1. Private ownership of means of production

2. The economy is based on the maximization of profits.

3. There is a free market so that both production and wages depend upon the laws of demand and supply.


4. There are two classes of capitalists and workers or Bourgeoise and Proletariat.


1. Means of Production is socially owned.

2. The economy is based on the principle of “from each according to his ability, to each according to his need.”


3. There is a Centralised Planning for both production and wages

4. It is classless society

These are the four major distinctions between Capitalist and Socialist Society. In spite of these major distinctions there are many minor distinctions.

Marxist theory not applicable to Capitalist Society at present because of the following:


1. The economy may not necessarily lead to stratification and class conflict because other form of conflict such as those between nationalities or parties may replace it, there is growing political conflict in a society where Laissez Faire Capitalism is replaced by Welfare State Capitalism in which political power is as important as the economy.

2. The two-class division of Marx is based upon a prediction of Polarization of classes along with Pauperization (poverty) of the worker and concentration of capital in the hands of a few, but this does not happen since a large middle class emerges. Another way of putting this is to say that instead of pyramid shaped stratification now there is diamond shaped stratification.

3. The worker does not become a class-conscious revolutionary, ready to overthrow the capitalistic system but merely a reformist trying to get higher wages, better housing, fewer hours of work, retirement benefits, etc. within this system.

4. The capital is not concentrated in the hands of a few Capitalists, but is widely defused among a large number of share holders who are incapable of controlling the industry.


5. There is considerable social mobility particularly in the working class so that education and skills are widely defused among them and a new class of skilled workers comes in to existence which has better pay, better conditions of work, more opportunities of promotion and a higher standard of living than the unskilled workers

Since Marxism’s two class model is not applicable to capitalist society in view of the above changes, it is useful to see how the Weberian model can be applied to the study of capitalist society in the following three ways: _

1. Weber proposes a multiclass model for capitalism in contrast to Marxist two Class Model and the Weber’s model is based upon differences of life chances in terms of both value and goods or rewards available to a group in the market.

2. Weber says that the working class may not be the revolutionary class trying to overthrow the capitalistic system and it may only be interested in adjusting and adopting the system to look after the welfare of workers by strikes and agitation, etc.


3. Weber gives great importance to the power dimension as being an independent determinant of the economic system and consequently of stratification. He considers the mutual relationship of economic power and status dimensions.

Giddens uses Weber’s understanding of class in order to analyze capitalist society by emphasizing that

1. There are more than two classes based upon the marketability of an occupation in order to get rewards.

2. The demand and supply of an occupation depend upon the power wielded by as an organised cohesive group and not upon its functional importance in society.


3. The marketability of an occupation and the power which is wielded also determine the pre of an occupation.

Socialist Society (characteristics)

1. According to Marx it is a Classless Society in which the means of production are soc owned but research has shown that certain strata are present in these societies based on differences of rewards according to occupation. These strata are those of the Professionals, Lower white-cc workers skilled workers and unskilled workers.

2. These strata are different from classes in three ways.

(a) There is no private property and so property cannot be inherited by next generation.

(b) The income differences between strata are less than that of capitalist society.

(c) Since there is no private property there is any class conflict and the strata are non-antagonist this makes the system more open than capitalist society.

3. To say that different occupations are rewarded according to their skills is to fall into the trap of the functional approach which ranks occupation according to the level of training. In fact differential rewards are the result of differences in power and there is power elite in socialist society which gets the privileges and develops a vested interest in the system.

These elite are constituted by the part bureaucracy and it has a monopoly of power as it does not have to share only power with the capitalis class. It is the unified and cohesive elite which controls the production and distribution of socialist property and becomes “a new class” in the words of Yugoslav’s sociologist Djilas – thus elite gets a lion’s share of the privileges such as good housing, better education. Best medical care and other perquisites are denied to others.

4. Thus rewards and power are connected to each other in a Socialist Society and they are also connected to occupational prestige. It will be found that the occupational stratification of rewards, power and prestige of a socialist society is quite similar to that of a capitalist society. This fact is summarised by convergence theory of Socialist and Capitalist Society according to which the same stratification results from the use of the same technology.

It is just a theory which has to verified yet only with the help of same technology.