The economic system based on private ownership is called capitalism. This economic model is characterized by the private ownership of the means of production, such as factories, machinery, and land, as opposed to state ownership. In a capitalist system, individuals and companies are free to make their own economic decisions, including the production, distribution, and consumption of goods and services. Capitalism encourages competition and innovation, as businesses strive for profit by meeting consumer demands. While capitalism has shown to drive economic growth and development, it can also lead to inequalities, prompting discussions regarding regulation and social welfare policies.