The book tells the story of Julian West, a young American who, towards the end of the 19th century, falls into a deep, hypnosis-induced sleep and wakes up one hundred and thirteen years later. He finds himself in the same location (Boston, Massachusetts), but in a totally changed world: It is the year 2000 and, while he was sleeping, the United States has been transformed into a socialist utopia. The remainder of the book outlines Bellamy's thoughts about improving the future. The major themes include problems associated with capitalism, a proposed socialist solution of a nationalisation of all industry, the use of an "industrial army" to organize production and distribution, as well as how to ensure free cultural production under such conditions.
The young man readily finds a guide, Doctor Leete, who shows him around and explains all the advances of this new age; including drastically reduced working hours for people performing menial jobs and almost instantaneous, Internet-like delivery of goods. Everyone retires with full benefits at age 45, and may eat in any of the public kitchens. The productive capacity of America is nationally owned, and the goods of society are equally distributed to its citizens. A considerable portion of the book is dialogue between Leete and West wherein West expresses his confusion about how the future society works and Leete explains the answers using various methods, such as metaphors or direct comparisons with 19th-century society.
Although Bellamy's novel did not discuss technology or the economy in detail, commentators frequently compare Looking Backward with actual economic and technological developments. For example, Julian West is taken to a store which (with its descriptions of cutting out the middleman to cut down on waste in a similar way to the consumers' cooperatives of his own day based on the Rochdale Principles of 1844) somewhat resembles a modern warehouse club like BJ's, Costco, or Sam's Club. He additionally introduces a concept of "credit" cards in chapters 9, 10, 11, 13, 25, and 26, but these actually function like modern debit cards. All citizens receive an equal amount of "credit." Those with more difficult, specialized, dangerous or unpleasant jobs work fewer hours (in contrast to the real-world practice of paying them more for their efforts of, presumably, the same hours). Bellamy also predicts both sermons and music being available in the home through cable "telephone" (already demonstrated but commercialized only in 1890 as Théâtrophone in France). Bellamy labeled the philosophy behind the vision "nationalism", and his work inspired the formation of more than 160 Nationalist Clubs to propagate his ideas.
Despite the "ethical" character of his socialism (though he was initially reluctant to use the term "socialism"), Bellamy's ideas somewhat reflect classical Marxism. In Chapter 19, for example, he has the new legal system explained. Most civil suits have ended in socialism, while crime has become a medical issue. The idea of atavism, then current, is employed to explain crimes not related to inequality (which Bellamy thinks will vanish with socialism). Remaining criminals are medically treated. One professional judge presides, appointing two colleagues to state the prosecution and defense cases. If all do not agree on the verdict, then it must be tried over. Chapter 15 and 16 have an explanation of how free, independent public art and news outlets could be provided in a more libertarian socialist system. In one case Bellamy even writes "the nation is the sole employer and capitalist".