There are forms of socialism that have free markets called market socialism, or an even more free version called mutualism. Businesses are ran directly by the workers, but can compete with other businesses. Syndicalism is also another viable route, it worked well in Catalonia, goods were cheaper, people were happier.
First - we must make the distinction between socialism and communism. They are not the same thing; communism is more extreme and has more defined parameters. Socialism is less extreme and allows for the freedom of religion some ownership of private property, along with many other individual freedoms. It aims to reduce the class distinctions and will attempt to provide for all citizens with the basic necessities of consumption and life.
Capitalism on the other hand makes little to no effort in an attempt to reduce the class distinctions. It functions by the premise that those who are in the lower classes are their of their own accords without giving major consideration to where a person was born.
We can point to the successes of Scandinavian nations to show that Socialism is a better ideology than Capitalism because of its attempts to achieve equality without completely destroying personal freedoms and rights.
Socialism, in the sense of social democratic principles, is good. Medical, education, housing, and pensions should be taken care of, whether by the local community, state/province, national level, guilds, or the corporations. I believe this is the definition of socialism - broken down. This must be protected by law, however. Capitalism should be used for the non-public goods.
People in capitalist countries are more free, have lower unemployment rates, and allows people to determine their own fiscal destiny. Socialism, while it tries to help, only hurts those it claims to be for. Socialism has absolutely devastated economies worldwide, just look at Greece, North Korea, Cuba, and a number of African and Asian countries, while capitalism is more beneficial, ever hear of Americans or Germans living anywhere near the atrocious economic conditions of socialist countries? The answer is no. The only reason Sweden is doing good is because foreign aid from Capitalist countries, who also provide military protection and create trade agreements that are mutually beneficial.
The fact is socialism creates a rigid class system. Under socialism you have the Elite (those who run the system IE government), and the poor (IE everyone else). There is very little class jumping, and why would there be? There is no incentive for people to work hard. Anything people work hard for gets redistributed among the populace, with the elite taking first pick. However, under capitalism you have just the opposite. There is great incentive to work hard, because you personally benefit from hard work. Because of this jumping from poor to rich is very possible. In short I would say the system that gives people the best opportunity... Hence my vote for capitalism.
Communism doesn't work, Socialism can work if certain conditions are meet, and Capitalism works all on its own. Socialism can work, the Scandinavian countries are proof of that, but they don't work as well as capitalism. Of the top ten largest economies in the world only one, France, is noticeably socialist. Brazil, China, and Italy are partially socialist but lean more toward capitalism. And the US, Japan, Germany, UK, Russia, and India all use capitalism.
Plus capitalism has a tendency of "infecting" non-capitalist countries until they eventually turn toward capitalism. China, Russia, and Brazil are both very good examples of that. Capitalism may have its problems, but when its paired with a strong democratic government, it out preforms any other system.