Capitalism is an economic system characterized by private ownership of the means of production, free market competition, and the pursuit of profit. In a capitalist system, individuals and businesses own and control the resources and assets needed for production, and decisions about what to produce, how to produce it, and for whom are made based on market forces. Capitalism encourages innovation, entrepreneurship, and individual initiative, but also has been criticized for creating inequality and exploitation. It is the dominant economic system in many countries around the world.