Capitalism is an ideology where the means of production is controlled by private business. This means that individual citizens run the economy without government interfering in production or pricing. Instead, pricing are set by the free market. This means that value is based on supply and demand and the relationship between producers and consumers.
This ideology is very different from socialism and communism, whereas the government takes control of the economy. The United States is one of the countries that has a capitalist economy, which many citizens see as an important part of democracy and building the “American Dream.” However, despite being one of the most well-known capitalist countries, the United States is not even in the top 10 list of most capitalistic countries, according to reports from The Heritage Foundation and Global Finance Magazine.
There are benefits and drawbacks to a capitalist economy. As far as the positive aspects, capitalism often drives the best products at the best prices. With capitalism, economic growth and innovation are also benefits. As far as drawbacks, capitalism has a few. One of the biggest drawbacks is that it does not provide for anyone that does not have skills. It also does not promote equality of opportunity. In short, some people may not get the opportunities that others receive.
According to the 2017 Economic Freedom of the World Index, the top 50 capitalist countries (ranked from highest score to lowest):
- Hong Kong
- New Zealand
- United Kingdom
- United Arab Emirates
Is America capitalist? The United States is referred to as a “mixed economy,” meaning that it has characteristics of both capitalism and socialism. The United States is a capitalist society where means of production are based on private ownership and operation for profit. The United States is not a totally capitalist society, however, because the economy has regulations, taxation, and some subsidization. The US government has always had some role in the economy, but some periods of time the economy was closer to a true free market. The government has at least some partial control over education, roads, health care, and postal deliveries, as well as provides subsidies to oil companies, financial companies, and agricultural producers. Additionally, private businesses are required to register with government agencies and certain types of businesses need government-approved licenses.
Is Russia capitalist? Some state that Russia is a state capitalist society and others state that Russia is a “mixed market” economy. State capitalism is an economic system in which the state undertakes for-profit economic activity and the means of production are state-owned enterprises. Approximately 55% of the economy is controlled by the state in Russia and 20 million workers are directly employed by the government (28% of the workforce). Additionally, the existence of oligarchs in Russia makes the country non-capitalist.
Is Japan capitalist? Japan is a capitalist country in the form of collective capitalism. In Japan’s collective capitalist system, workers are usually compensated with job security, pensions, and social protection by their employers in return for loyalty and hard work. Collective capitalism focuses on long-term relationships, such as companies owning shares in other companies, resulting in cooperation between companies since they have an interest in each other’s performances.
No country in the world has ever achieved a totally capitalist, “laissez-faire,” or free-market economy. Mostly all capitalist economies are mixed.