Block, SkipCaptcha, Automoderated users, edit, rollback
901
edits
Changes
Jump to navigation
Jump to search
Line 2:
Line 2: +
no edit summary
'''Capitalism''', also called '''free market economy''' is an economic system where the investment of capital, and production, distribution, income, and prices are determined not by government (as in a [[planned economy]]) but through the operation of a competitive market where decisions regarding transfer of money, goods (including capital goods), and services are voluntary and private rather than regulated and mandated by government (see [[law of supply and demand]]).
'''Capitalism''', also called '''free market economy''' is an economic system where the investment of capital, and production, distribution, income, and prices are determined not by government (as in a [[planned economy]]) but through the operation of a competitive market where decisions regarding transfer of money, goods (including capital goods), and services are voluntary and private rather than regulated and mandated by government (see [[law of supply and demand]]).
==Overview==
One self-regulating feature of capitalism is competition, which helps maintain fair market value for goods and services. However, ''unrestrained'' or ''pure'' capitalism may sometimes create a positive feedback loop in which a small number of individual accumulations of capital grow ever larger, eventually becoming so few as to limit effective competition, thus ceasing to strictly be free-market capitalism. In this regard, pure capitalism is unstable. Modern political systems have developed regulation mechanisms in an attempt to render capitalism more stable, including anti-trust regulation, trade tariffs, etc.
One self-regulating feature of capitalism is competition, which helps maintain fair market value for goods and services. However, ''unrestrained'' or ''pure'' capitalism may sometimes create a positive feedback loop in which a small number of individual accumulations of capital grow ever larger, eventually becoming so few as to limit effective competition, thus ceasing to strictly be free-market capitalism. In this regard, pure capitalism is unstable. Modern political systems have developed regulation mechanisms in an attempt to render capitalism more stable, including anti-trust regulation, trade tariffs, etc.