Capitalism is an economic system which is based on the private ownership of resources to generate wealth. It is a system of production, distribution, and consumption which relies on the free market and is driven by the pursuit of profit. The core belief of capitalism is that individuals should be free to compete and invest in the open market, with the potential for individuals to create wealth for themselves and others.
Under capitalism, the production, distribution, and exchange of goods is left predominantly to private business owners who own the factors of production such as land, labour, and capital. The core principles of capitalism mean that it relies heavily on the rational self-interests of individuals to determine economic decisions. This means that economic activities are concerned with how much money is being generated and what will be the most profitable option.
Capitalism also relies on a limited government role in the economy, which typically means a minimal level of taxation, regulation, and government involvement in economic activity. This allows the