Capitalism is the economic system in which the means of production are owned by private persons, and operated for profit and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a free market, rather than by central economic planning. Capitalism is usually considered to involve the right of individuals and corporations to trade, incorporate, employ workers, and use money provided by central banks, in goods, services (including finance), labor and land.Bacher, Christian. Capitalism, Ethics and the Paradox of Self-exploitation. Grin Verlag. 2007. p. 2 In theory, production and distribution in a capitalist system are governed by the free market rather than state regulation, with state action confined to defining and enforcing the basic rules of the market though the state may provide a few basic public goods and infrastructure. Unrestrained capitalism is confined to theory, as "all of the capitalistic societies of the West have mixed economies" with interventionist state regulation, social programs and state ownership of some sectors.

Capitalist economic practices became institutionalized in England between the 16th and 19th centuries, although some features of capitalist organization existed in the ancient world, and early forms of merchant capitalism flourished during the Middle Ages. Capitalism has been dominant in the Western world since the end of feudalism. From Britain it gradually spread throughout Europe, across political and cultural frontiers. In the 19th and 20th centuries, capitalism provided the main, but not exclusive, means of industrialization throughout much of the world.

The concept of capitalism has limited analytic value, given the great variety of historical cases over which it is applied, varying in time, geography, politics and culture, and some feel that the term "mixed economies" more precisely describes most contemporary economies. Some economists have specified a variety of different types of capitalism, depending on specifics of concentration of economic power and wealth, and methods of capital accumulation. The capitalist mixed economy is the main capitalist system, where the state intervenes in market activity and provides some services. Other systems include laissez-faire, where the state plays a minimal role and anarcho-capitalism where the market and private enterprise are completely free from the state which is nonexistent. During the last century capitalism has been contrasted with centrally planned economies, such as Marxian economies.

The concept of capitalism has evolved over time, with later thinkers often building on the analysis of earlier thinkers. Moreover, the component concepts used in defining capitalism — such as private ownership, markets and investment — have evolved along with changes in theory, in law, and in practice.