Socialism arose in the late 18th and early 19th cent. as a reaction to the economic and social changes associated with the Industrial Revolution. While rapid wealth came to the factory owners, the workers became increasingly impoverished. As this capitalist industrial system spread, reactions in the form of socialist thought increased proportionately. Although many thinkers in the past expressed ideas that were similar to later socialism, the first theorist who may properly be called socialist was François Noël Babeuf, who came to prominence during the French Revolution. Babeuf propounded the doctrine of class war between capital and labor later to be seen in Marxism.

Socialist writers who followed Babeuf, however, were more moderate. Known as "utopian socialists," they included the comte de Saint-Simon, Charles Fourier, and Robert Owen. Saint-Simon proposed that production and distribution be carried out by the state. The leaders of society would be industrialists who would found a national community based upon cooperation and who would eliminate the poverty of the lowest classes. Fourier and Owen, though differing in many respects, both believed that social organization should be based on small local collective communities rather than the large centralist state of Saint-Simon. All these men agreed, however, that there should be cooperation rather than competition, and they implicitly rejected class struggle. In the early 19th cent. numerous utopian communistic settlements founded on the principles of Fourier and Owen sprang up in Europe and the United States; New Harmony and Brook Farm were notable examples.

Following the utopians came thinkers such as Louis Blanc who were more political in their socialist formulations. Blanc put forward a system of social workshops (1840) that would be controlled by the workers themselves with the support of the state. Capitalists would be welcome in this venture, and each person would receive goods in proportion to his or her needs. Blanc became a member of the French provisional government of 1848 and attempted to put some of his proposals into effect, but his efforts were sabotaged by his opponents. The anarchist Pierre Joseph Proudhon and the insurrectionist Auguste Blanqui were also influential socialist leaders of the early and mid-19th cent.

In the 1840s the term communism came into use to denote loosely a militant leftist form of socialism; it was associated with the writings of Étienne Cabet and his theories of common ownership. Karl Marx and Friedrich Engels later used it to describe the movement that advocated class struggle and revolution to establish a society of cooperation.

In 1848, Marx and Engels wrote the famous Communist Manifesto, in which they set forth the principles of what Marx called "scientific socialism," arguing the historical inevitability of revolutionary conflict between capital and labor. In all of his works Marx attacked the socialists as theoretical utopian dreamers who disregarded the necessity of revolutionary struggle to implement their doctrines. In the atmosphere of disillusionment and bitterness that increasingly pervaded European socialism, Marxism later became the theoretical basis for most socialist thought. But the failure of the revolutions of 1848 caused a decline in socialist action in the following two decades, and it was not until the late 1860s that socialism once more emerged as a powerful social force.

Other varieties of socialism continued to exist alongside Marxism, such as Christian socialism, led in England by Frederick Denison Maurice and Charles Kingsley; they advocated the establishment of cooperative workshops based on Christian principles. Ferdinand Lassalle, founder of the first workers' party in Germany (1863), promoted the idea of achieving socialism through state action in individual nations, as opposed to the Marxian emphasis on international revolution. Through the efforts of Wilhelm Liebknecht and August Bebel, Lassalle's group was brought into the mainstream of Marxian socialism. By the 1870s Socialist parties sprang up in many European countries, and they eventually formed the Second International. With the increasing improvement of labor conditions, however, and the apparent failure of the capitalist state to weaken, a major schism began to develop over the issue of revolution.

While nearly all socialists condemned the bourgeois capitalist state, a large number apparently felt it more expedient or more efficient to adapt to and reform the state structure, rather than overthrow it. Opposed to these gradualists were the orthodox Marxists and the advocates of anarchism and syndicalism, all of whom believed in the absolute necessity of violent struggle. In 1898, Eduard Bernstein denied the inevitability of class conflict; he called for a revision of Marxism that would allow an evolutionary socialism.

The struggle between evolutionists and revolutionists affected the socialist movement throughout the world. In Germany, Bernstein's chief opponent, Karl Kautsky, insisted that the Social Democratic party adhere strictly to orthodox Marxist principles. In other countries, however, revisionism made more progress. In Great Britain, where orthodox Marxism had never been a powerful force, the Fabian Society, founded in 1884, set forth basic principles of evolutionary socialism that later became the theoretical basis of the British Labour party. The principles of William Morris, dictated by aesthetic and ethical aims, and the small but able group that forwarded guild socialism also had influence on British thought, but the Labour party, with its policy of gradualism, represented the mainstream of British socialism. In the United States, the ideological issue led to a split in the Socialist Labor party, founded in 1876 under strong German influence, and the formation (1901) of the revisionist Socialist party, which soon became the largest socialist group.

The most momentous split, however, took place in the Russian Social Democratic Labor party, which divided into the rival camps of Bolshevism and Menshevism. Again, gradualism was the chief issue. It was the revolutionary opponents of gradualism, the Bolsheviks, who seized power in the Russian Revolution of 1917 and became the Communist party of the USSR. World War I had already split the socialist movement over whether to support their national governments in the war effort (most did); the Russian Revolution divided it irrevocably. The Russian Communists founded the Comintern in order to seize leadership of the international socialist movement and to foment world revolution, but most European Socialist parties, including the mainstream of the powerful German party, repudiated the Bolsheviks. Despite the Germans' espousal of Marxist orthodoxy, they had been notably nonrevolutionary in practical politics. Thereafter, revolutionary socialism, or communism, and evolutionary, or democratic, socialism were two separate and frequently mutually antagonistic movements.

Democratic socialism took firm root in European politics after World War I. Socialist democratic parties actively participated in government in Great Britain, Germany, Sweden, Belgium, the Netherlands, and other nations. Socialism also became a powerful force in parts of Latin America, Asia, and Africa. To the Indian leader Jawaharlal Nehru and other leaders of independence movements, it was attractive as an alternative to the systems of private enterprise and exploitation established by their foreign rulers.

After World War II, socialist parties came to power in many nations throughout the world, and much private industry was nationalized. In Africa and Asia where the workers are peasants, not industrial laborers, socialist programs stressed land reform and other agrarian measures. These nations, until recently, have also emphasized government planning for rapid economic development. African socialism has also included the revival of precolonial values and institutions, while modernizing through the centralized apparatus of the one-party state. Recently, the collapse of Eastern European and Soviet Communist states has led socialists throughout the world to discard much of their doctrines regarding centralized planning and nationalization of enterprises.

See G. D. H. Cole, A History of Socialist Thought (5 vol., 1953–60); J. Schumpeter, Capitalism, Socialism and Democracy (3d ed. 1950, repr. 1962); G. Lichtheim, A Short History of Socialism (1970); M. Harrington, Socialism (1972); W. Lerner, A History of Socialism and Communism in Modern Times (1982); A. S. Linemann, A History of European Socialism (1984); H. Davis and R. Scase, Western Capitalism and State Socialism (1985); D. Sassoon, One Hundred Years of Socialism (1997).