• In preindustrial societies, land was virtually all wealth.
• In the industrial society, people need investment.
• Thus, bankers, industrialists, and those who have moneybecame the most powerful economic source.
• Capitalism is an economic system in which the means of production are held largely in private hands.
• Its main incentive for economic activity is the accumulation of profits. 2
• In 18thcentury, the main principle of capitalism was laissez-faire(= let them do) promoted by Adam Smith.
• Under the principle, people could compete freely, withminimal government intervention in the economy.
• Today, the form of capitalism has changed a little.
• Even today, private ownership and maximization of profits are the most important characteristics of capitalism.
• But different from laissez-faire, government regulationis often found in economic activities in order to protect consumers, workers, and company’s investors etc.