What economic system is based on private property and free market principles?

The economic system characterized by private property and free market principles is capitalism. In capitalism, individuals and businesses own the means of production, and economic decisions are guided by free market forces such as supply and demand. This structure allows for competition and innovation, as individuals have the freedom to pursue their own economic interests, leading to a variety of goods and services in the marketplace.

Under capitalism, prices are determined through competition and consumer preferences, which helps in allocating resources efficiently. This system also encourages investment and consumer choice, ultimately contributing to economic growth.

In contrast, socialism and communism focus on collective ownership of resources and the means of production, which restricts the role of private property and market forces. Feudalism is a historical system based on land ownership and a hierarchical structure of obligations, rather than private ownership in a market economy. Therefore, capitalism is distinctly identified by its reliance on private property and free market principles.