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Orwell's critique of socialism is the most obvious in the story, with the animals attempting a communist-style society in the farm and slowly failing as Napoleon takes over as a dictator. The animals initially work with each other, everyone taking a roughly equal share in the labor, but the pigs, being more intelligent, slowly start to move all the actual labor onto the other animals while placing themselves into positions of honorary, and then explicit, dictatorship. The farm becomes a slave-society, with the pigs acting human while the other animals work hard for little reward.
Orwell's criticism of capitalism is more subtle, but it is clear throughout the story that the humans -- who all practice general capitalist policies -- are cruel and abusive. The animals try to escape this through their own work, but the animal society proves untenable and Napoleon begins commerce with the other farms. The farmers first try to cheat the animals, and then start working with the pigs. One farmer jokes:
"If you have your lower animals to contend with," he said, "we have our lower classes!" This bon mot set the table in a roar...
(Orwell, Animal Farm, msxnet.org)
This shows how uncaring the humans (capitalists) actually are, although the animals are certainly worse off under Napoleon than they were under Jones.
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