is an economy regime and a mode of production
in which trade, industries, and the means of production
are largely or entirely privately owned. Such private firms and proprietorships are usually operated for profit
, but may be operated as private nonprofit organizations
. Central characteristics of capitalism include private property
, capital accumulation
, wage labour
and, in some situations, fully competitive markets
. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged
The degree of competition, role of intervention and regulation, and scope of state ownership varies across different models of capitalism. Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism, crony capitalism, corporatism, "third way" social democracy and state capitalism. Each model has employed varying degrees of dependency on free markets, public ownership, obstacles to free competition, and inclusion of state-sanctioned social policies.
The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy. Many states have a mixed economy, which combines elements of both capitalism and centrally planned economics. Capitalism has existed under many forms of government, in many different times, places, and cultures. Following the demise of feudalism, mixed capitalist systems became dominant in the Western world and continues to spread.
Towards the late 1970s, Hong Kong became established as a major entrepôt between the world and China. The city has developed into a major global trade hub and financial centre, and is regarded as a world city and one of the eight Alpha+ cities. It ranked fifth on the 2014 Global Cities Index after New York City, London, Tokyo and Paris. The city has one of the highest per capita incomes in the world, and the most severe income inequality among the advanced economies. It has a high Human Development Index and is ranked highly in the Global Competitiveness Report. Hong Kong is the third most important financial centre after New York and London. The service economy, characterised by low taxation and free trade, has been regarded as one of the world's most laissez-faire economic policies, and the currency, the Hong Kong dollar, is the 13th most traded currency in the world.
Karl Marx (/mɑrks/; German pronunciation: [ˈkaɐ̯l ˈmaɐ̯ks]; 5 May 1818 – 14 March 1883) was a German philosopher, economist, sociologist, journalist, and revolutionary socialist. Marx's work in economics laid the basis for much of the current understanding of labour and its relation to capital, and subsequent economic thought. He published numerous books during his lifetime, the most notable being The Communist Manifesto (1848) and Das Kapital (1867–1894).
Born into a wealthy middle-class family in Trier in the Prussian Rhineland, Marx studied at the Universities of Bonn and Berlin where he became interested in the philosophical ideas of the Young Hegelians. After his studies he wrote for Rheinische Zeitung, a radical newspaper in Cologne, and began to work out the theory of the materialist conception of history. He moved to Paris in 1843, where he began writing for other radical newspapers and met Friedrich Engels, who would become his lifelong friend and collaborator.
Marx's theories about society, economics and politics—the collective understanding of which is known as Marxism—hold that human societies progress through class struggle: a conflict between an ownership class that controls production and a dispossessed labouring class that provides the labour for production. States, Marx believed, were run on behalf of the ruling class and in their interest while representing it as the common interest of all; and he predicted that, like previous socioeconomic systems, capitalism produced internal tensions which would lead to its self-destruction and replacement by a new system: socialism. He argued that class antagonisms under capitalism between the bourgeoisie and proletariat would eventuate in the working class' conquest of political power and eventually establish a classless society, communism, a society governed by a free association of producers. Marx actively fought for its implementation, arguing that the working class should carry out organized revolutionary action to topple capitalism and bring about socio-economic change.
||Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged.
||— Adam Smith (1723 – 1790)
The Wealth of Nations , 1776
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