In the mid-19th century, a great system of economics, which would change our lives forever, was formed. That system was called capitalism. Capitalism is an economic system that was created by combining many parts of many other economic systems. Capitalism was based on the idea that private individuals, and business firms would carry out all factors of production and trade. They would also control prices and markets on their own. Mercantilism was the pre cursor to Capitalism although each of them different in many ways. Mercantilism was for the wealth of the state, while the motive of capitalism was for the wealth of the individual.
There were many outlines for this new system called capitalism, which would make it different from any other economic system we have ever seen. What made capitalism different from all other economic systems was that production facilities, land, and capital were all privately owned. What made capitalism different was the government did not control the economy entirely. Capital is based on the idea of free economic decisions for the people; basically the people were free to spend their money how they like. Companies on the other hand were able to decide what they wanted to produce and how much to charge. In a capitalistic society, the prices of products were regulated by the competition. This means that as long as the markets stay competitive prices would have to also. The system of capitalism was different than any other because non-profit organizations, like churches could also flourish. Capitalism introduced us to the idea of consumer sovereignty, which means that producers will have to best serve their customers in order to stay in business. Government would be used minimally as a tool to help to prevent injustice's from being done to the people. Government would protect the people from foreign attack, to guarantee contracts, and to uphold the peoples right to private property. Adam Smith was a British economist who helped to...
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