Capitalism is a simple type of economic organisation in this type of economic system all means of production like all farm factories mineral resources etc are owned managed and control by private entrepreneurs they are free to learn them in a way they like their main motive is to earn the profit this form of organisation is also known as market economy or market system or laissez faire system.
Characteristic of capitalism
- Right of private property:- the most important feature of capitalism is the existence of private property and the system of inheritance. individual can hold or sell their property as they like or they can passition to their heirs after death. this use of property depend on the will of the individual as long as they do not infringe on the legal property site of others.
- .freedom of enterprise:- a very outstanding feature of capitalism is the economic freedom. freedom of enterprise means that everybody is free to choose any trade or business or industry or occupation as one like as one feels more profitable
- limited role of government :-in capitalism government also play apart but it is limited. its role is required only to define and protect property, rights , ensure freedom of entry and exit , enforce contractual agreement among private enterprenuer etc.
- profit motive:- profit motive is at the heart of a capitalistic system producer produces only those good and services which ensure higher profit.
- competition:- competition is found among producers and consumers producer compete to produce better sala compete to attract maximum number of consumer and consumer compete with each other in obtaining good and services of better qualities to satisfy their needs.
- freedom to save and invest :- the freedom to save and invest is employed in the freedom of consumer in consumer so virginity in capitalist economy and individual is free to save as much as he can and invest or spend that saved money the way he like.
