What theory is based on the idea that the two economic systems capitalism and socialism will eventually adopt features of one another until there is a hybrid economic system in all societies?

The theory you're referring to is known as dialectical materialism, which is often associated with Marxist thought. It posits that capitalism and socialism are not mutually exclusive and that each system will evolve by incorporating elements of the other. This process is believed to lead to a hybrid economic model that integrates the efficiency of capitalism with the social welfare aims of socialism, ultimately resulting in a more balanced and equitable economic system.