Capitalism is an economic system in which private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market – known as a market economy – rather than through central planning – known as a planned economy or command economy.
The purest form of capitalism is free market or laissez-faire capitalism. Here, private individuals are unrestrained. They may determine where to invest, what to produce or sell, and at which prices to exchange goods and services.
The laissez-faire marketplace operates without checks or controls. Today, most countries practice a mixed capitalist system that includes some degree of government regulation of business and ownership of select industries.
In brief, Capitalism is an economic system characterised by private ownership of the means of production, especially in the industrial sector. Capitalism depends on the enforcement of private property rights, which provide incentives for investment in and productive use of productive capital.
Capitalism and free enterprise are often seen as synonymous. In truth, they are closely related yet distinct terms with overlapping features. It is possible to have a capitalist economy without complete free enterprise, and possible to have a free market without capitalism.
From the Book – ‘ Know Everything about Corporate Social Responsibility ‘
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(India CSR)
