POLITICAL SCIENCE - PART 3

That is, if everyone gets on board. Oops, too late.

Capitalism is an economic system based on private ownership of the means of production and the creation of goods and services for profit. Remember your Economics 101 - supply vs. demand?

Central characteristics of capitalism include private property, capital accumulation, wage labour and competitive markets. In a capitalist market economy, investments are determined by private decision and the parties to a transaction typically determine the prices at which they exchange assets, goods, and services.

Capitalism is the most successful wealth-creating economic system that the world has ever known; no other system, according to economist Joseph Schumpeter, has benefited "the common people" as much. Capitalism, he observed, creates wealth through advancing continuously to ever higher levels of productivity and technological sophistication; this process, known as creative destruction, requires that the "old" be destroyed before the "new" can take over.

The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism. Economists, political economists, and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism and state capitalism. Each model has employed varying degrees of dependency on free markets, public ownership, obstacles to free competition, and inclusion of state-sanctioned social policies.

The extent to which different markets are free, as well as the rules defining private property, become matters of politics and of policy. Many states have a mixed economy, which combines elements of both free markets with state interventionism, and in some cases, with economic planning.

Capitalism has existed under many forms of government, in many different times, places, and cultures, but in modern times it has become dominant and much less restrained. Following the decline of mercantilism, mixed capitalist systems became dominant in the Western world and continue to spread.


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