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92-815: [REDACTED] This article relies excessively on references to primary sources . Please improve this article by adding secondary or tertiary sources . Find sources:   "Reinertsen"  –  news   · newspapers   · books   · scholar   · JSTOR ( July 2020 ) ( Learn how and when to remove this message ) Reinertsen AS Company type Private Founded 1946 Headquarters Trondheim , Norway Area served Scandinavia Key people Erik Reime Reinertsen (CEO) Torkild Reime Reinertsen (Chairman) Revenue €400 million (2011) Number of employees 2,100 (2011) Website reinertsen .no Reinertsen

184-489: A financial infrastructure of money and investment that makes possible credit and debt , entrepreneurship , commodification , voluntary exchange , wage labor , production of commodities and services , and a strong emphasis on innovation and economic growth . In a market economy , decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets —whereas prices and

276-489: A title or a certificate of ownership. The rights to a property may be transferred from one "owner" to another. A transfer tax is a tax on the passing of title to property from one person (or entity) to another. An owner may request that, after death, private property be transferred to family members, through inheritance . In certain cases, ownership may be lost to the public interest. Private real estate may be confiscated or used for public purposes, for example, to build

368-573: A "natural right" that God had not bestowed exclusively on the monarchy: the labor theory of property . This stated that property is a natural result of labor improving upon nature; and thus by labor expenditure, the laborer becomes entitled to its produce. Influenced by the rise of mercantilism , Locke argued that private property was antecedent to and thus independent of government. Locke distinguished between "common property", by which he meant common land , and property in consumer goods and producer-goods. His chief argument for property in land ownership

460-477: A broader and expanding money-based economy. The system put pressure on both landlords and tenants to increase the productivity of agriculture to make profit; the weakened coercive power of the aristocracy to extract peasant surpluses encouraged them to try better methods, and the tenants also had incentive to improve their methods in order to flourish in a competitive labor market . Terms of rent for land were becoming subject to economic market forces rather than to

552-408: A bundle is composed of a set of rights that allows the owner of the asset to control it and decide on its use, claim the value generated by it, exclude others from using it, and the right to transfer the ownership (set of rights over the asset) of it to another holder. In Marxian economics and socialist politics, a distinction is made between "private property" and " personal property ". The former

644-524: A component of the development of a post-capitalist economic system . In response to the socialist critique, the Austrian School economist Ludwig Von Mises argued that private property rights are a requisite for what he called "rational" economic calculation and that the prices of goods and services cannot be determined accurately enough to make efficient economic calculation without having clearly defined private-property rights. Mises argued that

736-585: A formal property system where ownership and transactions are clearly recorded. According to de Soto, this is the process by which physical assets are transformed into capital, which in turn may be used in many more ways and much more efficiently in the market economy. A number of Marxian economists have argued that the inclosure acts in England and similar legislation elsewhere were an integral part of capitalist primitive accumulation and that specific legal frameworks of private land ownership have been integral to

828-448: A given period. Marx's conception of private property has proven influential for many subsequent economic theories and for communist , socialist , and anarchist political movements, and led to the widespread association of private property—particularly private property in the means of production —with capitalism . Private property is a legal concept defined and enforced by a country's political system . The area of law that deals with

920-423: A large middle class were good for democracy. He also argued that a market economy provided a substitute for government control of the economy, which reduces the risks of tyranny and authoritarianism. In his book The Road to Serfdom (1944), Friedrich Hayek (1899–1992) asserted that the free-market understanding of economic freedom as present in capitalism is a requisite of political freedom . He argued that

1012-505: A large number of sellers nor to a market in final equilibrium . Competition is widespread throughout the market process . It is a condition where "buyers tend to compete with other buyers, and sellers tend to compete with other sellers". In offering goods for exchange, buyers competitively bid to purchase specific quantities of specific goods which are available, or might be available if sellers were to choose to offer such goods. Similarly, sellers bid against other sellers in offering goods on

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1104-631: A less protectionist policy, with the 1846 repeal of the Corn Laws and the 1849 repeal of the Navigation Acts . Britain reduced tariffs and quotas , in line with David Ricardo's advocacy of free trade . Broader processes of globalization carried capitalism across the world. By the beginning of the nineteenth century, a series of loosely connected market systems had come together as a relatively integrated global system, in turn intensifying processes of economic and other globalization. Late in

