Memes

If you categorize the factors of production as land (including natural resources), labor (self-explanatory), and capital (money, equipment, tools, education, skills, buildings, facilities, software, etc.), then socialism is a category of economic systems in which land and capital (and sometimes labor) are socially owned.

What "social ownership" means depends on which flavor of socialism you mean. Market socialists, for instance, want a market economy similar to our own, but where businesses are worker-owned cooperatives as opposed to hierarchical in nature. Similarly, syndicalists want a market economy but with strong industry-wide unions so that labor can bargain for more control of land and capital. Other forms of socialism, however, aim for public ownership, i.e., the government owns the land, capital, and possibly labor, and decides how to allocate resources in a non-market economy.

Capitalism, in contrast, believes in private ownership of land, labor, and capital, i.e., a private citizen or a corporation can own these things and have property rights over them.

In the real world, however, things get a lot messier than this simplified categorization works. For example, when the government taxes your income, that is the government exerting some degree of partial public ownership over your labor, something both capitalists and (some) socialists would oppose. Similarly, the government implementing capital gains taxes is a form of partial social ownership over capital. Thus, to claim our current system is fully capitalist is untrue; rather, it has elements of capitalism as well as elements of socialism.

It's further complicated when you notice that there's more than just two possible categories of economic system based on ownership of the factors of production, though. For example, Georgism (an ideology named after economist Henry George) advocates social ownership of land (and natural resources) via taxes, but leaving labor and capital to be privately owned. One can also probably imagine other systems in which, for example, labor is socially owned but not land nor capital. Or capital socially owned but not land nor labor. Or several other combinations. And, of course, you can get nearly infinite possibilities if you start further dividing by method and/or degree of social ownership.