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.
Capitalism is an economic system based on private ownership of the means of production and their operation for profit.
- 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.
- 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.
- a specific variation or implementation of either such socio-economic system.
Capitalism is an economic system characterised by private ownership of the means of production and the pursuit of profit. It is based on the principles of free market competition, individual rights, and limited government intervention. In a capitalist system, individuals and businesses are free to engage in economic activities, such as buying and selling goods and services, with minimal restrictions. The primary goal of capitalism is to generate wealth and promote economic growth through the efficient allocation of resources. However, critics argue that capitalism can lead to income inequality and exploitation and may require government regulation to ensure fairness and protect the interests of all members of society.
Capitalism is a market-driven economy characterised by private ownership and the use of resources owned for profit without restrictions.
Individuals and businesses have the right to own all material resources. Capitalism gives them free control over 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 a 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”).
Yes, capitalism is a legal economic system in many countries around the world.
Yes, there are various laws and regulations that govern capitalist economies, including antitrust laws, labour laws, and consumer protection laws.
No, monopolistic practices are generally prohibited under antitrust laws in capitalist economies.
There may be restrictions on certain industries, such as healthcare and finance, to ensure consumer protection and fair competition.
Yes, private property rights are a fundamental aspect of capitalism, allowing individuals to own and control their own assets.
There may be tax laws and regulations that impose limits on wealth accumulation, but generally, there are no specific limitations on wealth accumulation in a capitalist economy.
Yes, there are environmental regulations that businesses must comply with to protect the environment and public health.
No, there are laws that prohibit fraudulent and deceptive practices in business transactions in capitalist economies.
Yes, governments may intervene in capitalist economies through fiscal and monetary policies, as well as regulations, to ensure fair competition and consumer protection.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 10th April, 2024.
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