1196-474: A result of the Industrial Revolution. The accumulation of capital is the primary mechanism through which capitalist economies promote economic growth . However, it is a characteristic of such economies that they experience a business cycle of economic growth followed by recessions. The term "capitalist", meaning an owner of capital , appears earlier than the term "capitalism" and dates to

1288-496: A road. The legal framework of a country or society defines some of the practical implications of private property. There are no expectations that these rules will define a rational and consistent model of economics or social system. Although contemporary neoclassical economics —currently the dominant school of economics—rejects some of the assumptions of the early philosophers underpinning classical economics, it has been argued that neoclassical economics continues to be influenced by

1380-576: A safe environment for investment and capitalism. Similarly, Suharto 's authoritarian reign and extirpation of the Communist Party of Indonesia allowed for the expansion of capitalism in Indonesia . The term "capitalism" in its modern sense is often attributed to Karl Marx . In his Das Kapital , Marx analyzed the " capitalist mode of production " using a method of understanding today known as Marxism . However, Marx himself rarely used

1472-686: A small scale for centuries in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labor. Simple commodity exchange and consequently simple commodity production, which is the initial basis for the growth of capital from trade, have a very long history. During the Islamic Golden Age , Arabs promulgated capitalist economic policies such as free trade and banking. Their use of Indo-Arabic numerals facilitated bookkeeping . These innovations migrated to Europe through trade partners in cities such as Venice and Pisa. Italian mathematicians traveled

1564-503: A social relationship in which the property owner takes possession of anything that another person or group produces with that property and capitalism depends on private property. The socialist critique of private ownership is heavily influenced by the Marxist analysis of capitalist property forms as part of its broader critique of alienation and exploitation in capitalism. Although there is considerable disagreement among socialists about

1656-528: A social system cannot be said to have existed before that date". England began a large-scale and integrative approach to mercantilism during the Elizabethan Era (1558–1603). A systematic and coherent explanation of balance of trade was made public through Thomas Mun 's argument England's Treasure by Forraign Trade, or the Balance of our Forraign Trade is The Rule of Our Treasure. It was written in

1748-424: A socialist system, which by definition would lack private property in the factors of production, would be unable to determine appropriate price valuations for the factors of production. According to Mises, this problem would make rational socialist calculation impossible. In capitalism , ownership can be viewed as a "bundle of rights" over an asset that entitles its holder to a strong form of authority over it. Such

1840-605: Is a civil engineering , construction, and petroleum industry supply company based in Trondheim , Norway . It was established in 1946 and remains family-owned. Its CEO is Erik Reinertsen and chairman is Torkil R. Reinertsen. In 2011, Reinertsen had a revenue of €400 million and 2,100 employees. It has offices in Trondheim , Orkanger , Oslo , Bergen , Gothenburg , Stockholm , Murmansk (Russia) and Szczecin (Poland). References [ edit ] ^ "About us - Reinertsen" . www.reinertsen.com . Archived from

1932-416: Is a fundamental threat to repressive political leaders and greatly diminishes their power to coerce. Some of Friedman's views were shared by John Maynard Keynes , who believed that capitalism was vital for freedom to survive and thrive. Freedom House , an American think-tank that conducts international research on, and advocates for, democracy, political freedom and human rights , has argued that "there

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2024-649: Is a high and statistically significant correlation between the level of political freedom as measured by Freedom House and economic freedom as measured by the Wall Street Journal/Heritage Foundation survey ". In Capital in the Twenty-First Century (2013), Thomas Piketty of the Paris School of Economics asserted that inequality is the inevitable consequence of economic growth in a capitalist economy and

2116-412: Is another name for monopoly and can hamper allocative efficiency. Through the use of taxation and modified Vickrey auctions , they argue that partial common property ownership is a more efficient and just way to organize the economy. The justifications for private property rights have also been critiqued as tools of empire that enable land appropriation. According to academic commentator Brenna Bhandar,

2208-470: Is defined as the means of production about private ownership over an economic enterprise based on socialized production and wage labor whereas the latter is defined as consumer goods or goods produced by an individual. Prior to the 18th century, private property usually referred to land ownership . Private property in the means of production is the central element of capitalism criticized by socialists. In Marxist literature, private property refers to

