I recommend reading this post at Carpe Diem blog on Why socialism always fails.
This is particularly well-said:
The strength of capitalism can be attributed to an incentive structure based upon the three Ps: (1) prices determined by market forces, (2) a profit-and-loss system of accounting and (3) private property rights. The failure of socialism can be traced to its neglect of these three incentive-enhancing components.
The main difference between capitalism and socialism is this: Capitalism works.