The economy of the State is a form of economy with its own peculiar properties. We shall try to identify and analyse these properties by means of a comparison between the basic principles, the form and structure of the state economy and the free, capitalistic market economy. Despite some typification and generalization, we shall discuss the state economy in terms of the actual forms assumed by the economy of the modern State and its subordinate bodies, such as municipalities. Once we have established the features peculiar to these forms of economy and classified them, we may ask whether this type of economy can be described as communal economy. By then we shall have identified so many elements of the communal economy, that we may be able to draw the picture of an economy which is exclusively communal in form, not only by contrast to the free market economy. This will help us to a full understanding of the principle and nature of the communal economy. Finally, we shall examine how, in our present-day dualistic economic systems, such communal economy takes shape in the economy of the State, and what interaction and distinction there is between it and the free capitalistic market economy.