The economic system based on private ownership is called capitalism. In a capitalist economy, individuals and businesses own and control property and resources, unlike in systems where the government has significant control, such as socialism or communism. Capitalism encourages competition and free market principles, allowing supply and demand to dictate prices and production. This system promotes entrepreneurship and innovation, as individuals are incentivized to create goods and services that meet consumer needs. While capitalism has led to economic growth and efficiency in many regions, it can also result in income inequality and fluctuations in economic stability, leading to ongoing debates about its effectiveness and ethics.