Ethics, which is determining right and wrong actions, requires at least two moral individuals to be in contact with one another. By moral, I mean beings capable of thinking and capable of acting. A man cannot be moral in respect to a rock; he can commit no wrong to the rock and the rock cannot act at all, denying the existence of ethics in this particular case. A person who could think but could not act, even in the presence of another human being, cannot participate in any ethical situation, as they are completely unable to affect any change to the situation.
Politics encompasses a large subset of ethics. In politics, right and wrong are defined, stated, and enforced by a body that possess a monopoly on the legitimate use of force. The other subset includes all actions that one should take but which may not be compelled with the use of force. Because politics is a subset of ethics, people become passionate about the subject. A declaration that the other person's politics are wrong is an indication that their ethics are wrong, as politics are a part of ethics.
Ethics (and hence politics) is a realm that is distinctly human and in many ways sets us apart from other species, being intrinsic to the quality of being human.
Socialism, or any other statist philosophy, degrades this human quality by denying humans the chance to act as they see fit. People are forced to pay for the so called "safety net." No choice is allowed; without choice, the people of such a society cannot be considered ethical as ethics requires choosing the correct option. Without choice, their is no choosing, and hence no ethics. It is partly because of this that the massive amount of wealth taken from successful businesses and rich individuals is not accredited to them as ethical by their detractors. Ironically, the more that is taken from these people by force, the less ethical they can be (as they have less to act with), and hence the more they will be demonized.
A free market system prevents people from acting rather than forcing them to act in a particular way. Imagine there being five possible actions for a situation, A B C D and E. The free market system, combined with respect for natural liberties but with no provision for positive liberties, removes option E from the allowed options but lets the individual decide between A B C and D. Statist systems act differently. Rather than removing an option but leaving a choice, the Statist will decide the one particular action for that individual to make. They may say, "you shall do B", in which case the person must do B. That person, however, is no longer an ethical being, as ethics requires choice. The more options left to the individual, the more choice they have, and hence the more they can participate in that human quality known as ethics.
This is not to say they will always choose the correct, "ethical" answer. They may very well choose to do wrong, but if they do so it is their responsibility and that individual can be held accountable for doing wrong or right. Not so in a statist system. When a man does B because he was given the choice between B and death (being completely removed from ethical decisions forever), he cannot truly be said to be responsible. He will say that he was just following orders, which is exactly true. There is no reason to believe a state's orders will be more moral than that of an individual, as the state is composed of individuals. If anything, the opposite is true, as the state will have the power to do wrong with impunity more than the individual.
That a free market system will outperform a socialist system (namely because the socialist system lacks the minute detail of information available to a free market) has been dealt with elsewhere. I believe I have shown that a free market system is also ethically preferable in that is allows ethical beings to exist, whereas a statist system chooses for its people in many circumstances and becomes the only ethical being by denying to its people the chance to act in accordance with a distinctly human quality.