Capitalism

Cosimo de' Medici, who managed to build an international financial empire and was one of the first Medici bankers

A painting of a French seaport from 1638 at the height of mercantilism

Robert Clive with the Nawabs of Bengal after the Battle of Plassey which began the British rule in India

The Watt steam engine, a steam engine fuelled primarily by coal propelled the Industrial Revolution in Great Britain

The gold standard formed the financial basis of the international economy from 1870 to 1914.

The New York stock exchange traders' floor (1963)

Many analysts assert that China is one of the main examples of state capitalism in the 21st century.

The economic model of supply and demand states that the price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D): the diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.

The subscription room at Lloyd's of London in the early 19th century

An industrial worker among heavy steel machine parts (Kinex Bearings, Bytča, Slovakia, c. 1995–2000)

The Industrial Workers of the World poster "Pyramid of Capitalist System" (1911)

Economic system based on the private ownership of the means of production and their operation for profit.

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Laissez-faire

Economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups.

Common typology for economic systems categorized by resource ownership and resource allocation mechanism

Although never practiced with full consistency, laissez-faire capitalism emerged in the mid-18th century and was further popularized by Adam Smith's book The Wealth of Nations.

Economic system in which the state undertakes business and commercial economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital accumulation, centralized management and wage labor).

Friedrich Engels, who argued that state ownership does not do away with capitalism by itself

Murray Rothbard, who advanced a right-libertarian analysis of state capitalism

Ludwig von Mises, who described state capitalism as a form of state socialism

Benito Mussolini, who claimed that the modern phase of capitalism is state socialism "turned on its head"

Marxist literature defines state capitalism as a social system combining capitalism with ownership or control by a state.

Free market

System in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market without market coercions.

A diagram showing the "effects of price freedom"

Although free markets are commonly associated with capitalism in contemporary usage and popular culture, free markets have also been components in some forms of market socialism.

Mixed economy

Variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise.

Another is that of active collaboration of capitalist and socialist visions.

Economic interventionism

Economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare of the people.

Typical intervention strategies under different conditions

Red tape binds 19th century documents, the origin of phrase "red tape" to criticize economic interventionist laws and regulations

Capitalist market economies that feature high degrees of state intervention are often referred to as a type of mixed economy.

State ownership

Ownership of an industry, asset, or enterprise by the state or a public body representing a community, as opposed to an individual or private party.

A plaque marking state property in Riga, Latvia

A plaque marking state property in Jūrmala

A state-owned enterprise is a commercial enterprise owned by a government entity in a capitalist market or mixed economy.

Economic planning

Resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution.

The supply and demand model describes how prices vary as a result of a balance between product availability and demand. The graph depicts an increase (that is, right-shift) in demand from D1 to D2 along with the consequent increase in price and quantity required to reach a new equilibrium point on the supply curve (S).

A distinction can be made between physical planning (as in pure socialism) and financial planning (as practiced by governments and private firms in capitalism).

Industrial Revolution

The transition to new manufacturing processes in Great Britain, continental Europe, and the United States, in the period from about 1760 to sometime between 1820 and 1840.

A Roberts loom in a weaving shed in 1835.

Handloom weaving in 1747, from William Hogarth's Industry and Idleness

European colonial empires at the start of the Industrial Revolution, superimposed upon modern political boundaries.

A model of the spinning jenny in a museum in Wuppertal. Invented by James Hargreaves in 1764, the spinning jenny was one of the innovations that started the revolution.

The only surviving example of a spinning mule built by the inventor Samuel Crompton. The mule produced high-quality thread with minimal labour. Bolton Museum, Greater Manchester

The interior of Marshall's Temple Works in Leeds, West Yorkshire

Lombe's Mill site today, rebuilt as Derby Silk Mill

The reverberatory furnace could produce cast iron using mined coal. The burning coal remained separate from the iron and so did not contaminate the iron with impurities like sulfur and silica. This opened the way to increased iron production.

The Iron Bridge, Shropshire, England, the world's first bridge constructed of iron opened in 1781.

