Modern capitalist societies developed in Western Europe in a process that led to the Industrial Revolution. Market economies have existed under many forms of government and in many different times, places and cultures.
Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning. The extent to which different markets are free and the rules defining private property are matters of politics and policy. The degree of competition in markets and the role of intervention and regulation as well as the scope of state ownership vary across different models of capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition and state-sanctioned social policies. These include laissez-faire or free-market capitalism, state capitalism and welfare capitalism. Įconomists, historians, political economists and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. In a capitalist market economy, decision-making and investments are determined by owners of wealth, property, ability to manouver capital or production ability in capital and financial markets-whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor. Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.
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