Business
What is Capitalism?
Capitalism is an economic system where private individuals and businesses own property and the means of production, and prices, production, and trade are driven by free markets and the pursuit of profit.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains capitalism.
Key things to understand
- 1Private ownership of businesses and resources.
- 2Markets set prices through supply and demand.
- 3Competition and the profit motive drive innovation and efficiency.
- 4Critics point to inequality and market failures that need regulation.
Frequently asked questions
- What is capitalism in simple terms?
- An economy where private owners run businesses for profit and free markets decide prices and production.
- What's the difference between capitalism and socialism?
- Capitalism emphasizes private ownership and markets; socialism emphasizes collective or state ownership and planning.
- What are the criticisms of capitalism?
- It can create inequality, boom-bust cycles, and market failures, which is why most economies regulate it.