Socialism doesn’t work. It’s been tried lots of times and it always ends in disaster. The reason is rooted in human psychology. Things need to be produced before they can be consumed but you can’t convince people to do the production unless they are incentivized. Denmark and the other Scandinavian countries are not good examples because they have lots of oil revenue and small populations. The Soviet Union got by on oil revenues as well.
Capitalism as currently practiced doesn’t seem to be working either but we don’t practice an “Adam Smith” type of capitalism, ours is more a sort of corporate financialism if you will. I think it’s probably better to say at this point we haven’t yet figured out how best to run a modern large scale economy, but we know that without capitalism (Adam Smith style) there would have been no modern large scale economies to manage. Even China recognized that some amount of capitalism was going to be necessary if they were going to modernize. It’s all about the incentives.
The other thing socialism requires is absolute control over immigration. Otherwise you get a flood of financial refugees who quickly overrun the state social system. I think we can say they’ve proved this without a doubt in Europe.
So I think what’s needed is some sort of third system that hasn’t been well defined yet. It would have to incorporate both socialism and old style capitalism and would also require the rethink of a lot of other policies as well. Excessive financialization would probably have to be prevented because that is the true source of excess inflation in an otherwise normal capitalist economy.