Editing Capitalism (section)

{{Short description|Economic system based on private ownership}}
{{About|an economic system}}
{{Redirect|Capitalist|other uses|Capitalist (disambiguation)}}
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{{Use American English|date=January 2014}}
{{Use dmy dates|date=June 2020}}
{{Capitalism sidebar}}
{{Economic systems sidebar|expanded=by ideology}}
{{Liberalism sidebar|related}}

'''Capitalism''' is an [[economic system]] based on the [[private ownership]] of the [[means of production]] and their use for the purpose of obtaining [[Profit (economics)|profit]].{{efn|Sources:<br /><ref>{{cite book |last1=Zimbalist |last2=Sherman |last3=Brown |first1=Andrew |first2=Howard J. |first3=Stuart |title=Comparing Economic Systems: A Political-Economic Approach |publisher=[[Harcourt College Publishing]] |date=October 1988 |isbn=978-0-15-512403-5 |pages=[https://archive.org/details/comparingeconomi0000zimb_q8i6/page/6 6–7] |quote=Pure capitalism is defined as a system wherein all of the means of production (physical capital) are privately owned and run by the capitalist class for a profit, while most other people are workers who work for a salary or wage (and who do not own the capital or the product). |url=https://archive.org/details/comparingeconomi0000zimb_q8i6/page/6}}</ref><ref>{{cite book |last1=Rosser |first1=Mariana V. |last2=Rosser |first2=J Barkley |title=Comparative Economics in a Transforming World Economy |publisher=[[MIT Press]] |date=23 July 2003 |isbn=978-0-262-18234-8 |page=7 |quote=In capitalist economies, land and produced means of production (the capital stock) are owned by private individuals or groups of private individuals organized as firms.}}</ref><ref>{{cite book |first=Chris |last=Jenks |title=Core Sociological Dichotomies |quote=Capitalism, as a mode of production, is an economic system of manufacture and exchange which is geared toward the production and sale of commodities within a market for profit, where the manufacture of commodities consists of the use of the formally free labor of workers in exchange for a wage to create commodities in which the manufacturer extracts surplus value from the labor of the workers in terms of the difference between the wages paid to the worker and the value of the commodity produced by him/her to generate that profit. |location=London; Thousand Oaks, CA; New Delhi |publisher=[[SAGE Publishing]] |page=383}}</ref><ref>{{cite book |title=The Challenge of Global Capitalism : The World Economy in the 21st Century |last=Gilpin |first=Robert |author-link=Robert Gilpin |isbn=978-0-691-18647-4 |oclc=1076397003 |date=2018|publisher=Princeton University Press }}</ref><ref>{{cite journal |last1=Sternberg |first1=Elaine |title=Defining Capitalism |journal=[[Economic Affairs (journal)|Economic Affairs]] |date=2015 |volume=35 |issue=3 |pages=380–396 |doi=10.1111/ecaf.12141|s2cid=219373247  |issn=0265-0665}}</ref>}} This socioeconomic system has developed historically through several stages and is defined by a number of basic constituent elements: [[private property]], [[profit motive]], [[capital accumulation]], [[Competition (economics)|competitive markets]], [[commodification]], [[Wage labour|wage labor]], and an emphasis on [[innovation]] and [[economic growth]].{{efn|Sources:<br /><ref>{{cite book |last1=Heilbroner |first1=Robert L. |title=The New Palgrave Dictionary of Economics |date=2018 |publisher=[[Palgrave Macmillan]] |location=London |isbn=978-1-349-95189-5 |pages=1378–1389 |chapter-url=https://link.springer.com/referenceworkentry/10.1057/978-1-349-95189-5_154 |language=en |chapter=Capitalism |doi=10.1057/978-1-349-95189-5_154}}</ref><ref>{{cite book |last1=Hodgson |first1=Geoffrey M. |title=Conceptualizing Capitalism: Institutions, Evolution, Future |date=2015 |publisher=[[University of Chicago Press]] |location=Chicago |isbn=9780226168142 |url=https://press.uchicago.edu/ucp/books/book/chicago/C/bo18523749.html}}</ref><ref name = "harris">{{cite journal |last1=Harris |first1=Neal |last2=Delanty |first2=Gerard |title=What is capitalism? Toward a working definition |journal=[[Social Science Information]] |date=2023 |volume=62 |issue=3 |pages=323–344 |doi=10.1177/05390184231203878 |doi-access=free}}</ref><ref>{{cite journal |last1=Berend |first1=Ivan T. |title=Capitalism |journal=[[International Encyclopedia of the Social & Behavioral Sciences|International Encyclopedia of the Social & Behavioral Sciences (Second Edition)]] |date=2015 |pages=94–98 |doi=10.1016/B978-0-08-097086-8.62003-2|isbn=978-0-08-097087-5 }}</ref><ref>{{cite journal |last1=Antonio |first1=Robert J. |last2=Bonanno |first2=Alessandro |title=Capitalism |journal=The Wiley-Blackwell Encyclopedia of Globalization |date=2012 |doi=10.1002/9780470670590.wbeog060|isbn=978-1-4051-8824-1 }}</ref><ref>{{cite book |last1=Beamish |first1=Rob |chapter=Capitalism |title=Core Concepts in Sociology |date=2018 |pages=17–22 |doi=10.1002/9781394260331.ch6|isbn=978-1-119-16861-4 }}</ref><ref>{{cite book |last1=Gregory |first1=Paul |last2=Stuart |first2=Robert |year=2013 |title=The Global Economy and its Economic Systems |publisher=[[South-Western College Publishing]] |page=41 |isbn=978-1-285-05535-0 |quote=Capitalism is characterized by private ownership of the factors of production. Decision making is decentralized and rests with the owners of the factors of production. Their decision making is coordinated by the market, which provides the necessary information. Material incentives are used to motivate participants.}}</ref>}} Capitalist economies tend to experience a [[business cycle]] of economic growth followed by [[Recession|recessions]].<ref name="HP">{{cite journal |last1=Hodrick |first1=R. |last2=Prescott |first2=E. |year=1997 |title=Postwar US business cycles: An empirical investigation |url=http://www.kellogg.northwestern.edu/research/math/papers/451.pdf |journal=Journal of Money, Credit and Banking |volume=29 |issue=1 |pages=1–16 |doi=10.2307/2953682 |jstor=2953682 |s2cid=154995815}}</ref>

