What is Capitalism?


Economic System: 

Capitalism is an economic system in which the means of production, distribution, and exchange are privately owned and operated for profit.


Private Ownership:

In capitalism, individuals and businesses have the right to own property, including land, resources, and capital goods, and use them to generate wealth.


Market Economy: 

Capitalism relies on market forces such as supply and demand to determine prices, allocate resources, and distribute goods and services.


Profit Motive: 

The driving force behind capitalism is the pursuit of profit. Individuals and businesses seek to maximise their profits by producing goods and services that are in demand and selling them at competitive prices.



Capitalism fosters competition among businesses, which helps to drive innovation, efficiency, and consumer choice.

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Free Enterprise: 

Capitalism promotes entrepreneurship and allows individuals to start and operate businesses freely, without excessive government intervention or regulation.


Consumer Sovereignty: 

In capitalist economies, consumers have the power to influence production decisions through their purchasing choices. Businesses must respond to consumer preferences to remain competitive.


Economic Growth: 

Capitalism has historically been associated with economic growth and increased prosperity due to its emphasis on innovation, investment, and productivity.


Income Inequality: 

While capitalism can lead to overall economic growth, it also tends to result in unequal distribution of wealth, with some individuals and businesses accumulating significant wealth while others struggle to make ends meet.


Role of Government: 

While capitalism favours minimal government intervention in the economy, governments often play a role in regulating markets, providing public goods and services, and addressing market failures such as monopolies and externalities.


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