Communism is a revolutionary movement which aims to create a classless and stateless society based on common ownership of assets, specifically including the means of production (capital goods and land).

According to M. A. Mannan in Islamic Economics Theory and Practice, communism is based upon three doctrines: a) the natural order, an essentially utopian ideal of how the world should be; b) Manichaeism, the view of human history as a struggle between good and evil forces, and; c) Marxism, the theory that economic forces determine the social and political structure of society.

Communists believe in a labour theory of value in which the price of any given asset reflects the amount of labour included in it. Since capitalists make a profit when selling such assets, communist thinkers propose that workers are paid less than the value which they contribute to them. The difference between the value that labourers produce and the amount they are paid is termed "surplus value" and it is this amount which the capitalists take for themselves. This is seen as a form of exploitation, hence the opposition of communist thinkers to the capitalist class.

One problem resulting from the existence of surplus value is that workers do not have sufficient money to buy the goods which they produce for the capitalists. Hence, capitalists will in the long run be caught in a process of trying to out-compete one another for the purchasing power held by the workers. This effort entails investment in ever greater amounts of capital which allow more efficient production processes and hence lower sale prices to be offered, while maintaining a sufficient amount of profit. For this reason and others, it is held that capitalism is eventually unable to sustain itself, and will go through increasingly severe cycles of boom and bust as capital concentrates in the hand of the capitalists.

Marx and his contemporary Engels argued that communism would usually arise from the break down of capitalism in two phases, a first phase in which most productive assets are owned in common and some class differences remain, followed by a second phase in which class differences disappear and the state no longer needs to exist. People would then order their productive efforts and affairs to satisfy their needs on a local level.

Lenin proposed that a vanguard is needed to lead the workers (the proletariat) since the latter is unable to organise itself effectively to overthrow the capitalist class. He believed that lower phase communism is the same as socialism, a milder form of economic organisation in which some private ownership is permitted. Indeed, following the Russian civil war and the nationalisation of much of the economy, Lenin's New Economic Policy in 1921 gave a limited place to capitalist business operations for a limited period.

After the death of Lenin, Stalin forced a program of collectivisation on rural farmers during the period 1928 - 1940. During this time, it is believed that more than ten million Russians died as grain production plummeted. Rural farms were amalgamated into communally owned operations and the commercial incentive for farmers to produce grain largely disappeared. Much of what was produced was taken for consumption in the cities with little or no payment. Government authored five year plans took little heed of market forces and the desires of citizens, hence productive effort was often misdirected. Public morale further weakened as political oppression grew at the hands of state police and bureaucrats.

In China, Mao Zedong implemented communist ideology following his victory in the 1949 revolution. His "Great Leap Forward" (1958-61) was an effort to industrialise and collectivise the economy at speed. It led to the deaths of between 18 and 45 million people as economic productivity collapsed under inappropriate central directives. Mao's "Cultural Revolution" between 1966 and 1976 followed the political setback of the Great Leap Forward, and aimed to enforce communism by removing anti-communist cultural elements from Chinese society. This period resulted in a widespread destruction of social, literary and educational institutions. During this time Mao increasingly criticised the Soviet Union for having diluted the principles of the communist revolution.