Meaning and Features of Capitalism

What is Capitalism?

Capitalism is a political and economic system in which the means of production, distribution, and exchange are owned and controlled by private individuals and government economic activity is at a minimum level.

Capitalist societyThe term society is derived from the Latin word 'socius' meaning friendship or companionship. Society is a community, nation or group of people who share the same traditions, institutions, rules and... More is made up of two classes: the bourgeoisieThe bourgeoisie is the ruling class in Marx's theory of class struggle under capitalism. The bourgeoisie is the property-owning class who own the means of production (e.g. factories) and employ and... More, or business owners, who control the means of production, and the proletariat, or workers, whose labour transforms raw commodities into valuable economic goods.

An example of a capitalist economy is the USA.

Features of Capitalism Include:

(i) The essence of engaging in economic activity is to maximize profit.

(ii) There is the existence of the principle of competition, and rivalry as there are many consumers and producers.

(iii) There is freedom of choice for consumers, producers, and workers.

(iv) The economy is subject to the market forces of demand and supply.

(iv) There is the principle of specialization.

(v) Labour is marketable.

(vi) There is respect for democratic principles such as respect for the rule of law, the guarantee of fundamental human rights, the existence of political parties, free and fair elections, etc.

(vii) Political power is decentralized.

(viii) There is the existence of classes, and social stratification.

(ix) There is the existence of a class war between the bourgeoisie and the proletariat.