Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price systems, private property, property rights recognition, self-interest, economic freedom, meritocracy, work ethic, consumer sovereignty, profit motive, entrepreneurship, commodification, voluntary exchange, wage labor, sustenance and the production of commodities. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Mercantilism is a nationalist economic policy that is designed to maximize the exports and minimize the imports for an economy. In other words, it seeks to maximize the accumulation of resources within the country and use those resources for one-sided trade.
A mixed economy is an economic system that accepts both private businesses and nationalized government services, like public utilities, safety, military, welfare, and education. A mixed economy also promotes some form of regulation to protect the public, the environment, or the interests of the state.
Late capitalism is a concept first used in print by German economist Werner Sombart at the start of the 20th century. In the late 2010s, the term began to be used in the United States and Canada to refer to corporate capitalism.
Neo-feudalism or new feudalism is a theorized contemporary rebirth of policies of governance, economy, and public life, reminiscent of those which were present in many feudal societies. Such aspects include, but are not limited to: Unequal rights and legal protections for common people and for nobility, dominance of societies by a small and powerful elite, a lack of social mobility, and relations of lordship and serfdom between the elite and the people, where the former are rich and the latter poor.
Immanuel Maurice Wallerstein was an American sociologist and economic historian. He is perhaps best known for his development in sociology of world-systems approach. He was a Senior Research Scholar at Yale University from 2000 until his death in 2019, and published bimonthly syndicated commentaries through Agence Global on world affairs from October 1998 to July 2019.
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
A theory of capitalism describes the essential features of capitalism and how it functions. The history of various such theories is the subject of this article.
World-systems theory is a multidisciplinary approach to world history and social change which emphasizes the world-system as the primary unit of social analysis. World-systems theorists argue that their theory explains the rise and fall of states, income inequality, social unrest, and imperialism.
Samir Amin was an Egyptian-French Marxian economist, political scientist and world-systems analyst. He is noted for his introduction of the term Eurocentrism in 1988 and considered a pioneer of Dependency Theory.
Capitalism is an economic system based on the private ownership of the means of production. This is generally taken to imply the moral permissibility of profit, free trade, capital accumulation, voluntary exchange, wage labor, etc. Its emergence, evolution, and spread are the subjects of extensive research and debate. Debates sometimes focus on how to bring substantive historical data to bear on key questions. Key parameters of debate include: the extent to which capitalism is natural, versus the extent to which it arises from specific historical circumstances; whether its origins lie in towns and trade or in rural property relations; the role of class conflict; the role of the state; the extent to which capitalism is a distinctively European innovation; its relationship with European imperialism; whether technological change is a driver or merely a secondary byproduct of capitalism; and whether or not it is the most beneficial way to organize human societies.
Giovanni Arrighi was an Italian economist, sociologist and world-systems analyst, from 1998 a Professor of Sociology at Johns Hopkins University. His work has been translated into over fifteen languages.
Between the 9th and 14th centuries, the Muslim world developed many advanced economic concepts, techniques and usages. These ranged from areas of production, investment, finance, economic development, taxation, property use such as Hawala: an early informal value transfer system, Islamic trusts, known as waqf, systems of contract relied upon by merchants, a widely circulated common currency, cheques, promissory notes, early contracts, bills of exchange, and forms of commercial partnership such as mufawada.
An economic ideology is a set of views forming the basis of an ideology on how the economy should run. It differentiates itself from economic theory in being normative rather than just explanatory in its approach, whereas the aim of economic theories is to create accurate explanatory models to describe how an economy currently functions. However, the two are closely interrelated, as underlying economic ideology influences the methodology and theory employed in analysis. The diverse ideology and methodology of the 74 Nobel laureates in economics speaks to such interrelation.
In world-systems theory, the semi-periphery countries are the industrializing, mostly capitalist countries which are positioned between the periphery and core countries. Semi-periphery countries have organizational characteristics of both core countries and periphery countries and are often geographically located between core and peripheral regions as well as between two or more competing core regions. Semi-periphery regions play a major role in mediating economic, political, and social activities that link core and peripheral areas.
This article covers the Economic history of Europe from about 1000 AD to the present. For the context, see History of Europe.
Islamic capitalism was active during the Islamic Golden Age and Arab Agricultural Revolution, where an early market economy and form of merchant capitalism took root between the 8th–12th centuries. A vigorous monetary economy was based on a widely-circulated currency and the integration of monetary areas that were previously independent. Business techniques and forms of business organisation employed during this time included contracts, bills of exchange, long-distance international trade, forms of partnership (mufawadha) such as limited partnerships (mudharaba), and forms of credit, debt, profit, loss, capital (al-mal), capital accumulation, circulating capital, capital expenditure, revenue, cheques, promissory notes, trusts, savings accounts, transactional accounts, pawning, loaning, exchange rates, bankers, money changers, ledgers, deposits, assignments, the double-entry bookkeeping system, and lawsuits. Organizational enterprises independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced. Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards. Some have argued that these economic activities laid the foundations for the development of modern capitalism.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
In Karl Marx's critique of political economy and subsequent Marxian analyses, the capitalist mode of production refers to the systems of organizing production and distribution within capitalist societies. Private money-making in various forms preceded the development of the capitalist mode of production as such. The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.
Theories of imperialism are a range of theoretical approaches to understanding the expansion of capitalism into new areas, the unequal development of different countries, and economic systems that may lead to the dominance of some countries over others. These theories are considered distinct from other uses of the word imperialism which refer to the general tendency for empires throughout history to seek power and territorial expansion. The theory of imperialism is often associated with Marxist economics, but many theories were developed by non-Marxists. Most theories of imperialism, with the notable exception of ultra-imperialism, hold that imperialist exploitation leads to warfare, colonization, and international inequality.
