The most important feature of capitalism is that it advocates for private property and freedom of ownership. Humans have a right to acquire private property and keep it for their benefit. With capitalism, you can invest in whatever field you wish and enjoy the interests that are earned from your assets. People are free to buy more assets and multiply their wealth to whatever extent they wish by investing in enterprises of their choice. After your death, your property remains protected as it goes to your heir. Capitalism advocates for wealth accumulation without any restrictions imposed on entrepreneurs. Private property ownership ensures that all assets that a person accumulates are only owned by their family members.
In a capitalism, the main motivation is to earn profits by investing extensively to accumulate more capital. Entrepreneurs are driven by an objective to make huge profits in a capitalist society. All entrepreneurs try to start industries or occupations in which they can earn the highest profits. You will only take high risks because you hope that you will make more funds. For capitalism, accumulating capital is the major motivation that will make people invest in different activities. An entrepreneur who gets the most profits becomes the most successful in capitalism. The more funds that a commodity brings, the more it motivates producers to manufacture it.
Capitalism is characterized by free competition where businesses compete to realize the highest sales. Businesses work tirelessly to win the hearts of their consumers so that they can have their products sell more than those of their competitors. Workers are required to work tirelessly and effectively so that a company can be more successful. Employees with specific skills also compete to secure their jobs as only those that maximize productivity are employed. To produce goods of the required type and quality, people are required to creatively work together for this to be achieved. Workers combine their distinct skills for a company to have its product as the best to buyers.
Consumers are the sovereign controllers of how production will be done and the products that will be available. As a consumer, your tastes will determine which goods will be manufactured. Companies depend on consumers tastes for them to start producing a certain product. This is because when particular goods fit the likes of consumers, the producer will get high profits. Buyers dictate which products will sell more and those that will become irrelevant to the market. Companies have to consult consumers before venturing into any type of business whatsoever.
Entrepreneurs are the foundation of a capitalist economy because they start businesses to produce commodities that humans need. Innovators come up with new ideas to solve problems that people might have. As an entrepreneur, you will play a huge role in ensuring that you constantly give the buyers everything that is needed. Capitalism cannot exist if no people are investing to make wealth by solving the inevitable customers’ needs. When there are good entrepreneurs, the competition stiffens, bringing the success of a capitalist economy.
A free market with minimal government intervention brings the success of a capitalist economy. When governments are given the authority to control the economy, there are several problems that will arise like corruption which will kill development. With capitalism, the market controls the economy by determining factors like pricing or deciding on which products should be sold. Governments are only allowed to intervene when a business is failing to help it gain its status on the market.
The price of a commodity is influenced by the number of suppliers and those that need the product. Prices freely fluctuate without any intervention from external organizations. You only choose to produce a product depending on the prices set on the market. When you have more traders supplying the same commodity as yours, you will have to lower your prices.
It requires that businesses be flexible to accommodate the new demands that the buyers might have. In a capitalist society companies are required to change products that they sell when their customers’ needs change. With time, customers’ needs change and suppliers are forced to change what they produce. Capitalism therefore, makes businesses to accommodate change so that they cannot collapse when they lose customers but rather, produce another product that the buyers need.