is an economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment is determined by the owners of the factors of production
in financial and capital markets, and prices and the distribution of goods are mainly determined by competition in the market.
Economists, political economists, and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire
or free market
capitalism, welfare capitalism
, and state capitalism
. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition, and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership
vary across different models of capitalism
; the extent to which different markets are free, as well as the rules defining private property, are matters of politics and of policy. Most existing capitalist economies are mixed economies, which combine elements of free markets with state intervention, and in some cases, with economic planning.
Capitalism has existed under many forms of government, in many different times, places, and cultures. Following the decline of mercantilism, mixed capitalist systems became dominant in the Western world and continue to spread.