Capitalism

Capitalism

 

is an economic system in which the means of production, trade and industry are controlled by private owners with the aim that the business gets the maximum profit.

 

Capitalism according to some economists:

1. Karl Marx
Karl Max believes that a system in which the price of goods and market policies is determined by the owner of capital in order to achieve maximum profit.

2. Adam Smith
According to Adam Smith, Capitalism is a system that can create prosperity for the people of the country if the government does not intervene in market policies and mechanisms.

3. Max Weber
Whereas Max Weber said that Capitalism is an economic system that applies to a market and is driven to generate profits by exchanging activities in that market.

 

The characteristics of Capitalism

There are several of these characteristics of capitalism, namely:

  • Recognition of each individual’s personal rights.
  • Ownership of production equipment by individuals.
  • Individuals are free to choose their own work or business.
  • Humans are seen as homo-economicus, ie individuals who always pursue their own benefits.
  • Individualism is based on materaliasm or hedonism.
  • The economy is governed by market mechanisms.
  • The government has a very small role in economic activity.
  • The motive that drives the economy is to make a profit.

 

Also Read Other Economic Systems:

Socialism

Market Economy

Supply and Demand

Traditional Economy

Mixed Economy

Planned Economy

Gift Economy

Barter Economy

 

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