Economic systems: what is capitalism

General definition

What is capitalism? It is a system of economy that is based on private ownership of means of production and the creation of goods or services for profit. Characteristic traits include competitive markets, wage labor and accumulation of capital. Capitalism can come in different forms, like laissez-faire, welfare capitalism and state capitalism. It is believed by many theorists to promote economic growth and to allow for more opportunities for individuals to have more income. However, some critics of capitalism also attribute such aspects as social inequality and unfair distribution of wealth and power.

Types of capitalism

Depending on country and region capitalism can appear in many different variants. Below are the major ones.

  • Mercantilism

This is an early form of capitalism that is associated with intertwining of national business interests to state-interest and imperialism. Example: early colonists living inAmerica.

  • Free-market capitalism

What is capitalism with a free-market model? It is a system where prices for goods and services are set freely by the forces of supply and demand with no intervention by government policy.

  • Social-market economy

What is capitalism with social-market economy? It is a system where prices form with minimal intervention by the government. Example: Western and Northern European countries.

  • State capitalism

What is capitalism with a state system? It suggests state ownership of the means of production within a state. The government influences the economy on a wider scale.

  • Corporate capitalism

Corporate capitalism is associated with the dominance of hierarchical, bureaucratic corporations

  • Mixed economy

What is capitalism with mixed economy? This kind of system consists of both private and public ownership of the means of production. Macroeconomic policies are intended to correct market failures.

Looking for the best business to start?

Currently the best industries for a new business

Want to start a business but not sure what would be a safer bet in the current economy? There are several industries that would be good for the best business to start right now.

  • E-commerce

People are spending more and more money online because you can order special customized items with ease, especially when the Internet allows you to compare any products on the current market. If you are looking for the best business to start at this time – e-commerce is a very good bet.

  • Restaurants

Restaurants are predicted to increase 4.5% this year and 5.5% next year. Growing disposable incomes allow people to eat out more, take your chance to provide that service for the best business to start.

  • Mobile games

Mobile gaming is one of the fastest growing industries to date. This is even expected to accelerate as more and more people own smartphones. Such games can be hugely profitable if you manage to attract a following big enough.

  • Big data

Another good idea for the best business to start right now can be organization and analysis of electronic records. The world is increasingly getting digitalized, which means that large companies need more people to help them deal with all that data. This is profitable to everyone since it helps businesses their markets and customers better.

  • Water

The demand for clean water is constantly increasing while our planet’s supplies keep dwindling. This just might be the best business to start, especially in the long run. If everyone in the world used as much water as the average American, we would run out of clean water within only eight years.