2300-598: Is distinguished from private property ownership and Western understandings of land law . Capitalism This is an accepted version of this page Capitalism is an economic system based on the private ownership of the means of production and their operation for profit . The defining characteristics of capitalism include private property, capital accumulation , competitive markets , price systems , recognition of property rights , self-interest , economic freedom , meritocracy , work ethic , consumer sovereignty , economic efficiency , profit motive ,

2392-579: Is foundational to capitalism , an economic system based on the private ownership of the means of production and their operation for profit . As a legal concept, private property is defined and enforced by a country's political system . The first evidence of private property may date back to the Babylonians in 1800 BC, as evidenced by the archeological discovery of Plimpton 322 , a clay tablet used for calculating property boundaries. However, written discussions of private property were not seen until

2484-588: Is governed by stable economic laws of its own. In the English language , the term "capitalism" first appears, according to the Oxford English Dictionary (OED), in 1854, in the novel The Newcomes by novelist William Makepeace Thackeray , where the word meant "having ownership of capital". Also according to the OED, Carl Adolph Douai , a German American socialist and abolitionist , used

2576-477: Is no competition. A monopoly occurs when a firm has exclusivity over a market. Hence, the firm can engage in rent seeking behaviors such as limiting output and raising prices because it has no fear of competition. Governments have implemented legislation for the purpose of preventing the creation of monopolies and cartels. In 1890, the Sherman Antitrust Act became the first legislation passed by

2668-422: Is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself". Socialist theorists note that, unlike mercantilists, capitalists accumulate their profits while expecting their profit rates to remain the same. This causes problems as earnings in

2760-588: Is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861 ("Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labor"). Karl Marx frequently referred to the " capital " and to the "capitalist mode of production" in Das Kapital (1867). Marx did not use the form capitalism but instead used capital , capitalist and capitalist mode of production , which appear frequently. Due to

2852-763: The World Bank and the IMF ), large institutional investors and a well-funded banking system . A significant managerial class has emerged and decides on a significant proportion of investments and other decisions. A different future than that envisioned by Marx has started to emerge—explored and described by Anthony Crosland in the United Kingdom in his 1956 book The Future of Socialism and by John Kenneth Galbraith in North America in his 1958 book The Affluent Society , 90 years after Marx's research on

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2944-409: The enclosure of agricultural land in England, especially as debated in the 17th and 18th centuries, accompanied efforts in philosophy and political thought—by Thomas Hobbes (1588–1679), James Harrington (1611–1677) and John Locke (1632–1704), for example—to address the phenomenon of property ownership . In arguing against supporters of absolute monarchy , John Locke conceptualized property as

3036-410: The neoliberal global economy would have been impossible without the fall of communism . Harvard Kennedy School economist Dani Rodrik distinguishes between three historical variants of capitalism: The relationship between democracy and capitalism is a contentious area in theory and in popular political movements. The extension of adult-male suffrage in 19th-century Britain occurred along with

3128-479: The transatlantic cable , the radiotelephone , the steamship and railways allowed goods and information to move around the world to an unprecedented degree. In the United States, the term "capitalist" primarily referred to powerful businessmen until the 1920s due to widespread societal skepticism and criticism of capitalism and its most ardent supporters. Contemporary capitalist societies developed in

3220-413: The working population by their claim to ownership in the form of stock or private equity. This exploitative arrangement is perpetuated due to the structure of capitalist society. Capitalism is regarded as a class system akin to historical class systems like slavery and feudalism . Private ownership has also been criticized on non-Marxist ethical grounds by advocates of market socialism . According to

3312-422: The 1620s and published in 1664. European merchants , backed by state controls, subsidies and monopolies , made most of their profits by buying and selling goods. In the words of Francis Bacon , the purpose of mercantilism was "the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of

3404-464: The 16th and 18th centuries. The Industrial Revolution of the 18th century established capitalism as a dominant mode of production , characterized by factory work and a complex division of labor . Through the process of globalization , capitalism spread across the world in the 19th and 20th centuries, especially before World War I and after the end of the Cold War. During the 19th century, capitalism

3496-643: The 18th-century decisively shaped globalization. After the First and Second Opium Wars (1839–60) and the completion of the British conquest of India by 1858, vast populations of Asia became consumers of European exports. Europeans colonized areas of sub-Saharan Africa and the Pacific islands. Colonisation by Europeans, notably of sub-Saharan Africa, yielded valuable natural resources such as rubber , diamonds and coal and helped fuel trade and investment between

