From here.

The upheavals in Eastern Europe did not constitute a defeat for socialism because socialism never existed in those countries, according to some U.S. leftists. They say that the communist states offered nothing more than bureaucratic, one-party “state capitalism” or some such thing. Whether we call the former communist countries “socialist” is a matter of definition. Suffice it to say, they constituted something different from what existed in the profit-driven capitalist world–as the capitalists themselves were not slow to recognize.

First, in communist countries there was less economic inequality than under capitalism. The perks enjoyed by party and government elites were modest by corporate CEO standards in the West [even more so when compared with today’s grotesque compensation packages to the executive and financial elites.—Eds], as were their personal incomes and lifestyles. Soviet leaders like Yuri Andropov and Leonid Brezhnev lived not in lavishly appointed mansions like the White House, but in relatively large apartments in a housing project near the Kremlin set aside for government leaders. They had limousines at their disposal (like most other heads of state) and access to large dachas where they entertained visiting dignitaries. But they had none of the immense personal wealth that most U.S. leaders possess. {Nor could they transfer such “wealth” by inheritance or gift to friends and kin, as is often the case with Western magnates and enriched political leaders. Just vide Tony Blair.—Eds]

The “lavish life” enjoyed by East Germany’s party leaders, as widely publicized in the U.S. press, included a $725 yearly allowance in hard currency, and housing in an exclusive settlement on the outskirts of Berlin that sported a sauna, an indoor pool, and a fitness center shared by all the residents. They also could shop in stores that carried Western goods such as bananas, jeans, and Japanese electronics. The U.S. press never pointed out that ordinary East Germans had access to public pools and gyms and could buy jeans and electronics (though usually not of the imported variety). Nor was the “lavish” consumption enjoyed by East German leaders contrasted to the truly opulent life style enjoyed by the Western plutocracy.

Second, in communist countries, productive forces were not organized for capital gain and private enrichment; public ownership of the means of production supplanted private ownership. Individuals could not hire other people and accumulate great personal wealth from their labor. Again, compared to Western standards, differences in earnings and savings among the populace were generally modest. The income spread between highest and lowest earners in the Soviet Union was about five to one. In the United States, the spread in yearly income between the top multibillionaires and the working poor is more like 10,000 to 1.

Third, priority was placed on human services. Though life under communism left a lot to be desired and the services themselves were rarely the best, communist countries did guarantee their citizens some minimal standard of economic survival and security, including guaranteed education, employment, housing, and medical assistance.

Fourth, communist countries did not pursue the capital penetration of other countries. Lacking a profit motive as their motor force and therefore having no need to constantly find new investment opportunities, they did not expropriate the lands, labor, markets, and natural resources of weaker nations, that is, they did not practice economic imperialism. The Soviet Union conducted trade and aid relations on terms that generally were favorable to the Eastern European nations and Mongolia, Cuba, and India.

All of the above were organizing principles for every communist system to one degree or another. None of the above apply to free market countries like Honduras, Guatemala, Thailand, South Korea, Chile, Indonesia, Zaire, Germany, or the United States.