Define: Capitalism

UK Accounting Glossary

Definition: Capitalism


Quick Summary of Capitalism


An economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.



What is the dictionary definition of Capitalism?

Dictionary Definition


  1. politics, uncountable a socio-economic system based on private property rights, including the private ownership of resources or capital, with economic decisions made largely through the operation of a market unregulated by the state.
  2. economics, uncountable a socio-economic system based on the abstraction of resources into the form of privately owned capital, with economic decisions made largely through the operation of a market unregulated by the state.
  3. countable a specific variation or implementation of either such socio-economic system.

Advertisement



Full Definition of Capitalism


Capitalism is a market-driven economy, characterized by private ownership and use of resources owned for profit without restrictions. Individuals and businesses have the right to own all material resources. Capitalism gives them free control in the production, allocation and consumption of resources for generating income, profit, and wealth. The hallmark of capitalism is the free market concept, which allows open competition to achieve these goals. Practitioners of capitalism believe that markets are efficient enough to make independent decisions on matters like investments, production, distribution, income, and prices. Thus capitalism discourages any direct involvement of the state in the markets. The role of the government in capitalism is to provide regulation, infrastructure, and protection, to perpetuate capitalist economy, privacy, and freedom. Adam Smith, regarded as the father of capitalism, wrote of the role of enlightened self-interest (aka the “invisible hand”).


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/capitalism/
Modern Language Association (MLA):
Capitalism. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 19, 2020 https://payrollheaven.com/define/capitalism/.
Chicago Manual of Style (CMS):
Capitalism. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/capitalism/ (accessed: February 19, 2020).
American Psychological Association (APA):
Capitalism. PayrollHeaven.com. Retrieved February 19, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/capitalism/

Definition Sources


Definitions for Capitalism are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.