One thing I never see mentioned in these threads that I would like to bring up (just to add some other viewpoints)…
During the colonial period, most colonies did not operate under the capitalist system. Instead, they operated under a quasi-mercantilist system. I’ll just use India as an example here, but the situation applies to numerous colonies.
During the British rule in India, native small-scale farming operations were disrupted in favor of large-scale farms many times owned by absentee British landlords (the original collectivization). Under this system, local growers were forced to grow raw materials for shipment back to England. These materials were then made into manufactured goods for shipment back to India. The rules and regulations of the colony almost completely decimated native manufacturing which (a) could not compete with the industrialized British goods and (b) was not allowed to develop native industrialized manufacturing industries. As well, capital formation native to the colony was made extremely difficult because of the way banking regulations were set up (the exception being the princely states, which had varying degrees of local autonomy). Post WWI, there was some relaxation of the regulations to allow some industry, but the movement was not significant (I should also add that there were Indian practices existing which the British found useful to continue, such as tenant farming, which clearly impeded individual ability to compete successfully in a purely capitalist environment).
So, after independence, India found itself with a bizarre economy that was geared largely for growing export crops with little manufacturing. Add to this a largely impoverished population.
Now, the question is, how does one rectify such an economic imbalance as quickly as possible? Adopting a laissez-faire capitalist approach possibly could work, but with such striking imbalances, I’m really hard-pressed to believe that such an approach would have worked quickly enough to address some very pressing needs. Some combination of socialist/capitalist policies were clearly needed in this situation (although, IMO, India went too far to the socialist side).
Unfortunately, in many cases, using socialist policies to rectify these type of colonial injustices was often seen in the US as a prelude to communism, when it may not have been. This conflation of socialist policies with communist ideology on the part of the US is to my mind, a tragic error.
To blanketly demonize socialism, IMO, ignores the reality on the ground of post-colonial regimes.
