There are two basic types of command economy: socialism and communism. Beneath these two broad groups, many versions may exist that have a few different pieces. Socialism is the first type of command economy; communism is the second and more controlled of these types. Socialism carries the classic definition of government or authoritarian policies designed for groups rather than individuals. Communism relies on a state or authoritarian group to plan and control the entire economy from the collective ownership of resources and labor.
In short, socialism is communism light. Citizens or governments typically believe in a common good and attempt to create an environment that works toward this as an end goal. Individual choice and freedoms take a backseat to those of the entire group as a whole, such as all citizens within the country. A key point, however, is that citizens may still be able to make some choices or vote on political items in a socialist environment. Laws and regulations are set up in a manner, however, to benefit the group as a whole, restricting an individual’s ability to act on his or her own without group intervention.
An offshoot of standard socialism is democratic socialism. This command economy demands that both the economy and other social constructs be run to meet social needs rather than make profits. This is actually worse than standard capitalism as it sees profits as bad, a main theory of communism. Democratic socialism also attempts to put the working class ahead of others, such as business owners and entrepreneurs. Socialists that believe in this theory see capitalism as exploitation against those not making profit, which goes further down the road to communism.
Communism is the more serious planned economy between these two options. Here, the main theories force individuals to work under a strict authoritarian environment. Profits should not be a goal for those in business. The working class must be placed at a higher status than others as communist governments believe workers to be the most essential part of the economy. This command economy often has strict constructs that severely restrict individuals.
Two main purposes of communism are to create a classless society with no business cycles. All government actions and government employees work toward this goal in a communist society. The end result is to be a perfect command economy with little to no inflation or unemployment. It is often difficult to achieve these goals in a communist command economy.