Capitalism is generally considered by scholars to be an economic system that includes private ownership of the means of production, creation of goods or services for profit or income, the accumulation of capital, competitive markets, voluntary exchange, and wage labor. The designation is applied to a variety of historical cases, which vary in time, geography, politics, and culture.
Economists, political economists and historians have taken different perspectives on the analysis of capitalism. Economists usually focus on the degree that government does not have control over markets (laissez-faire economics), and on property rights. Most political economists emphasize private property, power relations, wage labor, class and capitalism's as a unique historical formation. Capitalism is generally viewed as encouraging economic growth. The differing extents to which different markets are free, as well as the rules defining private property, are a matter of politics and policy, and many states have what are termed mixed economies. A number of political ideologies have emerged in support of various types of capitalism, the most prominent being economic liberalism.
The relationship between the state, its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century. Hernando de Soto is a contemporary economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in a formal property system where ownership and transactions are clearly recorded.
The relationship between democracy and capitalism is a contentious area in theory and popular political movements. The extension of universal adult male suffrage in 19th century Britain occurred along with the development of industrial capitalism, and democracy became widespread at the same time as capitalism, leading many theorists to posit a causal relationship between them—claiming each affects the other. However, in the 20th century, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including fascist regimes, absolute monarchies, and single-party states.