Definitions
Socialism: An economic system in which the basic means of production are primarily owned and controlled collectively, usually by government under some system.
Capitalism: An economic and social system in which individuals can maximize profits because they own the means of production.
A Short Example
Capitalism
I am a delivery person. I own my car. I depend on my car for my livelihood, so I take care of it. I have the oil changed. I might even choose to buy a more fuel efficient car because that will save me money. The money I save I spend on more pie.
Socialism
I am a delivery person. The state owns all delivery people's cars (to help spread the wealth around). I don't bother changing the oil in the car, because if it breaks down the government will just get me a new one (until the whole system fails). I can't convince them to let me have a more fuel efficient car, and it doesn't matter much to me anyway because the state pays for the gas. Because the state has to pay more for gas and broken cars, my state supplied ration for pie gets reduced.
This is why people fled Russia and still flee China. You become a slave to the state, and have little control over your life.
Obama has not proposed nationalizing delivery people's cars (yet), however, his record indicates his direction. Note that Bush has done this, too. The majority of McCain's rhetoric is pro-capitalism. Ron Paul's is way pro-capitalism.
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