Final answer:
The system is capitalism, which involves private ownership of production within a regulated environment to safeguard civil liberties and ensure governance. Unlike socialism, which features state ownership for wealth distribution, capitalism allows for private goods and individual economic freedoms under the rule of law and protection of property rights.
Step-by-step explanation:
The economic system described is capitalism, specifically a version of capitalism moderated by government regulations. In this system, private citizens own the means of production and aim to generate profits. However, this pursuit of profit occurs within regulatory boundaries established to protect civil liberties, promote social welfare, and ensure that the government can collect taxes.
Capitalism supports the concept of private goods and allows for individual choices and freedoms within the marketplace. Nonetheless, it recognizes that wealth and income will not be distributed equally across the entire population. Government's role in a capitalist society includes the enactment and enforcement of laws that secure individual property rights, provide for public goods, and maintain a system of courts for legal disputes. The government is also responsible for preventing physical coercion, protecting citizens, and enabling a marketplace that is open to competition and representative democracy.
Capitalism contrasts with socialism, where the means of generating wealth are owned by the state and wealth is redistributed through social programs. In socialism, the government often controls crucial economic sectors and utilities, and the economic system tends toward collective ownership and egalitarian distribution of resources.