It is one among the worldwide economic systems, which depends on the thought of private ownership of all productive elements, which contributes to achieving financial profits, and capitalism is additionally referred to as the economic and form of government that controls all components of a country’s economy, and which contributes to providing the acceptable control tools within the various commercial markets. And among other definitions of capitalism: it’s the economic environment that depends on the investment of personal property, of the means of production, the exchange of wealth, and its distribution to individual owners, institutions, and states.
History of capitalism:
the primary ideas of capitalism began to seem within the sixteenth century AD in European societies; During the amount between the seventeenth and eighteenth centuries AD, with the emergence of signs of the economic revolution in Europe, capitalism witnessed an interesting development; Especially in support of personal production within the main economic projects, which witness a high percentage of consumption by the population; that’s why the primary capitalism went beyond any economic projects that were developed, or that didn’t provide any public services to the people.
within the period of your time during which natural resources were discovered in Europe, this led to a rise in prices; due to the capitalists ’interest in interest in money and business sectors; Specifically, the commercial ones that affect society generally , and an example of that’s the interest in implementing a unified medium of exchange , which imposed a group of methods that were later utilized in European economic development, and which encouraged privatization; Through the transfer of public enterprises from the general public sector to the private sector.
within the eighteenth century AD in England, capitalist ideas witnessed an interesting development. Specifically, after moving from commercial exchange to interest in industry, counting on accumulated capital, which contributed to supporting technical industrial production, and therefore the person curious about formulating the principles and economic ideas of capitalism as an financial system was the famous economist Adam Smith; Through his book The Wealth of countries , during which he pointed to the necessity to liberalize the varied markets.
within the nineteenth century AD, capitalist ideas spread among European countries; Specifically, after strengthening political liberalism, which trusted the appliance of trade and a spotlight to balanced financial budgets; Through the utilization of the gold standard for money, and at the start of the 20 th century AD and with the outbreak of the primary war , the utilization of the gold standard was dispensed with, and replaced with private currencies in countries that dominated banking exchange in Europe, and these ideas later transferred to the us of America; After the top of the Second war , the capitalist financial system became one among the worldwide economic systems.
Characteristics of capitalism:
Capitalism features a set of characteristics:
- Capitalism depends on the utilization of a free market economic system; so as to be ready to achieve the specified profits, by counting on offering the products after setting their prices, with a transparent competition between the establishments that are similar in nature of labor .
- Interest in distributing prices in appropriate ways. By counting on the appliance of laws associated with supply, demand, and related goods and services that are sold within the commercial market.
- Follow-up of the financial markets and every one the weather related to them, which include studying and setting prices for instruments and securities; Examples include: bonds, stocks, derivative securities, cash, and other materials that are available within the financial markets.
- that specialize in the distribution of profits to the owners and shareholders within the various sectors of labor , which contributes to the belief of the most goal of capitalism; it’s a guarantee of creating a profit as a results of work.
- Governmental supervision of economic activity, by applying equal opportunities between institutions and corporations within the market , while ensuring fair distribution of production, faraway from monopoly, and most governments that implement some sort of capitalism use a group of laws and legislations that contribute to the organization of economic work. Correctly.