It depends. Sometimes a state will declare a monopoly on a certain good or service, making it illegal to go into business and compete with the state in that realm. Other times, the state will be such a big competitor that it is much more difficult to compete either for market or resources.

And then you have something much worse than either socialism or capitalism: cronyism. That's when the politicians pass laws that force people to purchase goods and services from their friends and from the companies that the politicians have invested in. That's the sort of thing that the USA has more and more of. While we're fighting each other about capitalism vs socialism, the politicians and their cronies are laughing their way to the bank. As the situation gets worse, each side blames the problems on the other. Fox News says it's the fault of socialism and MSNBC says its the fault of capitalism. But as long as we keep playing that tug of war, the cronyism goes unchecked and gets stronger and stronger.

That's why I *facepalm* every time I see the capitalism versus socialism arguments. It's classic misdirection.