Socialism has greater potential for democracy, but it also has greater potential for dictatorship. Under capitalism, the rich will always be able to subvert democracy with their greater ability to contribute to political campaigns, and to dominate political discussion by their ownership of the mass media.
Nevertheless, under socialism a dictator can control the economy and decree high incomes for himself and his cronies. This is what has happened in North Korea.
I prefer social democracy. It is the closest approximation to democratic socialism that has worked. In social democracy there are regular contested elections, a mixed economy, a high minimum wage, strong labor unions, and a well financed public sector of the economy paid for by steeply progressive taxation.