Capitalism is a difficult phrase that is more than just a set of social and economic practices. It is rather, a way of thinking that is fundamentally individualistic, meaning that the individual is the center of capitalist endeavor.
Basically, capitalism is a situation in which the power lies in the few hands of people who have accumulated the capital. Capital here means land, materials, tools, profits as well as money, which are also the means of production and distribution in a market. The property-owners of these means of production are called “capitalists”. They believe that the market is powerful enough to function without any interference. The role of the State is simply to regulate and protect.
This economic system called capitalism is defined by a few characteristics like: means of production and distribution are privately owned, individuals and companies internally compete for profits, free market forces determine the prices, and all decisions are taken by the private players of the market rather than the central planning by the Government. However, a debate goes on as a group of people define capitalism as an economy where all the resources are privately owned while another group loosely says most of them are in private hands.
Economists generally emphasize that capitalism is a state wherein the Government has no control over the market (called Laissez Faire) and on the property rights. The market is controlled by the competition and the demand and supply ratios. Also, there is a basic agreement that capitalism encourages Economic Growth, Political Freedom and Self Organization and is a Morally Imperative system.
However, criticisms are bound to be present as the other side of the coin. Critics argue that capitalism is unfair distribution of wealth that leads to monopoly, exploitation, inequality, unemployment and economic instability.
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Aditi Rindani 