Capitalism vs Socialism vs Communism[1] The differences between capitalism vs socialism vs communism may be summarized as follows: Capitalism is an informal economic system in which property is largely privately owned, and in which profit provides incentive for capital investment and the employment of labor. Socialism is a formal economic system in which society exerts considerable control over the nation's wealth and property in the pursuit of social justice. Communism is a formal economic system in which property, particularly capital property (e.g. factories, machines, tools, etc.), is commonly owned and scarce resources are allocated through planning as opposed to price signals in a free market. [2] The three economic systems have the following characteristics:
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