Capitalism is in most aspects a refined form of all economic systems in history. While, many socialists see it as barbaric and competitive, capitalism represents the basic system nearly all countries practice on a national level. The difference between capitalism and socialism is the level on which they choose to practice capitalism. The United States practices capitalism on an individual level more so than say Great Britain and much more so than a true socialist republic.
What do I mean by different levels? Well, it is important to understand the basic concepts of capitalism. First an entity produces a product. Next, it puts that product on the market for sale. Finally, a buyer purchases the product at hopefully a profit to the producer. This is the essential premise behind capitalism. The profit motive pushes people to create something in order to exchange it for a gain. Now, if one entity has a similar product but he can sell it at a much lower cost, then the consumer wishes to purchase the item that costs less.
In this way, markets drive down the cost of goods.
In the previous example, if the entity is a nation it is called socialism or communism or even a form of autocracy. The nation produces something in order for it to be bought by another nation or buyer. If the entity is an individual or a corporation, such an economic system is called capitalism. This occurs in every country on the world and will continue unless there is a creation of a massive super state in which self-sufficient economy is possible. This however, is unlikely.
This type of production, sale, and profit, has been going on since man lived in society. The economic systems differ in how the goods are produced and traded. In this...