Features of Capitalist Economy

A capitalist economy is one in which the means of production are owned and controlled by the private corporations and government has no interference on the working of private corporations. Given below are some of the features of capitalist economy –

  1. Under capitalist economy making profit is the main reason why companies produce goods and services and all other things are secondary.
  2. Under capitalist economy few people have control and therefore they are rich while others are not rich and therefore there inequalities in capitalist economy.
  3. Under capitalist economy people are free to spend their income in the way they want and producers of goods and services tend to produce those goods and services which are demanded by the consumers, so if consumers demand products which are not ethical these companies will produce such goods as they are driven by profits and not ethics.
  4. Capitalist economy is characterized by high competition among producers of goods and services and these companies resort to techniques such as heavy advertising, discount in order to lure customers towards them.
  5. Under capitalist economy government role is limited as compared to socialist economy where government role is more prominent.
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