3588-402: The 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide, with the mixed economy as its dominant form in the industrialized Western world. Industrialization allowed cheap production of household items using economies of scale , while rapid population growth created sustained demand for commodities. The imperialism of

3680-527: The European imperial powers, their colonies and the United States: The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in

3772-575: The Mediterranean talking to Arab traders and returned to popularize the use of Indo-Arabic numerals in Europe. The economic foundations of the feudal agricultural system began to shift substantially in 16th-century England as the manorial system had broken down and land began to become concentrated in the hands of fewer landlords with increasingly large estates. Instead of a serf -based system of labor, workers were increasingly employed as part of

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3864-546: The Persian Empire, and emerged in the Western tradition at least as far back as Plato . Before the 18th century, English speakers generally used the word "property" about land ownership . In England , "property" came to have a legal definition in the 17th century. Private property defined as property owned by commercial entities emerged with the great European trading companies of the 17th century. The issue of

3956-531: The United Kingdom (1979–1990). Public and political interest began shifting away from the so-called collectivist concerns of Keynes's managed capitalism to a focus on individual choice , called "remarketized capitalism". The end of the Cold War and the dissolution of the Soviet Union allowed for capitalism to become a truly global system in a way not seen since before World War I . The development of

4048-503: The United States Congress to limit monopolies. Wage labor, usually referred to as paid work, paid employment, or paid labor, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labor power under a formal or informal employment contract . These transactions usually occur in a labor market where wages or salaries are market-determined . In exchange for

4140-543: The West from 1950 to the present and this type of system continues throughout the world—relevant examples started in the United States after the 1950s , France after the 1960s , Spain after the 1970s , Poland after 2015 , and others. At this stage most capitalist markets are considered developed and characterized by developed private and public markets for equity and debt, a high standard of living (as characterized by

4232-529: The business of a third party by offering the most favourable terms". It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly valued uses and encouraging efficiency . Smith and other classical economists before Antoine Augustine Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to

4324-578: The development of capitalism. Private property rights are not absolute, as in many countries the state has the power to seize private property, typically for public use, under the powers of eminent domain . In capitalist economics, market competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share and sales volume by varying the elements of the marketing mix : price, product, distribution and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure

4416-754: The development of industrial capitalism and representative democracy became widespread at the same time as capitalism, leading capitalists to posit a causal or mutual relationship between them. However, according to some authors in the 20th-century, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including fascist regimes, absolute monarchies and single-party states . Democratic peace theory asserts that democracies seldom fight other democracies, but others suggest this may be because of political similarity or stability, rather than because they are "democratic" or "capitalist". Critics argue that though economic growth under capitalism has led to democracy, it may not do so in

4508-634: The distribution of goods and services are mainly determined by competition in goods and services markets. Economists, historians, political economists, and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free-market capitalism , anarcho-capitalism , state capitalism , and welfare capitalism . Different forms of capitalism feature varying degrees of free markets , public ownership , obstacles to free competition, and state-sanctioned social policies . The degree of competition in markets and

4600-461: The economic progress of man was that age which came to an end in August 1914. From the 1870s to the early 1920s, the global financial system was mainly tied to the gold standard . The United Kingdom first formally adopted this standard in 1821. Soon to follow were Canada in 1853, Newfoundland in 1865, the United States and Germany ( de jure ) in 1873. New technologies, such as the telegraph ,

4692-466: The economist James Yunker, the ethical case for market socialism is that because passive property income requires no mental or physical exertion on the part of the recipient, and its appropriation by a small group of private owners is the source of the vast inequalities in contemporary capitalism, social ownership in a market economy would resolve the major cause of social inequality and its accompanying social ills. Weyl and Posner argue that private property

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4784-399: The era of merchant capitalism and mercantilism as the origin of modern capitalism, although Karl Polanyi argued that the hallmark of capitalism is the establishment of generalized markets for what he called the "fictitious commodities", i.e. land, labor and money. Accordingly, he argued that "not until 1834 was a competitive labor market established in England, hence industrial capitalism as

4876-493: The expense of another state. During the Industrial Revolution , industrialists replaced merchants as a dominant factor in the capitalist system and effected the decline of the traditional handicraft skills of artisans , guilds and journeymen . Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work process and

