An economic system and mode of production based on the principles of private ownership of the means of production, individual initiative, free competition, division of labor and allocation of resources through the market mechanism without the need for central intervention from the state. The capitalist economic system believes in material profit, motivating individuals to take initiative, take risks and invest capital to earn more profits and multiply wealth.
The rise of capitalism was associated with the movement of geographical discoveries in the sixteenth century, which opened up new trade routes for European merchants.