The term Arab Socialism itself was coined by Michel ‘Aflaq, one of the founders of the Ba‘th party, in order to distinguish his flavor of socialist ideology from Soviet socialism and to highlight its authenticity and originality. To ‘Aflaq, Arab Socialism was a necessary consequence of the quest for Arab unity and freedom, as only a socialist system of property and development would overcome the social and economic legacy of Colonialism. At the same time, he vigorously rejected orthodox Marxism, considering its materialist, internationalist and atheist foundations ill-adapted to the Arab situation.
While Arab Socialism endorsed much of the economic and social programme of Marxist-style socialism, its divergent intellectual and spiritual foundations imposed some limits on its revolutionary potential: The ownership of the means of production was to be nationalized, but only within the constraints of traditional values such as private property and inheritance. "Primitive" social structures such as feudalism, nomadism, tribalism and religious factionalism were to be overcome, but not at the cost of severing the social ties that constituted the Arab identity.
Arguably, the most notable economic manifestations of Arab Socialism were the Land reforms in Egypt (1952), Syria (1963) and Iraq (1970) and the nationalization of industries and the banking systems in those countries. In Egypt and Syria, this program can be considered to have failed, as most of these policies have either been reversed or continue to contribute to economic stagnation. Iraq appears to have been somewhat more successful until the beginning of the Iran-Iraq War in 1980, possibly due to the fact that its enormous oil wealth allowed it to compensate for lagging productivity growth and persisting inequality.
As the Ba‘th Parties in both Iraq and Syria were gradually transformed from an ideology-driven liberation movement into an instrument an ethnically defined, totalitarian rule, Arab Socialism lost its political importance. Today, it is politically and intellectually insignificant as a concept, although its leitmotivs of social egalitarianism and of finding a 'third way' between 'egoist' capitalism and 'anti-spiritual' socialism remain important in modern Arab political thought.