Capitalism is a mode of production and distribution where private ownership is the principal aspect of the economy (ie rising, dominant, and in control of the commanding heights), and the capitalist class controls the state. Imperialism as a stage in capitalism is where bank and industrial capital monopolize and consolidate, creating finance capital, which pivots to export of capital rather than simple commodities. Since the state is capitalist, the public sector serves the capitalist class above all else.

Socialism is a mode of production and distribution where public ownership is the principal aspect of the economy, and the working classes control the state. The socialist market economy is a form of developing socialism where marketization is employed in a controlled manner to support the development of the productive forces, which are the bedrock of developed socialism. Just as public ownership in capitalism is not socialism, private ownership in the context of a socialist system is not capitalism either.