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𝟮𝟬 𝐂𝐡𝐚𝐫𝐚𝐜𝐭𝐞𝐫𝐢𝐬𝐭𝐢𝐜𝐬 of 𝐂𝐚𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐦 and 10 𝐄𝐱𝐚𝐦𝐩𝐥𝐞𝐬

Besides the pillars:

• Private Property
• Business freedom
• Supply & Demand

We could highlight several characteristics that make this economic system one of the most popular in today's society.

Characteristics of capitalism

1. Private Property

Every individual has the full right to own private property (house, vehicle, tools, business), which can be sold, leased, bought or transferred.

All individuals, groups or organizations have the legal right to the acquisition, ownership, use and disposition of property, including land, buildings, goods and intellectual property.

In some cases, there may be restrictions or certain limitations on private property rights, such as zoning regulations, environmental protection, or through certain taxes.

2. Right to Accumulate / Increase Wealth

Under capitalism, people have the opportunity to accumulate wealth through their own efforts. This can be done by starting a business, investing in stocks, or working in a well-paying job.

It can also occur through renting property or leasing machinery, selling goods or services, or through inheritance.

3. Freedom of opening

Individuals have full freedom to open, invest in, manage, join and close businesses or enterprises.

The basis of this right is the idea that individuals should be free to pursue their economic interests without undue interference from government or other institutions.

In practice, the ability to start a business can be affected by a number of factors, including access to capital, industry knowledge, legal and regulatory barriers, and discrimination.

Governments may impose regulations and restrictions to protect the public interest, although they often seek to encourage entrepreneurship and business development.

The right to start a business is considered an important aspect of economic and individual freedom and is often seen as a key driver of innovation, economic growth and job creation.

4. Freedom to compete

Everyone has the freedom to compete, or free competition, in which there is no control over buyers and sellers in the exchange of goods and services.

In a capitalist country, firms should be free to enter and exit markets. Competition among firms helps promote innovation, efficiency, and consumer choice as firms strive to outperform their rivals.

The ability to compete can be affected by a number of factors, such as access to capital, resources and expertise. In addition, government policies and regulations can also affect competition by either encouraging or discouraging it.

The freedom to compete is seen as a driver of economic growth and development because it encourages companies to strive for excellence and provides consumers with a wide range of choices.

5. Freedom to Work

Everyone has the freedom to work without hindrance or discrimination.

This right is a fundamental aspect of economic and social justice; it is based on the idea that everyone has the right to participate in the economy and to earn a living, regardless of their origin, education or social status.

In practice, people's ability to work can be affected by a number of factors, including access to education and training, discrimination and economic conditions.

Government policies and programs can play a role in promoting employment and supporting the unemployed.

6. Free movement between socio-economic classes

Everyone is free to move between different socio-economic strata or classes, depending on their efforts or strategies to manage their capital.

This right is based on the idea that individuals should be able to improve their economic and social status by working hard, getting educated, and by other means.

The ability of individuals to move from one socioeconomic class to another can be influenced by a number of factors, including access to education and training, economic conditions, discrimination, and social networks.

Government policies and programs may contribute to social mobility through supporting education and training, increasing access to credit and capital, and reducing barriers to upward mobility.

7. Right to a better wage

The worker is free to choose a new job with a better wage.

All people should receive fair remuneration for their work, enabling them to improve their economic situation, meet their basic needs and aspire to a better quality of life over time.

8. Better economic growth

Aims for economic growth for individuals and society.

This includes access to education, healthcare, employment and resources to build better lives for themselves and their families.

It is a fundamental human right recognized by many international organizations and is often seen as a key factor in reducing poverty and promoting social and economic development.

9. Market Economy

In capitalism, the prices of products and services are based on the law of supply and demand.

Law of Demand

As the price of a good or service increases, the quantity demanded by the buyer will decrease, all other things being equal.

Conversely, as the price of a good or service decreases, the quantity demanded by buyers increases.

The Law of Supply

The law of supply states that as the price of a good or service increases, the quantity supplied by sellers increases, all other things being equal.

Similarly, the quantity supplied by sellers decreases as the price of a good or service decreases.

10. Natural Formation of Socio-Economic Classes

Different socio-economic strata or classes are naturally created, consisting of three main groups: the bourgeoisie, the proletariat and the peasantry.

Some of the key factors that contribute to the creation of socioeconomic strata in a capitalist country are

Income: Well-paying jobs, investments, and other forms of income can help individuals accumulate wealth and move up the socioeconomic ladder.

Education: People with higher degrees and specialized skills tend to earn higher wages and enjoy greater job mobility than those with less education.

Social capital: People with powerful or influential connections may have greater access to employment opportunities, financial resources, and other forms of social capital that can help them get ahead.

Inheritance: Individuals who inherit significant wealth or assets from their families may have a significant advantage in accumulating wealth and moving up the socioeconomic ladder.

11. Free Market

Free market freedom without full state or government control, or at least some intervention, could be allowed in a moderate way.

Most modern economies have a role for government in regulating the economy, providing public goods and services, and addressing market failures, with some combination of government intervention and market mechanisms.

12. Product and service alternatives

The freedom to provide society with alternatives to products and services.

A range of choices can help ensure that consumers are not forced to support companies or industries with which they disagree or which engage in unethical or harmful practices.

The availability of alternative products and services is seen as an important aspect of economic and personal freedom, as it allows individuals to make choices in accordance with their own values and preferences.

13. Entrepreneurship Development

A system in which the development of entrepreneurship is encouraged to improve the economy and meet the needs of society.

