- published: 24 Jul 2015
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Capitalism is generally considered to be an economic system that is based on private ownership of the means of production and the creation of goods or services for profit or income by individuals or corporations. Some have also used the term as a synonym for competitive markets, voluntary exchange, wage labor, capital accumulation, or personal finance. Capitalism is variously defined by sources and there is no general consensus among scholars on the definition nor which economies can historically be properly considered capitalist. The designation is applied to a variety of historical cases, varying in time, geography, politics, and culture. There is, however, general agreement that capitalism became dominant in the Western world following the demise of feudalism.
Economists, political economists and historians have taken different perspectives on the analysis of capitalism. Economists usually emphasize the degree to which government does not have control over markets (laissez faire), as well as the importance of property rights. Most political economists emphasize private property as well, in addition to power relations, wage labor, class, and the uniqueness of capitalism as a historical formation. The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy. Many states have what are termed mixed economies, referring to the varying degree of planned and market-driven elements in a state's economic system. A number of political ideologies have emerged in support of various types of capitalism, the most prominent being economic liberalism.