The west figured out 100 years ago that neither pure capitalism nor pure socialism worked. The West gave itself the great depression by going pure capitalism, and the commies did the same by going pure commie.
The difference is the West figured all you need to do to fix capitalism is add in a healthy dose of socialism (education, health care, welfare, unions, social security, regulating the markets, etc) and boom goes the dynamite, you're golden.
The East didn't learn their lesson, and stayed pure commie and got left in the dust. Until recently, of course, when China finally realized that the way to fix their commie economy was to add a big dose of capitalism, and now voila - they're kicking everyone's asses while still being heavily socialist.
You need both of them to create a dominant economy, and that's what the last 100 years of boomtimes have been (in the west at least, but now in china too). The political arguments are all about keeping the right balance of capitalism and socialism in the economy, and every country has a slightly different balance and we fight and argue about it and that's good and healthy, because too much of either is bad.
Unfortunately for the US 40 years ago started a massive attack on the socialism they had put into place - mostly by deregulating the markets, but also refusing to fund healthcare, undermining unions, etc. - and they've suffered a number of big crashes since, and now the gap between the haves and havenots is accelerating back to where it was 100+ years ago when economies collapsed and societies revolted. It's causing most of the problems we see today.
Of course the big lie of the "socialist" smear is that they've successfully turned "socialism" into a synonym for "authoritarianism" for a whole bunch of people. That's the big trick. So now even though we have 100 years of successful democratic socialism in the west, they can attack any socialism as totatitarianism, and capitalism as freedom - when in reality, capitalism is every bit as susceptible to authoritarianism as socialism is (see: current corporate sellout to trump). And this smear is propagated by all the rich people in order to deregulate their industries and cut their own taxes.