Reviewed by Aug 27, 2020| Updated on
Capitalism, an economic system, is based on the means of production being privately owned and operated for profit. The key features of capitalism are private property, capital accumulation, wage labour, free trade, a price structure, and competitive markets.
In a capitalist economy, investment and decision-making are decided by each owner of money, property, or productive capacity on financial and capital markets. At the same time, prices and the distribution of goods and services are determined primarily by competition on the markets of goods and services.
Economists, political economists, sociologists, and historians have taken on different perspectives in their analysis of capitalism and in practice have recognized different forms of it. These include capitalistic free-market, welfare capitalism, and state capitalism.
Various types of capitalism involve varying degrees of free markets, public ownership, barriers to free competition, and state-sanctioned social policies. The degree of market competition, the role of intervention, regulation, and the scope of state ownership vary across different capitalist models.
The degree to which different markets are available, and the laws governing private property are legal and governance considerations. Most of the current capitalist economies are mixed economies that combine free-market features with state intervention and economic planning in some cases.
History of Capitalism
Capitalism, in its modern form, can be traced back to the emergence of agrarian capitalism and mercantilism in the early age. Capital has incipiently existed on a small scale for centuries in the form of merchants, renting and lending, and occasionally as small-scale industry with some wage labour.
The simple exchange of commodities, and consequently simple production of commodities, which is the initial basis for capital growth from trade, has a very long history.
Few of capitalist countries are Hong Kong, Singapore, New Zealand, Switzerland, Australia, Canada, United Arab Emirates, Ireland, Chile, Taiwan, United Kingdom, Georgia, Luxembourg, The Netherlands, United States, Denmark, Sweden, Iceland, South Korea, Finland, and Norway.