George Orwell's Animal Farm (1945) is a satirical allegory of the Bolshevik Revolution in Russia and the conditions that prevailed in the country under Stalin's dictatorship. Direct parallels can be drawn between several characters in Animal Farm and real life people, e.g., Napoleon: Stalin; Snowball: Trotsky; Squealer: Goebbels. An alternate interpretation of the novel is that it depicts the general human condition and applies to the political and social conditions in several other countries besides the Soviet Russia. Given the fact that Orwell often drew parallels in his writings between the totalitarian regimes of Stalin and the fascist regimes in Germany and Italy at the time, Animal Farm probably did portray the Soviet Union under Stalin.
The concept of Communism was first forwarded by Karl Marx, who described it as a utopian state, following a revolution and a proletariat dictatorship, in which there would be no need for a government and everyone would live in equality and a state of happiness. Such a utopian Communist state, however, has never existed. The most famous experiment in Communism was the Russian Revolution of 1917 that led to the formation of the Soviet Union, degenerated into the totalitarian regime of Joseph Stalin, and eventually collapsed in 1991.
The main reason for the 'failed experiment' of Communism appears to be that the concept directly conflicts with the strongest urge in human nature, i.e., self-interest. The failure of Communism contrasts sharply with the success of Capitalism -- a system in which everyone works for his or her own economic interest, thereby contributing to collective economic progress. On the other hand, in a utopian Communist state, people are supposed to work for collective benefit. Since an urge to work for collective benefit rather than for self-interest does not come naturally to humans, they have to be forced into acting against their nature. This results in a totalitarian, tyrannical regime such as the one established by Joseph Stalin. The Animal Farm depicts such degeneration.
Fitzpatrick, Sheila. The Russian Revolution. New York: Oxford University Press, 1994.
Hunter, Lynette. "Animal Farm: Satire into Allegory." George Orwell: Contemporary Critical Essays. New York: St. Martin's Press, 1998.
Orwell, George. Animal Farm.
Pipes, Richard. A Concise History of the Russian Revolution. New York: Vintage Books, 1995.