Marxists conceive of the state as an institution of capitalism that can be transformed to benefit the working class, as the state is the only institution that is capable of organizing and managing the economy on a large scale. The state would be radicalized in that the workers and people would control it through direct democracy or council democracy. The state becomes an integral part of the economy in that it owns the means of production in the phase of socialism. Marxists see the state as becoming unnecessary when the productive forces develop and authority on the state level is no longer required, leading to the disappearance of the state and social class. This society is called communism, where the means of production is owned communally but operated and managed by cooperatives.
Socialism is an economic system whereby either the state or worker cooperatives own and control the means of production, strategic resources and major industry. The principle of socialism is to organize the economy in a rational manner that avoids the pitfalls of capitalism and the free market through planned or state directed economic systems. Socialism can also utilize the market