Capitalism is better than socialism because it gives people an incentive to work, invest and create new things. If someone builds a successful business, they can benefit from it, while competition forces companies to improve. Socialism may create more equality, but if success is rewarded less, people also have less motivation to create wealth. It makes more sense to create wealth first and then redistribute some of it than to focus on dividing wealth before creating it.

The problem is that you're treating competition as if it always means companies must cut wages or pollute, but that's not how competition works. Companies also compete for workers and customers, so better wages and better products can give them an advantage. And if a company pollutes or becomes a monopoly, the government can regulate it without taking away private ownership. Socialism changes the payoff structure by giving more power to collective ownership, but that also reduces the individual incentive to invest, innovate and take risks. Capitalism doesn't need every company to cooperate, it uses competition to make companies improve.

You're assuming that capitalism rewards defection, but competition often rewards the opposite. A company that cuts wages too far can lose its workers, and a company that makes bad products can lose its customers. That's why firms have an incentive to treat both well. And socialism doesn't magically make cooperation the stable strategy. If the state controls the surplus, the people controlling the state gain enormous power over everyone else. Capitalism spreads ownership and gives people the possibility to build capital themselves. The real question is not who holds the capital, but whether people are free to earn, invest and compete for it. Capitalism gives them that opportunity, socialism restricts it.

That statistic doesn't prove your conclusion. Even if productivity grew faster than typical wages, it doesn't mean workers would be better off under socialism. The exact 70% and 12% figures are also disputed, and productivity-pay gaps depend heavily on how productivity, wages and compensation are measured. More importantly, socialism doesn't automatically put the surplus into workers' hands. Someone still has to decide how much each worker gets, and that usually means giving the state much more control over the economy. Capitalism at least gives workers a way to benefit directly from growth through higher wages, investments and ownership. The real issue isn't whether every dollar of growth goes to workers, but whether the system gives people the freedom and incentives to create more of it in the first place.

But your solution doesn't actually solve the problem you describe. If capitalism concentrates power in owners, socialism concentrates even more economic power in whoever controls the state. The difference is that under capitalism, ownership can be spread through wages, savings, stocks and starting businesses, while under socialism the state decides how much of the surplus people receive. And the productivity-pay gap doesn't prove that workers would be better off under socialism. It only shows that productivity and pay can grow at different rates. Capitalism has problems with inequality, but it gives people multiple ways to gain from economic growth. Socialism doesn't make cooperation magically stable, it just replaces millions of individual decisions with a system where a smaller group decides how the surplus is distributed. I'd rather have a system where people can compete, own property and build wealth than one where the state decides how wealth is divided.