4968-533: The extent to which an owner will be able to exercise rights over the same. The rights to private property often come with limitations. For example, local government may enforce rules about what kind of building may be built on private land ( building code ), or whether a historical building may be demolished or not. Theft is common in many societies, and the extent to which central administration will pursue property crime varies enormously. Some forms of private property are uniquely identifiable and may be described in

5060-522: The following: In free market and laissez-faire forms of capitalism, markets are used most extensively with minimal or no regulation over the pricing mechanism. In mixed economies, which are almost universal today, markets continue to play a dominant role, but they are regulated to some extent by the state in order to correct market failures , promote social welfare , conserve natural resources , fund defense and public safety or other rationale. In state capitalist systems, markets are relied upon

5152-411: The form of government". Smith further argued that civil government could not exist without property, as the government's main function was to define and safeguard property ownership. In the 19th century, the economist and philosopher Karl Marx (1818–1883) provided an influential analysis of the development and history of property formations and their relationship to the technical productive forces of

5244-477: The future as authoritarian régimes have been able to manage economic growth using some of capitalism's competitive principles without making concessions to greater political freedom . Political scientists Torben Iversen and David Soskice see democracy and capitalism as mutually supportive. Robert Dahl argued in On Democracy that capitalism was beneficial for democracy because economic growth and

5336-413: The government requests that owners pay for the privilege of ownership. A property tax is an ad valorem tax on the value of a property, usually levied on real estate . The tax is levied by the governing authority of the jurisdiction in which the property is located. It may be imposed annually or at the time of a real estate transaction , such as in real estate transfer tax . Under a property-tax system,

5428-429: The government requires or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value. The four broad types of property taxes are land , improvements to land (immovable human-made objects, such as buildings), personal property (movable human-made objects), and intangible property . The social and political context in which private property is administered will determine

5520-475: The idea that if all participants focus on their own goals, society's well-being will be water under the bridge, Smith maintains that despite the concerns of intellectuals, "global trends will hardly be altered if they refrain from pursuing their personal ends." He insisted that the actions of a few participants cannot alter the course of society. Instead, Smith maintained that they should focus on personal progress instead and that this will result in overall growth to

5612-517: The land will be put to productive use and its value protected by the landowner . If the owners must pay property taxes , this forces the owners to maintain a productive output from the land to keep taxes current. Private property also attaches a monetary value to land, which can be used to trade or as collateral . Private property thus is an important part of capitalization within the economy . Socialist economists are critical of private property as socialism aims to substitute private property in

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5704-586: The language implemented in property legislation dictates colonized peoples as unable to effectively own and utilize their land. It is suggested that personal rights are interchangeable with property rights, therefore communities that utilize communal methods of land ownership are not equally validated by private property ideals. It is also argued by critical race theorist Cheryl Harris that race and property rights have been conflated over time, with only those qualities unique to white settlement recognized legally. Indigenous use of land, focusing on common ownership,

5796-696: The least corrupt, operates largely under a one-party rule. Furthermore, it does not vigorously defend freedom of expression as evidenced by its government-regulated press , and its penchant for upholding laws protecting ethnic and religious harmony, judicial dignity and personal reputation. The private (capitalist) sector in the People's Republic of China has grown exponentially and thrived since its inception, despite having an authoritarian government. Augusto Pinochet 's rule in Chile led to economic growth and high levels of inequality by using authoritarian means to create

5888-406: The least, with the state relying heavily on state-owned enterprises or indirect economic planning to accumulate capital. Competition arises when more than one producer is trying to sell the same or similar products to the same buyers. Adherents of the capitalist theory believe that competition leads to innovation and more affordable prices. Monopolies or cartels can develop, especially if there

5980-430: The legacy of natural moral theory and the concept of natural rights , which has led to the presentation of private market exchange and private property rights as "natural rights" inherent in nature. Economic liberals (defined as those who support a private sector -driven market economy) consider private property to be essential for the construction of a prosperous society. They believe private ownership of land ensures

6072-403: The market mechanism is the only way of deciding what to produce and how to distribute the items without using coercion. Milton Friedman and Ronald Reagan also promoted this view. Friedman claimed that centralized economic operations are always accompanied by political repression . In his view, transactions in a market economy are voluntary and the wide diversity that voluntary activity permits

6164-428: The market, competing for the attention and exchange resources of buyers. Competition results from scarcity , as it is not possible to satisfy all conceivable human wants, and occurs as people try to meet the criteria being used to determine allocation. In the works of Adam Smith, the idea of capitalism is made possible through competition which creates growth. Although capitalism had not entered mainstream economics at

