John Stuart Mill is considered one of the most important representatives of the classical school of political economy. His intellectual development exhibited a gradual transition toward more socialistic views. This transition was partly the result of his interaction with French utopian socialists, which led Mill to theoretically construct an economic system lying between what is now called market capitalism and revolutionary socialism. For Mill, socialism would be a new organic period after the transitory and critical period of the “stationary state.” This paper delineates the core tenets of Mill's stationary state and presents it as an early anticipation of what from the 1920s on is called “market socialism.” Mill's optimistic vision of the stationary state was based on the spread of associations, the socialization of knowledge among all people, competition, and the importance of individuality. These elements are connected with Mill's idiosyncratic, liberal and utilitarianist vision of (market) socialism which prepares the ground for his socialist utopia based on the ideal “from each according to his capacities; to each according to his needs.”