Answer:
Economies can be formal or informal, and economic activity can occur in various economic systems. Adam Smith is credited with formalizing capitalism in his 1776 book, The Wealth of Nations. ... Socialism and communism emphasize the public ownership of the means of production and public reallocation of wealth.
Explanation:
Socialists with more radical views believe that socialism will evolve into what they see as a more advanced system: communism, with no state, money, hierarchy or social classes whatsoever.[source?] In Marxist theory, socialism is a temporary social state between capitalism and communism, although some socialists have no intention of transitioning to communism.[source?]
Many label these economic theories into one as "communism" when they mean the Marxist and Leninist ideas and beliefs of Russia's Bolshevik party. Marx believed that capitalism followed the economic and political system of feudalism. He also believed that capitalism would unfairly treat many people and that those people would eventually revolt and switch to socialism. He also thought that socialism could be another bridge on a path to communism. However, many people incorrectly use the term "Communist" to refer to a socialist state as a pejorative insult. Others call this 'State Socialism,' to distinguish it from the communist goal that does not need a state or any form of government. To non-communists, the word 'socialism' is now used mostly for attempts to come close to this goal in a democratic state.
