What economic system is characterized by private ownership and free markets?

The economic system characterized by private ownership and free markets is capitalism. In capitalism, individuals and businesses own the resources and means of production, and they are free to operate them for profit. This system encourages competition and innovation, driving economic growth and efficiency. Prices in a capitalist economy are often determined by supply and demand, allowing for flexibility and responsiveness to consumer needs.

In contrast to capitalism, socialism and communism involve some degree of collective or government control over production and resources, reducing the level of private ownership and market freedom. Feudalism, on the other hand, is a historical system where land ownership was tied to social hierarchy and loyalty, rather than a market-driven economy. Thus, capitalism is clearly defined by its fundamental principles of individual ownership and market-driven exchanges.