Capitalism is an economic system characterized by private ownership of the means of production, especially in the industrial sector, in which labor is paid only according to wages.
Capitalism depends on respect for private property rights, which provide incentives for investment and the productive use of productive capital.
Capitalism has historically developed out of the former systems of feudalism and mercantilism in Europe and has dramatically expanded industrialization and widespread availability of consumer goods for the mass market.
Pure capitalism can be contrasted with pure socialism (where all means of production are collectively or state-owned) and a mixed economy (which is on a continuum between pure capitalism and pure socialism).
The actual practice of capitalism usually involves some degree of so-called “clan capitalism” due to business demands for favorable government intervention and government incentives to intervene in the economy.
The term “discount rate” can refer to either the interest rate the Federal Reserve charges banks for short-term loans or the rate used to discount future cash flows in a discounted cash flow (DCF) analysis.