Entrepreneurs create new businesses, products and services, which can lead to job creation, increased productivity and higher levels of economic activity.

Entrepreneurship can also have a positive social impact. It can address social and environmental problems, create jobs in underserved communities, and stimulate economic development in regions that may be struggling.

Entrepreneurs are often motivated by a desire to solve problems or meet unmet needs in the marketplace. This innovative drive can lead to new technologies, processes and products that can transform entire industries.

14. The right to save

A system in which savings and investment are unimpeded.

Policies and programs that encourage savings, such as tax incentives, financial education and access to affordable financial services, can support the right to save.

Saving is an important aspect of economic security and personal freedom, enabling people to plan for the future and pursue their goals with greater confidence and independence.

15. Healthy government intervention

Government may intervene by helping to subsidize business and removing anything that hinders healthy competition; it is a balance between the principles of economic freedom and social responsibility.

Government intervenes in the economy when necessary to ensure that markets function properly and that the needs and rights of all members of society are met.

Some things it can do:

Regulate

Government may regulate certain industries or practices to protect consumers, ensure fair competition, or promote public health and safety.

Welfare programs

Government can provide social welfare programs, such as health care, education, and social security, to ensure that the basic needs of all members of society are met.

Infrastructure Investment

The government can invest in infrastructure such as transportation, energy, and communication systems to facilitate economic growth and development.

Environmental Protection

The government can regulate businesses to protect the environment and avoid negative externalities such as pollution and climate change.

Antitrust

The government can enforce antitrust laws to prevent monopolies and promote competition in the marketplace.

16. Globalization

Capitalism promotes globalization because it creates a framework that encourages firms to expand beyond their local markets and seek new opportunities for growth and profit in other parts of the world.

Capitalism is driven by competition, and companies that are able to enter new markets and take advantage of global supply chains can often gain a competitive advantage over their rivals.

It is based on the principle of free trade, which means that goods and services can be traded across borders without undue barriers or restrictions.

This free flow of goods and services allows companies to access new markets and customers around the world, leading to increased economic activity and growth.

Let us also remember that capitalism promotes the free movement of capital, which means that investors and companies can invest in other countries and participate in the global economy.

This allows capital to flow to areas where it is most needed, promoting economic development and growth.

17. Exchange of Goods and Services

This is one of the basic principles of capitalism. This principle is based on the idea that markets should be free and open, and that individuals and businesses should be able to trade without undue government interference.

As long as they do so within the law.

18. Money

Money is a key feature of capitalism because it allows individuals and firms to trade with each other and accumulate wealth over time.

Money is also used to allocate resources and set prices. Prices are set by the market based on supply and demand, and individuals and businesses use prices as a signal of what goods and services are in demand and what resources are needed to produce them.

Money plays a critical role in facilitating economic activity and growth. Without money, it would be much more difficult for individuals and businesses to trade and allocate resources efficiently.

19. Making a profit

The main objective of businesses is to make a profit, which motivates them to produce goods and services efficiently.

Profit is important in a capitalist system for several reasons.

First, profit is an incentive for firms to produce goods and services in demand and to allocate resources efficiently.

Firms that are able to generate profits can reinvest them in their operations, expand their businesses, and create jobs, which helps drive economic growth and prosperity.

Second, profits serve as a signal to the marketplace about what goods and services are in demand and what resources are needed to produce them.

When companies are able to generate profits, they signal that they are providing something that is valued by consumers, and this encourages other companies to enter the market and compete for profits.

And third, profits allow individuals to accumulate wealth and invest in new opportunities, which helps foster innovation and entrepreneurship.

In a capitalist system, individuals are free to invest their profits in new ventures and take risks in search of new opportunities, helping to drive economic growth and progress.

20. Risk-Reward

When an individual pursues his or her individual good, it inevitably generates a good in society, e.g. starting a small bakery business creates a few jobs and adds a good to society (bread).

Risk-taking is an essential part of entrepreneurship and innovation, and in a capitalist system, those who are willing to take risks are often rewarded with greater profits and success.

This is because risk-taking involves investing time, money, and resources in an uncertain outcome, and those who are successful in taking these risks are able to reap the rewards that come with them.

The capitalist system rewards risk by allowing competition in the marketplace. When individuals or companies take risks and introduce new products or services, they are often competing with existing companies that may have come to dominate the market.

However, if the new product or service is successful, the entrepreneur can gain market share and make profits, which encourages other individuals and companies to take risks and pursue new ideas.

21. Division of Labor

In a capitalist economy, different individuals and organizations specialize in different areas of production, which helps to increase efficiency and productivity.

22. Consumer Sovereignty

Through their purchasing decisions, consumers have the power to determine what products and services are produced and sold.

Examples of Capitalism

1. Luis has bought a place to sell shoes; the former owner gave him the deeds of the property, which shows that he is the rightful owner.

2. Carlos made a $500 deposit from the proceeds of his cheese business last month. He is accumulating this money so he can travel to Europe next year.

3. My cousin and I are opening a cell phone business.

4. The U.S. is a purely capitalist country.

5. Banks are lending at low rates to farmers planting corn.

6. My uncle made the necessary arrangements to export his handmade clay pots.

7. By providing my service as a veterinarian, in addition to helping cats and dogs, I earn my own income.

8. When I started my business, I decided to lower the price to get customers quickly.

9. Today a new factory opened in my community, which hired almost all of us who were unemployed.

10. I am an electrician and I provide my services to the businesses near my home, and at the same time, I buy my tools at the hardware stores in the city where I live.