Socialism is when society owns the means of production and workers self-manage their industries, agricultural lands and fisheries. They also define what the means of production are. The value and prices of the goods produced in Socialism are determined by the people and they take into consideration factors such as social welfare and environmental practices.
In a Free Entreprise system the means of production are owned by private individuals and workers have no say in how these are managed or what they are. The value and prices of the goods produced in Socialism are determined -at least in theory – by the supply and demand of the open market and by consumers.
They are the same in as much as they intend to organize a society’s economy in order to maximize efficiency but their goals greatly differ. The main goal of a corporation in a Free Enterprise society is to accumulate capital for its stock or shareholders without any regards for any other environmental or social considerations or consequences. In Socialism the main goal is to achieve the maximum efficiency of production and distribution in order to increase the resulting benefits, or even profits to the bulk of society and not just stake or shareholders (it can even be posited that in a Socialist economy all workers are shareholders of the socialized means of production).
b. Which system might tend to be more equitable and why (at least two real examples)?
Socialism is definitely the system that in theory tends to be more equitable since the resulting production of commodities and services is redistributed equally and fairly among all members of society. The selection and management of the means of production must always respect and take into consideration public welfare and the environment. Free Enterprise only dictates a rule of law that allows private individuals to operate without much regulation or restriction in order to own and manage the means of production to produce wealth for a minority of share/stakeholders without any regard for social or environmental consequences, unless people or natural resources have a value as a commodity.
An example of Socialist ownership and management of the means of production would be the expropriated industries in Argentina during the economic crisis of the late 90s and the early 2000s. Several industrial factory owners laid off all of their employees and left the country. In several of these industries, workers organized into workers cooperatives and expropriated the plants and started manufacturing and selling their product and started turning a profit with equal salaries for all. So much so that the former owners, who had shut down the factories because their operation did not yield enough value for shareholders, came back and tried to reclaim the factories.
There are thousands of examples of Free Enterprise ownership and management of the means of production, where American and European corporations shut off plants and lay off all workers even when their products are selling well but are not yielding as much profit to the shareholders.
c. Which system might tend to be more efficient and why (at least two examples)?
It all depends on the definition of “efficiency” which takes on a different meaning depending on the system. In a Socialist system of production, workers are able to participate in the management and the selection of the means of production and logically they will select and implement those that promote their common welfare while at the same time making sure that the quality and output are satisfactory in all senses (speed, quality, quantity, working conditions, environmental conditions and necessity). This is what efficiency means in a Socialist economy.
In a Free Enterprise economy, efficiency means producing the largest quantity of goods at the lowest minimum cost (meaning employing the least minimum people and under the most Spartan working conditions in order to minimize production costs), for the maximum price that can be charged and with the goal of producing the highest yield of profit for the share/stock holders. Usually, this come with a series of grave, if not fatal, social and environmental costs and consequences that are all externalized while most profits are privatized.