6256-447: The means of production for social ownership or public property . Socialists generally argue that private property relations limit the potential of the productive forces in the economy when the productive activity becomes a collective activity, where the role of the capitalist becomes redundant (as a passive owner). Socialists generally favor social ownership either to eliminate the class distinctions between owners and workers and as

6348-434: The mid-17th century. "Capitalism" is derived from capital , which evolved from capitale , a late Latin word based on caput , meaning "head"—which is also the origin of " chattel " and " cattle " in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries to refer to funds, stock of merchandise, sum of money or money carrying interest. By 1283, it

6440-424: The money paid as wages (usual for short-term work-contracts) or salaries (in permanent employment contracts), the work product generally becomes the undifferentiated property of the employer. A wage laborer is a person whose primary means of income is from the selling of their labor in this way. The profit motive , in the theory of capitalism, is the desire to earn income in the form of profit. Stated differently,

6532-691: The original on 2013-08-10. Authority control databases [REDACTED] VIAF Retrieved from " https://en.wikipedia.org/w/index.php?title=Reinertsen&oldid=1129417902 " Categories : Construction and civil engineering companies of Norway Companies based in Trondheim Construction and civil engineering companies established in 1946 Norwegian companies established in 1946 Hidden categories: Articles lacking reliable references from July 2020 All articles lacking reliable references Private ownership Private property

6624-484: The previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment . In the mid-18th century a group of economic theorists, led by David Hume (1711–1776) and Adam Smith (1723–1790), challenged fundamental mercantilist doctrines—such as the belief that the world's wealth remained constant and that a state could only increase its wealth at

6716-599: The previous stagnant system of custom and feudal obligation. The economic doctrine prevailing from the 16th to the 18th centuries is commonly called mercantilism . This period, the Age of Discovery , was associated with the geographic exploration of foreign lands by merchant traders, especially from England and the Low Countries . Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist methods. Most scholars consider

6808-491: The reason for a business's existence is to turn a profit. The profit motive functions according to rational choice theory , or the theory that individuals tend to pursue what is in their own best interests. Accordingly, businesses seek to benefit themselves and/or their shareholders by maximizing profit. In capitalist theoretics, the profit motive is said to ensure that resources are being allocated efficiently. For instance, Austrian economist Henry Hazlitt explains: "If there

6900-435: The rest of society do not increase in the same proportion. The relationship between the state , its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century. Hernando de Soto is a contemporary Peruvian economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in

6992-517: The resulting concentration of wealth can destabilize democratic societies and undermine the ideals of social justice upon which they are built. States with capitalistic economic systems have thrived under political regimes deemed to be authoritarian or oppressive. Singapore has a successful open market economy as a result of its competitive, business-friendly climate and robust rule of law. Nonetheless, it often comes under fire for its style of government which, though democratic and consistently one of

7084-613: The role of intervention and regulation , as well as the scope of state ownership, vary across different models of capitalism. The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning . Capitalism in its modern form emerged from agrarianism in England , as well as mercantilist practices by European countries between

7176-486: The routine of work tasks; and eventually established the domination of the capitalist mode of production . Industrial Britain eventually abandoned the protectionist policy formerly prescribed by mercantilism. In the 19th century, Richard Cobden (1804–1865) and John Bright (1811–1889), who based their beliefs on the Manchester School , initiated a movement to lower tariffs . In the 1840s Britain adopted

7268-652: The soil; the regulation of prices...". After the period of the proto-industrialization , the British East India Company and the Dutch East India Company , after massive contributions from the Mughal Bengal , inaugurated an expansive era of commerce and trade. These companies were characterized by their colonial and expansionary powers given to them by nation-states. During this era, merchants, who had traded under

7360-440: The state of capitalism in 1867. The postwar boom ended in the late 1960s and early 1970s and the economic situation grew worse with the rise of stagflation . Monetarism , a modification of Keynesianism that is more compatible with laissez-faire analyses, gained increasing prominence in the capitalist world, especially under the years in office of Ronald Reagan in the United States (1981–1989) and of Margaret Thatcher in

