Capitalism

Overview

"Businessmen are the symbol of a free society — the symbol of America."
—Ayn Rand

"If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another."
—Milton Friedman, Free to Choose

Capitalism generally refers to an economic system in which the means of production are all or mostly privately owned and operated for profit, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy. It is usually considered to involve the right of individuals and groups of individuals acting as "legal persons" or corporations to trade capital goods, labor, land and money. Capitalism has been dominant in the Western world since the break up of feudalism, but some feel that the term "mixed economies" more precisely describes most contemporary economies, due to these economies containing both private-owned and state-owned enterprises, or that combines elements of capitalism and socialism, or a mix of market economy and planned economy characteristics.

Capitalist economic practices became institutionalized in Europe between the 16th and 19th centuries, although some features of capitalist organization existed in the ancient world. Capitalism has emerged as the Western world's dominant economic system since the decline of feudalism, which eroded traditional political and religious restraints on capitalist exchange. Capitalism gradually spread from Europe, particularly from Britain, across political and cultural frontiers. In the 19th and 20th centuries, capitalism provided the main, but not exclusive, means of industrialization throughout much of the world.