In a capitalistic society, most factors of production and distribution are owned by a person or groups of people, not the state. Consumers have multiple choices. It is the consumer who dictates what is purchased, produced, and what is successful. Each individual has the free will to decide whether to support or purchase any product or service.
Since capitalism is about individualism, improvement of financial position is a primary goal. An entrepreneur takes personal risks, makes personal sacrifices, and hopefully, makes personal gains in terms of financial and societal. Personal risk a part of capitalism where the prospect of success cannot exist without the prospect of failure.
As opposed to some other economic systems, under capitalism, what is produced and how much is produced is mostly determined by market demand. This means that society is served through meeting the needs and wants of buyers with little or no waste. Notice the qualifier in the mention of buyers. Those show do not have money are not buyers but that does not mean they do not need or want products being produced. This is likely the primary drawback of capitalism and has never been completely resolved.
The Breviary: There are endless forms of economic systems among nations. While no system is perfect, none are known to produce such stable and fruitful standards of living as capitalism. This most likely due to the focus on the individual and more importantly the entrepreneur. A proper definition of the concept can be found here.
Capitalism is up for debate in the 2016 election season. A European friend of mine commented on how amazing the USA was because it was like we have a national revolution every four years under the election system. Each election cycle seems to challenge the foundation on America’s political system and capitalistic economic system.
You might be shocked or disappointed to know how many people cannot define the word capitalism. The definitions and debates are endless. Most experts would agree on a few basic tenants.
- Capitalism is about personal property ownership.
- Financial gain is a primary goal.
- Market demand and supply is the driver, not government control.