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Capitalism is defined as an economic system characterised by private or corporate ownership of capital goods; by investments that are determined by private decision; and by prices, production, and the distribution of goods that are determined mainly by competition in a free market. In this system, individuals and companies own and direct most of the resources used to produce goods and services, including land and other natural resources labour, and capital which includes factories and equipment and sometimes the money used in businesses. Adam Smith is often referred to as the Father of Capitalism. According to him, it is a system in which an invisible hand would maintain the market without government intervention. The government exists merely to protect individual rights, which also include the establishment of an "army to protect against foreign invaders; a police force to protect against domestic criminals; and a court system to settle disputes that arise, enforce contracts, and punish criminals according to objectively predefined laws."
4. Political freedom
Economic freedom helps political freedom. If governments own the means of production and set prices, it invariably leads to a powerful state and creates a large bureaucracy which may lead to problems like corruption, total control, regulations that limit diversity and competition, lack of incentives etc.
6. Exchange of Culture
Capitalism has led to international trade and exchange of know-how. People in different countries have come nearer to each other. The development of the means of transport and communication has facilitated contacts among the peoples of the world thereby leading to exchange of ideas and culture.
7. Progress of Civilization
Capitalism was instrument in inventing new machines and increasing the production of material goods. Man is to day more civilized than his ancestors.
o Majority of countries (almost all liberal democracies and most authoritarian systems) in the world use capitalism as their dominant economic system, including the United States, Canada and Mexico, all of the 27 countries of the European Union.
Obviously, capitalism has failed to bring about the moral development of man. It is injurious both to society and the individual. In short, it has proved a curse to humanity instead of a blessing.