Question

What is the term for an economic system in which the means of production are held largely in private hands and the main incentive for economic activity is the accumulation of profits?

Answer 1

Capitalism is the term for an economic system in which the means of production are held largely in private hands and the main incentive for economic activity is the accumulation of profits.

Capitalism is an economic system in which the means of production are privately owned by firms. Means of production include land, tools, technology, and so forth, which is needed in order to produce goods and services.

In a capitalist economy, capital assets such as factories, mines, and railroads can be privately owned and controlled by private sectors. Here the main incentive for economic activity by private sectors is to make profits.

Hence, the essential feature of capitalism is the motive to make a profit.

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