Breakdown:

1. The Scenario Setup: The Labor and the Tool
   The example begins with a straightforward scenario: an individual is hired to dig a hole, but they lack the necessary tool—a shovel. To complete the task, the worker borrows a shovel from someone else. This establishes the groundwork for illustrating the difference between capitalism and socialism, with an emphasis on labor, tools, and ownership.
2. Capitalism Explained: The Worker vs. The Tool Owner
   In the context of capitalism, the individual who provided the tool (the capitalist) owns the means of production (in this case, the shovel). The worker performs the labor by digging the hole, but under capitalism, it is the owner of the tool (the capitalist) who gets to claim the $100 earned from the work. The key idea here is that ownership of tools and resources, even if they are not actively producing, allows the capitalist to profit from the labor of others, which is a foundational principle of capitalism.
3. Socialism Explained: The Worker Retains Ownership
   The socialist model, in contrast, suggests that the $100 earned from digging the hole belongs to the worker who performed the labor, not the person who provided the tool. The rationale here is that under socialism, there are no private owners of the means of production. Instead, tools and resources are collectively owned by society, and individuals are not allowed to profit solely from owning those tools and resources. In this system, workers control the products of their labor, and there is no class of capitalists making money from the labor of others.
4. Collective Ownership vs. Private Ownership
   The difference is clearly highlighted: in capitalism, private ownership of the means of production allows some individuals (capitalists) to profit from the labor of others. In socialism, the means of production (like the shovel) are collectively owned and provided by society, meaning that no one person can profit off another’s labor by renting out tools or machines. This ensures that the worker receives full value for the labor they perform.
5. The Core Difference: Profit and Ownership
   The core difference between capitalism and socialism as framed by this example is centered around ownership and profit. Capitalism allows individuals to profit from owning the means of production, while socialism focuses on collective ownership and equitable distribution of profits from labor. This distinction highlights a fundamental inequality in the capitalist system: the worker does the labor, but the capitalist profits from owning the tools required for that labor.

This breakdown offers a clear, accessible explanation of how capitalism and socialism function differently when it comes to the distribution of wealth and power between laborers and owners.