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What is the meaning of Capitalism? Concept, Definition of Capitalism


Definition of capitalism


1 Meaning of capitalism

Capitalism is the economic system in which the capital becomes the main engine of the economy, being the money and property of production which sustain it in different countries and the world. He was born from the liberal economic ideas of the 18th century, which prompted the French Revolution, and who argued that the State should intervene little in the economy and that this should be based on the laws of supply and demand. In the middle ages prices were set by the guilds of craftsmen. At the end of the modern age with the development of manufacturing, product of the Industrial Revolution there will be no fixed prices but that increased supply and low demand, prices go down, and will rise, if there is high demand and low supply.
In the Industrial Revolution, which arose in England in 1750, and that then spread worldwide, the workers were savagely exploited by employers, who enriched themselves with the gain, while its employees were paid a miserable wage. In reality this was not the idea of capitalism, but they argued that it was well that there were rich, owners of capital, and poor wage earners, but the importance of wealth was that with that capital, the rich would generate jobs, would work to the workers, which in turn, could become rich thanks to their work, and become themselves in patterns. In practice this did not happen because salaries were so low, and there are no laws protecting the employment, so workers earned only the necessary for an unworthy survival.
As reaction to worker exploitation was communism, which stated that the most important in the production of wealth was not the capital contributed by employers, but the work of the workers, who had to take over the means of production, eliminating private property to establish a collective ownership of such property.
The difference with the system prior to the French Revolution, was that the old regime established estates hard, almost impossible to overcome. A person who was born in the State level hardly could access the nobility, which is entered by birth, or sometimes by marriage. The other State was the clergy, composed of ecclesiastics. In the new capitalist social order, social classes are mobile, can a rich impoverishment, and a poor acquire riches.
Currently, most of the countries in the world accept the capitalist system, admitting the existence of rich and poor within the States, and in an international system of rich and poor countries. The working conditions of the working class has been changed to the assure them through constitutional norms, and laws regulatory, decent work, holiday, special licenses, unionization, etc, although always in practice, the abuses of the rich towards the poor are reiterated, and it is difficult for the poor to move up the social ladder.

2. Definition of capitalism

Capitalism is a financial system in which the primary purpose is in the absorption of capital obtained by the production of an organization for their own purposes. In other words, capitalism benefits only to persons who have made some investment or some work related to the organization. History shows us capitalism coming in boats from Europe, but was not until the industrial revolution when at the peak of development, proposed the Foundation of this financial regime so that it is applied fully in society, this allowed certain stability between people who had properties, because they gave employment to anyone who wanted to work, but the misery of the marginal inhabitants gave it a face showing exclusion.
Capitalism seeks an interest in common, nowadays it remains viable in the field of marketing as competition is constant, however, policy an economic trend has become a way of life, from a point of view that characterizes the consolidation of an egalitarian community it could be argued that it is a doctrine that threatens middle-lower classes of society. Capitalism is the most direct way in which evolved feudalism, consolidation of the abolition of slavery. In capitalism the worker (already no more slave) receives a small portion in respect of work carried out.
In today's society, there are populations in marginal edges of the classes, which do not complete their livelihood with the offered by capitalism, so that today face new doctrines to follow in the community, such as socialism, a system that manages to include all classes of society that they arise and go forward with any project for the life quality of life. This means that capitalism is evil, dependence of this doctrine by the parties that make up the sense of creating a project with fundamentals "Private and individual" must be based on capitalism, since benefits should be for what is trying to build.

3 Concept of capitalism

Capitalism is the expression of the economic liberalism and born with the Industrial Revolution and is a mode especially economic organization, but also of influence in political and social life. One of the authors who has analyzed this topic is Karl Marx, renowned economist, in his work "The capital".
Capitalism produces merchandise for profit and this is an essential feature, because the economic benefit takes on a predominant value in society. In addition, the means of production are private; they belong to entrepreneurs, who bought the workforce of workers, so give them a salary. Then, a third characteristic of capitalism is wage labour.
In this political, economic and social system, occurs a surplus production, which grants an economic benefit to the employer.
The sociology in the beginning focused on the explanation of the capitalist system, in order to create a new order (in front of the social crisis, the struggle between rich and poor, generated by capitalism), stable as that of the age average, but on a different basis, would not the element of social cohesion religion, but science, understood as rational and positive (linked to the natural sciences). Science would be in the hands of the industry (according to the first sociologists or so-called "fathers of sociology": Saint-Simon and Comte), this is also linked to the progress.
Another feature of capitalism is the law of supply and demand which regulates the price of the commodity. If demand is greater than supply, prices go up, and if it happens the other way round down. At the same time there competition among businesses, to sell the same product, which also helps to regulate prices, as if a product was provided by an only entrepreneur, the price would be too high.


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