Capitalism is an economic system defined by private ownership and free enterprise, while socialism involves state ownership and central planning of the economy. Some key differences highlighted in the document include: - Under capitalism, individuals have the right to private property and freedom of enterprise, while socialism involves state ownership of production and no private property rights. - Capitalism allows for competition and consumer choice, but socialism involves centralized economic planning and production based on social priorities rather than consumer demand. - Rewards like profits and incentives for hard work exist under capitalism, but are absent in a socialist system with an emphasis on equal distribution of resources.