Socialism and capitalism differ primarily in their approaches to ownership and resource distribution. In capitalism, private individuals and companies own the means of production and operate for profit, leading to competitive markets. Conversely, socialism advocates for collective or government ownership of production, aiming for equitable resource distribution and social welfare. This can result in varying degrees of state intervention in the economy. Practically, capitalist societies often experience greater economic growth and innovation, while socialist systems may prioritize social equity and reduce income disparities. Each system's effectiveness depends on specific policy implementations and cultural contexts.