- The Meaning of Capitalism
- The Characteristics of Capitalism
- The Merits of and Demerits of Capitalism
The Meaning of Capitalism
Capitalism is a political system that economically allows and promotes individual or private ownership and control of the means of production and distribution of wealth. Simply put, it is a political system in which individuals are allowed to own the major means of production, distribution and exchange. Examples of countries that practice capitalism are the United States of America, Japan, France and Nigeria.
The Characteristics of Capitalism
Capitalism is associated with the following characteristics:
- Private ownership of the means of production, distribution and exchange.
- Competition among the various owners of the means of production.
- It is driven by the profit motive
- Society is divided into classes
- Minimal or zero government intervention.
- It encourages innovation.
The Merits of Capitalism
The following are the merits of capitalism as a system of government:
- Healthy competition brings out the best in the society
- Specialization is encouraged as people tend to shift emphasis to areas they are familiar with
- There is freedom of choice, since there are varieties of goods and services.
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