As has been confirmed by the entire history of mankind, society develops from lower to higher stages. Communist society, which is the final aim of the struggle for emancipation of the working people in all lands, is the highest and most progressive stage of social development.
Communist society passes through two phases of development: the lower phase known as Socialism, and the higher phase known as Communism. In the first stage, communist society cannot as yet be free from the traditions and traces of capitalism, from whose womb it has emerged. Only the further development of socialism on the basis which it has itself created can lead to the second and higher phase of communist society. Consequently socialism and communism are two stages of maturity of the new communist form of society.
Social ownership of the means of production is the economic basis of both phases of communism. The predominance of social ownership determines the planned development of the national economy. Characteristic of both phases of communist society is the absence of exploiting classes and of the exploitation of man by man, of national and racial oppression. The purpose of production, both in socialist and in communist society, is the maximum satisfaction of the constantly increasing material and cultural requirements of the whole of society. The means of its achievement is the continuous growth and improvement of production on the basis of the highest techniques.
[...]
In a higher phase of communist society," wrote Marx, "after the enslaving subordination of individuals under division of labour, and therewith also the antithesis between mental and physical labour, has vanished; after labour, from a mere means of life, has itself become the prime necessity of life; after the productive forces have also increased with the all-round development of the individual, and all the springs of co-operative wealth flow more abundantly-only then can the narrow horizon of bourgeois right be fully left behind and society inscribe on its banners: From each according to his ability, to each according to his needs!" (Marx, Critique of the Gotha Programme", in Marx and Engels, Selected Works, 1950, English edition, Vol. II, p. 23.)