The difference between a socialist and a capitalist economy lies primarily in their approaches to ownership and resource allocation. In a socialist economy, the government or public ownership controls the means of production and distribution, aiming to minimize economic inequalities. Policies prioritize social welfare and equitable distribution of goods. Conversely, a capitalist economy emphasizes private ownership, individual entrepreneurship, and free markets, allowing supply and demand to dictate economic outcomes. The fundamental differences between these systems influence political ideologies, governance structures, and citizens' quality of life across various societies.