7452-465: The subject is called property law . The enforcement of property law concerning private property is a matter of public expense. Defence of property is a common method of justification used by defendants who argue that they should not be held liable for any loss and injury that they have caused because they were acting to protect their property . Courts have generally ruled that the use of force may be acceptable. In many political systems,

7544-420: The term "capitalism" by many authors as "mainly rhetorical, functioning less as an actual concept than as a gesture toward the need for a concept". Scholars who are uncritical of capitalism rarely actually use the term "capitalism". Some doubt that the term "capitalism" possesses valid scientific dignity, and it is generally not discussed in mainstream economics , with economist Daron Acemoglu suggesting that

7636-418: The term "capitalism" should be abandoned entirely. Consequently, understanding of the concept of capitalism tends to be heavily influenced by opponents of capitalism and by the followers and critics of Karl Marx. Capitalism, in its modern form, can be traced to the emergence of agrarian capitalism and mercantilism in the early Renaissance , in city-states like Florence . Capital has existed incipiently on

7728-525: The term "capitalism" while it was used twice in the more political interpretations of his work, primarily authored by his collaborator Friedrich Engels . In the 20th century, defenders of the capitalist system often replaced the term "capitalism" with phrases such as free enterprise and private enterprise and replaced "capitalist" with rentier and investor in reaction to the negative connotations associated with capitalism. In general, capitalism as an economic system and mode of production can be summarized by

7820-518: The term "private capitalism" in 1863. There is no universally agreed upon definition of capitalism; it is unclear whether or not capitalism characterizes an entire society, a specific type of social order, or crucial components or elements of a society. Societies officially founded in opposition to capitalism (such as the Soviet Union ) have sometimes been argued to actually exhibit characteristics of capitalism. Nancy Fraser describes usage of

7912-466: The term in his first work, What is Property? (1840), to refer to the owners of capital. Benjamin Disraeli used the term in his 1845 work Sybil . Alexander Hamilton used "capitalist" in his Report of Manufactures presented to the United States Congress in 1791. The initial use of the term "capitalism" in its modern sense is attributed to Louis Blanc in 1850 ("What I call 'capitalism' that

8004-414: The time of Smith, it is vital to the construction of his ideal society. One of the foundational blocks of capitalism is competition. Smith believed that a prosperous society is one where "everyone should be free to enter and leave the market and change trades as often as he pleases." He believed that the freedom to act in one's self-interest is essential for the success of a capitalist society. In response to

8096-446: The validity of certain aspects of Marxist analysis, the majority of socialists are sympathetic to Marx's views on exploitation and alienation. Socialists critique the private appropriation of property income because such income does not correspond to a return on any productive activity and is generated by the working class , it represents exploitation. The property-owning (capitalist) class lives off passive property income produced by

8188-410: The word being coined by socialist critics of capitalism, economist and historian Robert Hessen stated that the term "capitalism" itself is a term of disparagement and a misnomer for economic individualism . Bernard Harcourt agrees with the statement that the term is a misnomer, adding that it misleadingly suggests that there is such a thing as " capital " that inherently functions in certain ways and

8280-560: Was largely unregulated by the state, but became more regulated in the post– World War II period through Keynesianism , followed by a return of more unregulated capitalism starting in the 1980s through neoliberalism . The existence of market economies has been observed under many forms of government and across a vast array of historical periods , geographical locations , and cultural contexts. The modern industrial capitalist societies that exist today developed in Western Europe as

8372-583: Was that it led to improved land management and cultivation over common land. In the 18th century, during the Industrial Revolution , the moral philosopher and economist Adam Smith (1723–1790), in contrast to Locke, distinguished between the "right to property" as an acquired right, and natural rights . Smith confined natural rights to "liberty and life". Smith also drew attention to the relationship between employee and employer and identified that property and civil government were dependent upon each other, recognizing that "the state of property must always vary with

8464-763: Was used in the sense of the capital assets of a trading firm and was often interchanged with other words—wealth, money, funds, goods, assets, property and so on. The Hollantse ( German : holländische ) Mercurius uses "capitalists" in 1633 and 1654 to refer to owners of capital. In French, Étienne Clavier referred to capitalistes in 1788, four years before its first recorded English usage by Arthur Young in his work Travels in France (1792). In his Principles of Political Economy and Taxation (1817), David Ricardo referred to "the capitalist" many times. English poet Samuel Taylor Coleridge used "capitalist" in his work Table Talk (1823). Pierre-Joseph Proudhon used

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