You must have heard word,” Capitalism quite much often in newspapers and magazines while reading news about different economies, but we never bother to research for a single word’s meaning and look to seek for the meaning of it while reading the full paragraph, but it just gives you half an idea about a certain thing and thus here we are trying to explain the meaning of capitalism for you to make you understand it better.
What is Capitalism – Define Capitalism
Definition of Capitalism:-
You can take capitalism as a social system that is prevailing in almost all the countries of the contemporary world. In this system, the production and distribution of goods is controlled by a small minority of people. This goods may contain the factories, the land areas, the technological equipment, the means of transport, etc. and these minority people that influence this system are called as the capitalists.
Difference between the Capitalists and Working Class:-
The people who control the production and distribution of goods are said to be the capitalists, these people bring about the desired completion of the distribution related tasks as well as the production making the use of worker class by paying them for their skills. The worker class on the other hand sells their ability to complete work in the form of wages to these capitalists.
Production is done by the working class for these capitalists in return for wages and thus sold for a profit by these capitalists. The worker class are paid a minor amount les than the profit that these capitalists made on the production and thus the work class can be regarded as the laborers while the capitalists can be regarded as the business mans.
Advantages And Disadvantages of Capitalism:-
The major advantages that capitalism comes with is the freedom that it provides, the improvement in efficiency that has come with growth of capitalism and the economic growth that it provides whereas it is also associated with some disadvantages as it has been seen sometimes that capitalists don’t even pay the requisite amount enough for the task to the worker class and instead hire them up on cheap wages exploiting them. The monopoly of power proves to be the biggest disadvantage of capitalism and the inheritance and inequality of wealth that capitalism is associated with also proves to put it ant a disadvantage as well.
The Essence of Capitalism:-
The basic motive of this process is to purchase labor at minute costs, but sell the production made for higher sums as profits. The basic motive remains profit making rather than to provide employment or to satisfy people’s needs. The capitalists find the purchaser for their goods and then sell it on huge sums.
You can assume capitalism to be a free market economy and exploitation of the wage labor.