavian countries as socialist because of their developed social-welfare systems. Many progressives who work for the extension of basic human rights to include jobs at a livable wage, unionization, education, health care, decent housing, adequate pensions, and access to recreation and culture also consider themselves socialists. They cannot be called socialists if they limit their sight to capitalist society. Occasionally one even encounters the call for “overcoming capitalism” without any implication that this includes the elimination of capitalist relations of production. Communists also work to institutionalize these human rights under conditions of capitalism, but we continue to work toward a socialist transformation of society. There can be no meaningful call for socialism that abandons the goal of communism.

Communists, of course, will cooperate with all progressives, including those who consider themselves socialists without sharing political-economic understanding. In working for the extension of human rights under conditions of capitalism as outlined above, we are contributing to the development of the class consciousness and empowerment of the working class, so that with its allies, it can become a political force capable of ascending to state power.

University of Minnesota, Minneapolis


1. Another aspect of Fuwa’s criticism of the two-stage concept is that it places undue stress on the question of distribution in the process of transition to a communist society. According to Fuwa, basing the stages on the distribution of the products of production led to a “politically-motivated scaling down of the ideal of socialism and communism (2004, 87). He sees this as the source of the human repression in the Stalin period and also as detracting from the principal goal of reshaping human relationships. In my view, it was not the two-stage concept that was responsible for the scaling down of the ideal of socialism and communism, but the abandonment of the principles of party organization that Lenin had outlined in his What Is to Be Done? that led to the distortions that Fuwa has indicated. This abandonment led to the transformation of the Communist parties from serving as the guiding force and conscience of their nations to a bureaucratic apparatus for support of erroneous state policies of socioeconomic development.


Beecher, Jonathan F.. 2001. Victor Considerant and the Rise and Fall of French Romantic Socialism.Berkeley, CA: Univ. of California Press.

Billington, James H. 1998. Fire in the Minds of Men: Origins of the Revolutionary Faith. New Brunswick, NJ: Transaction Publications.

Engels, Frederick. 1987 Anti-Dühring: Herr Eugen Dühring’s Revolution in Science. In vol. 25 of Collected Works, by Karl Marx and Frederick Engels, 1–309. New York. International Publishers.

———. 1990a. Preface to the 1888 English Edition of the Manifesto of the Communist Party.In vol. 26 of Collected Works, by Karl Marx and Frederick Engels, 512–18. New York. International Publishers.

———. 1990b. Preface [to the Pamphlet Internationales aus dem “Volksstaat [1871–75]. In vol. 27 of Collected Works, by Karl Marx and Frederick Engels, 512–18. New York. International Publishers.

Fuwa, Tetsuzo, 2004. Rereading “Critique of the Gotha Program”: Marx’s/Engel’s View of a Future Society. Tokyo: Japanese Press Service.

Marx, Karl. 1989. Critique of the Gotha Programme. In vol. 24 of Collected Works, by Karl Marx and Frederick Engels, 75–99. New York: International Publishers.

Marx, Karl, and Frederick Engels. 1976. Manifesto of the Communist Party. In vol. 6 of Collected Works, by Karl Marx and Frederick Engels, 477–519. New York: International Publishers.

Lenin, V. I. 1964/1974a. Slogan for a United States of Europe. In vol. 21 of Collected Works, 339–43

———. 1964/1974b. State and Revolution. In vol. 25 of Collected Works. Reprint. Moscow, Progress Publishers.