Look at China.
Oh? You mean the place that was until recently regarded as a terrible place to live and a third world country that only know is becoming a economic power house as they add in Capitalist reforms to their economy.
Of course socially is it is socialist, and we all know how good their social policies are.
I forgot to mention, communism is a government, capitalism is an economic idea which is the opposite of what communism dictates.
But you can not really split them apart as far as government/economy goes. Communism really is a merger of economic and governmental theory. Even capitalism has fingers in the governmental theory.
A pure communistic country like the soviet union fails
Actually, as I am sure a lolcommie would be glad to point out, the USSR was not a communist country. They were just trying to become a communist country. Like all country that have tried so far they failed.
The other you have freedom, but the economy breaks alot.
I dunno. The economy has not truly broken for a long time. We go though these waves all the time, and honestly they are nothing to be overly worried about so long as they do not devolve into a depression.
The either is in the middle. You lose a few rights, but the economy is stable, and you can own a business. However, government can do what they want most of the time.
Your described middle ground seem to lose quite a lot of rights, more then a few at last. Also, China is hardly the middle ground... That would be more like Sweden.
Not to mention that it's growth is almost certainly not going to last. They are just getting their industrial boom, which is only noticeable because of the shear size of the nation. I would be very surprised if at some point, maybe in 20 years, maybe in 50, they do not crash.