Capitalism
Capitalism is an economic system in which the means of production and distribution and industry are privately
owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and
investments are made by private actors in the market rather than by central planning by the government;
profit is distributed to owners who invest in businesses, and wages are paid to workers employed by
businesses.
There is no consensus on the precise definition of capitalism, nor how the term should be used as an analytical
category.[1] There is, however, little controversy that private ownership of the means of production, creation of
goods or services for profit in a market, and prices and wages are elements of capitalism. [2] There are a variety
of historical cases to which the designation is applied, varying in time, geography, politics and culture. [3] Some
define capitalism as where all the means of production are privately owned, and some define it more loosely
where merely "most" are in private hands —while others refer to the latter as a mixed economy based toward
capitalism. More fundamentally, others define capitalism as a system where production is carried out to
generate profit, or exchange-value, regardless of legal ownership titles. Private ownership in capitalism implies
the right to control property, including determining how it is used, who uses it, whether to sell or rent it, and
the right to the revenue generated by the property. [4]
Economists, political economists and historians have taken different perspectives on the analysis of capitalism.
Economists usually emphasize the degree that government does not have control over markets ( laissez faire),
and on property rights.[5][6] Most political economists emphasize private property, power relations, wage labor
and class.[7] There is general agreement that capitalism encourages economic growth[8] while further
entrenching significant differences in income and wealth. The extent to which different markets are free, as
well as the rules defining private property, is a matter of politics and policy, and many states have what are
termed mixed economies.[7]
Capitalism as a deliberate system of a mixed economy developed incrementally from the 16th century in Europe, [9]
although proto-capitalist organizations existed in the ancient world, and early aspects of merchant capitalism flourished
during the Late Middle Ages.[10][11][12] Capitalism became dominant in the Western world following the demise of feudalism.
[12]
Capitalism gradually spread throughout Europe, and in the 19th and 20th centuries, it provided the main means of
industrialization throughout much of the world.[3]
Variants of capitalism include: anarcho-capitalism, corporate capitalism, crony capitalism, finance capitalism, laissez-faire
capitalism, late capitalism, neo-capitalism, post-capitalism, state capitalism, state monopoly capitalism and
technocapitalism.
Capital evolved from Capitale, a late Latin word based on proto-Indo-European kaput, meaning "head"—also the origin of
chattel and cattle in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the
12th to 13th centuries in the sense of funds, stock of merchandise, sum of money, or money carrying interest. [10][20][21] By
1283 it was used in the sense of the capital assets of a trading firm. It was frequently interchanged with a number of other
words—wealth, money, funds, goods, assets, property and so on. [10]
The term capitalist refers to an owner of capital rather than an economic system, but shows earlier recorded use than the
term capitalism, dating back to the mid-seventeenth century. The Hollandische Mercurius uses it in 1633 and 1654 to
refer to owners of capital.[10] Arthur Young used the term capitalist in his work Travels in France (1792).[21][22] David
Ricardo, in his Principles of Political Economy and Taxation (1817), referred to "the capitalist" many times.[2
