Capitalism: is an economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit. (Basically Capitalism referred to people who believed that the government should not interfere with businesses)
Socialism: the factors of production are owned by the public and operate for the welfare of all.
The main difference between the two was that in capitalism, business owners wanted to run everything themselves. They didn't want help from the government at all. Socialism was when the people wanted "some government" involved within the businesses. In summary, the main difference is the amount of government that was allowed to take over in a business.
Capitalism tends to be associated with a free or a mixed market and places great importance on private ownership of property, giving businesses a great deal of freedom.
Socialism, while allowing for some private ownership, tends to place many more regulations on businesses, restricts some individual rights to private ownership, and typically has some government-dominated industries, such as transportation.
