Introduction of Capitalism

An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

First, Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned. Through capitalism, the land, labor, and capital are owned, operated, and traded for the purpose of generating profits, without force or fraud, by private individuals either singly or jointly, and investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. A distinguishing feature of capitalism is that each person owns his or her own labor and therefore is allowed to sell the use of it to employers. In a "capitalist state", private rights and property relations are protected by the rule of law of a limited regulatory framework. In the modern capitalist state, legislative action is confined to defining and enforcing the basic rules of the market, though the state may provide some public goods and infrastructure.

Second, the history of capitalism dates back to early forms of merchant capitalism practiced in the Middle East and Western Europe during the Middle Ages, though many economic historians consider the Netherlands as the first thoroughly capitalist country. In early modern Europe it featured the wealthiest trading city (Amsterdam) and the first full-time stock exchange. The inventiveness of the traders led to insurance and retirement funds as well as such less benign phenomena as the boom-bust cycle, the world's first asset-inflation bubble, the tulip mania of 1636-1637, and according to Murray Sayle, the world's first bear raider – Isaac le Maire, who forced prices down by dumping stock and then buying it back at a discount.

Over the course of the past five hundred years, capital has been accumulated by a variety of different methods, in a variety of scales, and associated with a great deal of variation in the concentration of economic power and wealth. Much of the history of the past five hundred years is concerned with the development of capitalism in its various forms, its condemnation and defense, and its rejection, particularly by socialists. There are many economic systems such as capitalism so in this essay I will explain advantage and disadvantage of capitalism.