In terms of production, what best describes the difference between capitalism and socialism? Capitalism is a system in which goods are made by private businesses, but socialism stresses government control over production. Capitalism is a system in which the government controls production, but socialism stresses production by private businesses. Capitalism is a system in which people pursue their own self-interests, but socialism stresses an equal distribution of wealth. Capitalism is a system in which government should “plan” the economy, but socialism stresses that free market dictates production.