Economists, historians, political economists, and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include ''[[Laissez-faire capitalism|laissez-faire]]'' or [[free-market capitalism]], [[state capitalism]], and [[welfare capitalism]]. Different [[forms of capitalism]] feature varying degrees of [[free market]]s, [[public ownership]],<ref name="gregorystuart">{{cite book|last1=Gregory |first1=Paul |last2=Stuart |first2=Robert |title=The Global Economy and its Economic Systems |publisher=[[South-Western College Publishing]] |date=2013 |isbn=978-1-285-05535-0 |page=107 |quote=Real-world capitalist systems are mixed, some having higher shares of public ownership than others. The mix changes when privatization or nationalization occurs. Privatization is when property that had been state-owned is transferred to private owners. [[Nationalization]] occurs when privately owned property becomes publicly owned.}}</ref> obstacles to free competition, and state-sanctioned [[social policies]]. The degree of [[Competition (economics)|competition]] in [[Market (economics)|markets]] and the role of [[Economic interventionism|intervention]] and [[Regulatory economics|regulation]], as well as the scope of state ownership, vary across different models of capitalism.<ref name="Modern Economics 1986, p. 54">{{cite book |title=Macmillan Dictionary of Modern Economics |edition=3rd |date=1986 |pages=54}}</ref><ref>{{cite magazine |last=Bronk |first=Richard |title=Which model of capitalism?|url=http://oecdobserver.org/news/archivestory.php/aid/345/Which_model_of_capitalism_.html |url-status=live |magazine=[[OECD Observer]] |publisher=[[OECD]] |date=Summer 2000 |volume=1999 |issue=221–222 |pages=12–15 |archive-url=https://web.archive.org/web/20180406200423/http://oecdobserver.org/news/archivestory.php/aid/345/Which_model_of_capitalism_.html |archive-date=6 April 2018 |access-date=6 April 2018}}</ref> The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are [[mixed economies]] that combine elements of free markets with state intervention and in some cases [[economic planning]].<ref name="Stilwell">{{cite book |last=Stilwell |first=Frank |author-link=Frank Stilwell (economist) |title=Political Economy: the Contest of Economic Ideas |edition=1st |publisher=[[Oxford University Press]] |location=Melbourne, Australia |date=2002}}</ref>

Capitalism in its modern form emerged from [[agrarianism]] in [[England]], as well as [[Mercantilism|mercantilist]] practices by European countries between the 16th and 18th centuries. The Industrial Revolution of the 18th century established [[Capitalist mode of production (Marxist theory)|capitalism as a dominant mode of production]], characterized by [[factory|factory work]], and a complex [[Division of labour|division of labor]]. Through the process of [[globalization]], capitalism spread across the world in the 19th and 20th centuries, especially before [[World War I]] and after the end of the [[Cold War]]. During the 19th century, capitalism was largely unregulated by the state, but became more regulated in the post–[[World War II]] period through [[Keynesianism]], followed by a return of more unregulated capitalism starting in the 1980s through [[neoliberalism]].