Capitalism

In a capitalist economy, property and businesses are owned and controlled by individuals. The production and prices of goods and services are determined by how much demand they generate and how difficult they are to produce. Theoretically, this dynamic drives companies to make the best products they can for as cheaply as they can; capitalism is intended to drive business owners to find more efficient ways of producing quality goods. For consumers, this dynamic is intended to create a system wherein they have the freedom to choose the best and cheapest products.

This emphasis on efficiency takes priority over equality. An equal distribution of goods and services among all members of a society is of little concern within a capitalist system. According to the economic theories that underpin capitalism, inequality is the driving force that encourages innovation, which results in economic development. In a capitalist economy, the state does not directly employ the workforce. This leads to high levels of unemployment during times of economic recession .