Horizontal (lower) and vertical (upper) cross-sections of a single puddling furnace. A. Fireplace grate; B. Firebricks; C. Cross binders; D. Fireplace; E. Work door; F. Hearth; G. Cast iron retaining plates; H. Bridge wall

A Watt steam engine. James Watt transformed the steam engine from a reciprocating motion that was used for pumping to a rotating motion suited to industrial applications. Watt and others significantly improved the efficiency of the steam engine.

Newcomen's steam-powered atmospheric engine was the first practical piston steam engine. Subsequent steam engines were to power the Industrial Revolution.

Maudslay's famous early screw-cutting lathes of circa 1797 and 1800

The Middletown milling machine of c. 1818, associated with Robert Johnson and Simeon North

The Thames Tunnel (opened 1843).
Cement was used in the world's first underwater tunnel.

The Crystal Palace housed the Great Exhibition of 1851

The Bridgewater Canal, famous because of its commercial success, crossing the Manchester Ship Canal, one of the last canals to be built.

Construction of the first macadam road in the United States (1823). In the foreground, workers are breaking stones "so as not to exceed 6 ounces in weight or to pass a two-inch ring".

Painting depicting the opening of the Liverpool and Manchester Railway in 1830, the first inter-city railway in the world and which spawned Railway Mania due to its success.

Winchester High Street, 1853. The number of High Streets (the primary street for retail in Britain) in towns and cities rapidly grew in the 18th century.

The Black Country in England, west of Birmingham

Manchester, England ("Cottonopolis"), pictured in 1840, showing the mass of factory chimneys

A young "drawer" pulling a coal tub along a mine gallery. In Britain, laws passed in 1842 and 1844 improved mine working conditions.

Levels of air pollution rose during the Industrial Revolution, sparking the first modern environmental laws to be passed in the mid-19th century.

Slater's Mill in Pawtucket, Rhode Island.

Sächsische Maschinenfabrik in Chemnitz, Germany, 1868

Sir Henry Bessemer's Bessemer converter, the most important technique for making steel from the 1850s to the 1950s. Located in Sheffield (Steel City)

Regional GDP per capita changed very little for most of human history before the Industrial Revolution.

Interior of the London Coal Exchange, c. 1808.
European 17th-century colonial expansion, international trade, and creation of financial markets produced a new legal and financial environment, one which supported and enabled 18th-century industrial growth.

As the Industrial Revolution developed British manufactured output surged ahead of other economies.

William Bell Scott Iron and Coal, 1855–60

William and Mary Presenting the Cap of Liberty to Europe, 1716, Sir James Thornhill. Enthroned in heaven with the Virtues behind them are the royals William III and Mary II who had taken the throne after the Glorious Revolution and signed the English Bill of Rights of 1689. William tramples on arbitrary power and hands the red cap of liberty to Europe where, unlike Britain, absolute monarchy stayed the normal form of power execution. Below William is the French king Louis XIV.

A Philosopher Lecturing on the Orrery by Joseph Wright of Derby (c. 1766). Informal philosophical societies spread scientific advances

A primitive lifestyle living outside the Industrial Revolution

A dog forced to eat trash due to pollution, the Industrial Revolution has forced animals into harsh environments most are unable to survive in, leading to starvation and eventual extinction

GDP per capita was broadly stable before the Industrial Revolution and the emergence of the modern capitalist economy, while the Industrial Revolution began an era of per-capita economic growth in capitalist economies.

Private property

Legal designation for the ownership of property by non-governmental legal entities.

Proprietas Privata (PP) British period marker in San Martin, St. Paul's Bay, Malta

Factories and corporations are considered private property.

Private property is foundational to capitalism, an economic system based on the private ownership of the means of production.

Political economy

Study of how economic and political systems are linked.

Jean-Jacques Rousseau, Discours sur l'oeconomie politique, 1758

Robert Keohane, international relations theorist

Susan Strange, international relations scholar

Political economy most commonly refers to interdisciplinary studies drawing upon economics, sociology and political science in explaining how political institutions, the political environment, and the economic system—capitalist, socialist, communist, or mixed—influence each other.