The vertical dimension represents the extent of government, that is, it's aggression-power. The horizontal dimension represents the purpose of government, economically speaking, specifically the legal fiction of "sticky" private property.
Both propertarianism ("capitalism") and anti-propertarianism ("socialism") have statist and libertarian variants. The plots are approximate and open to debate. Hogeye's Two Question Political Quiz is based on this model. Also see the area graph and a 3D graph.