Capitalism is defined in different ways, but all descriptions boil down to the fact that it is a socio-economic system that has a number of characteristics: a free market, the desire to increase profits, private ownership of the means of production and wage labor. It can also be noted that today in all countries with a capitalist economy, state control and free competition are necessarily present.
Instructions
Step 1
Capitalism is an economic theory that regulates the production and distribution of goods in such a way as to ensure complete freedom of commercial activity and equality of all people from a legal point of view. The capitalist system is based on private property. The engine of the economy in this case is a path of development in which capital and capitalization would increase over time.
Step 2
In the Soviet interpretation, capitalism is interpreted in a similar way, with some additions. This is a system in which the means of production are privately owned, while hired labor is actively exploited, which leads to an increase in capital from the owners of production facilities, but it is understood that the hired workers themselves practically do not get rich with such an organization of labor. Capitalism was ascribed a social significance equal to economic. It was seen as a milestone in the development of human society. In this context, capitalism was preceded by feudalism, followed by socialism as a more progressive socio-economic system.
Step 3
The main hallmark of capitalism is the fact that this system is controlled by the market, without human intervention. That is, the main issue is cost, and the production and distribution of goods is carried out on the basis of market criteria and mechanisms. The main regulating factors in this case are supply and demand.
Step 4
In fact, the so-called "ideal" or pure capitalism, where capital would really dominate, can not be found anywhere in the world. In each country, the economy is partly regulated by the government, and it is also significantly influenced by free competition, which creates factors that are outside of supply and demand. The role of state control is quite important in any form of modern capitalism.
Step 5
There are several main distinguishing features for the capitalist system. First, it is commerce as the basis of economic activity. Practically all goods and services are intended for sale under such an organization; subsistence farming is permissible, but it is almost completely absent. The exchange of goods for cash occurs freely, and not compulsorily, as under other systems. Secondly, the production facilities are privately owned. Thirdly, most of the population lives on wage labor, that is, labor is sold for wages.