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This refers to a social system in which there is a common ownership of the means of production and distribution. This theory was first propounded by Karl Marx and Friedrich Engels, and later interpreted by Lenin and became known as Marxism-Leninism. The theory is based on the concept of class struggle within the society. According to Karl Marx, a class is a group of persons holding a particular position in the process of production. He argued that there are two classes. The first is those who own the means of production (Capital) and exploit the workers who are their employees. They are called Bourgeoisie. The second class is those who operate the means of production but do not own them. They are called the exploited class or the proletariats.

Marx explains that there is always hostility and struggle between these two classes which in the long run will end up in victory for the proletariat class. After their victory, the proletariat will set up the dictatorship of the proletariat. Communism advocates the abolition of private property and rejects liberal democratic ideas of freedom, justice and equality and claims that these ideals are meaningless where there is exploitation.

Principles of Communism

(a) The Materialistic Interpretation of History
The foundation of Communism is the belief that the mode of production in material life determines the general character of social, political and spiritual processes of life. In the social production which men carry out, they enter into definite relations that are indispensable and independent of their will. These relations of production correspond to a definite stage of development of their material power of production. The sum total of these relations of production is the economic structure of society – the real foundation on which legal and political superstructures develop.

(b) The Class War
Since the establishment of private property, society has been divided into two hostile economic classes. The capitalist class which derives its income mainly from the ownership of property is antagonistic to the interest of the proletariat class that depends chiefly upon the sale of its labour power.

(c) The Theory of Surplus Value
The primary reason for this antagonism is that the capitalist class, through its ownership and control of the means of production, is able to appropriate the surplus value which is created by labour. The surplus value arises because labour produces value above the cost of tools, raw materials and the cost of its own subsistence. The modern State is like a tool in the hands of the capitalist class to protect it from rebellion by the workers who suffer from this process of exploitation.

(d) A Social Revolution
This is inevitable because the future development of capitalism will take the form of the concentration of capital in fewer hands, while at the same time, there will be the ever closer and more elaborate organisation of the proletariat. At its climax, the proletariat will arise, overthrow the capitalist class and expropriate them of the means of production.

(e) The Dictatorship of the Proletariat
The dominant class will not, however, give up comfort and power without a severe struggle. To stabilise the result of the revolution, therefore, a dictatorship of the dominant class (the proletariat), will confiscate all private capital, organise labour, compel all to work, centralise credit and finance, establish state factories, concentrate means of transport and speed up production. The road to socialism has therefore gone through a period of the highest possible intensification of the State.

(f) Ultimately, the State will Wither Away
After capitalism is completely destroyed, the State is unnecessary, for there will no longer be any capitalists, for whose protection it now exists. Therefore it will wither away. In the opinion of Engles, society will banish the whole State machine to a place which will then be the most proper one for it, the museum of antiquities.

(g) Reorganisation of the Society
The new society will be organised on the principle of from each according to his capacity to each according to his needs. Each man will contribute to the social wealth by his labour as much as he can and will take from it what he needs.