Capitalism has some fundamental flaws, as does Socialism. The question is which one can permit a society to survive and flourish long-term.

The United States economy is built upon one key premise: growth. The DJIA rises: good! The Gross National Product rises: great! The population expands, more sudivisions are built. Excellent! Of course, pure, unchecked capitalism leads to a truly dramatic chasm between the rich and the poor, and fortunately today that is not precisely the case.

The key thing is to look at the big, big, big picture. Growth can't go on forever. No, it can't. Like wise Agent Smith said in The Matrix:

Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment. But you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is?...A virus.
From the mouths of bots come truths, I suppose.

Capitalism's fundamental tenet is impossible to sustain. However, it works fine for now as long as we believe it is Somebody Else's Problem. Additionally, it is perhaps worth noting that very little is a cooperative endeavour within pure capitalism. For example, take the commercial radio station. My objective is to listen to music. Their objective is to play enough music I like to lull me into listening to advertisements. We are working to cross-purposes. Then again, perhaps that is the necessary root nature of bartering.

However, Socialism is not necessarily the cure for these ills. With Capitalism, there is the incentive to improve services, systems and products because it will make a company more successful, which is the desired end. With Socialism, however, besides faith in being a cog in a greater system, there is no push to improve in any way. The Soviet Union attempted to boost the idea of the noble worker, by repressing a doubting free press and deluging its citizens with propaganda and misinformation. In the end, the Soviet expression of Socialism (however ideologically impure), too, was unsustainable, but more rapidly so than the United States.

So which is more logical? I think, perhaps, a mixture, with effective central planning combined with a good, carefully watched, very very slowly expanding economic engine, would be most successful.

For more reading see the Capitalism VS Communism metanode (note that Socialism and Communism are hardly the same though!)