Capitalism is a political and economic ideology characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and the distribution of goods determined mainly by competition in a free market. It is a system in which the means of production are privately owned and operated for profit. This profit is generated through efficient use of the resources, obtained through a voluntary exchange in a free market.
The roots of capitalism can be traced back to the late Middle Ages in Europe, where it gradually emerged following the demise of feudalism. However, it wasn't until the 16th century that capitalism began to evolve into the form that we recognize today. This period, known as mercantilism, was characterized by the rise of commerce and economic growth, which led to the creation of a middle class.
The Industrial Revolution in the 18th and 19th centuries marked a significant turning point for capitalism. During this time, technological advancements led to increased production capabilities, which in turn led to the growth of factories and mass production. This period also saw the development of the capitalist economic system, with the establishment of stock exchanges and the proliferation of companies and corporations.
In the 20th century, capitalism evolved further with the rise of consumerism and the development of the service sector. This period also saw the introduction of welfare capitalism and state capitalism, which sought to combine the efficiency of capitalism with social welfare and public ownership respectively.
Throughout its history, capitalism has been associated with economic growth, innovation, and increased living standards. However, it has also been criticized for leading to economic inequality, environmental degradation, and for its focus on profit at the expense of social and ethical considerations.
Today, capitalism is the dominant economic system in the world, with different countries practicing various forms of it, such as laissez-faire capitalism, welfare capitalism, and state capitalism. Despite its dominance, capitalism continues to evolve and adapt to changing economic and social conditions.
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