"Socialism is a political term applied to an economic system in which property is held in common and not individually, and relationships are governed by a political hierarchy. Common ownership doesn't mean decisions are made collectively, however. Instead, individuals in positions of authority make decisions in the name of the collective group. Regardless of the picture painted of socialism by its proponents, it ultimately removes group decision making in favor of the choices of one all-important individual.
Socialism originally involved the replacement of private property with a market exchange, but history has proven this ineffective. socialism cannot prevent people from competing for what is scarce. Socialism as we know it today, most commonly refers to "market socialism," which involves individual market exchanges organized by collective planning.
People often confuse "socialism" with the concept of "communism." While the two ideologies share much in common -- in in fact communism encompasses socialism -- the primary difference between the two is that "socialism" applies to economic systems, whereas "communism" applies to both economic and political systems.
Another difference between socialism and communism is that communists directly oppose the concept of capitalism, an economic system in which production is controlled by private interests. Socialists, on the other hand, believe socialism can exist within a capitalist society."
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Socialism: An Economic and Sociological Analysis by Ludwig von Mises