What is capitalism ? How money makes money ?- Smartime

What is capitalism exactly?

Creative Creation
3 min readMar 23, 2021

How successful was it ? Or did it fail?

The word ‘ Capitalism’ comes from the word capital which means money. Or any type of wealth.


Whether you have houses , cars on land, they are your capital.

Capitalism is a society where From each according to his ability,To each according to his capital.

A society where every person works according to his ability. But they get return according to capital.

The person with the most capital will get the most profit.

READ MORE : What is Inflation ? - Easy explanation - How to protect against inflation ?

After knowing the definition you’d ask me “ what kind of a society is this ? Where a perywho has more money will get more money”

Yes you heard right.

Basically capitalism is an ideology that promotes privatisation. Where the means of production like lands, fields, factories, and industries. Are owned by private individuals.

Let’s talk about the history of capitalism.

The oldest example of capitalism is feudalism. This can be called the primitive form of capitalism.

This was around the 10th century when landlords occupied land, and the farmers and labourers who worked on the land, worked tirelessly to grow crops but all the profits from the lands, was taken by the landlords.

And the farmers hardly earned enough to get by. You may wonder how this is an example of capitalism.

The land was owned by an individual, the landlord. And to whom did most of the prof from the land go? The landlord.

Capitalism works similarly today. Whatever you do at whichever company.

How does money make money ?

Suppose you’re an employee at Apple. You work the whole day and get a monthly salary in return.

But company earns profits where does the profits go ?

It doesn’t go to you. It hoeyto the owner of the company.

Obviously, there are differences. Today you get workers, rights. and minimum wages and are not exploited, in most of the cases. Who is owner of Apple company ? That person who holds the most numbers if shares of the company.

Even you can become the owner of the company through the Share market.

If you buy some shares apple, any profits earned by it, you will get a part of. Because you are also an owner of a portion. We live in such a capitalist society today.

A employee works in a company for a monthly salary. And the profit earned by the company will be distributed among such people.

Who don’t even know the day to day working of the company.

You can earn the profit if the company by doing nothing if you invest in the company.

And who can invest? Someone who already has the money.

As I said, money makes money. One with the most money in a capitalist world can make more money easily.

By investing in such companies and taking their profits. Modern capitalism started in the 16th — 17th century I. Britain and Netherlands. The first stock exchange of the world was the Amsterdam stock exchange.

And the first company to be listed was the Dutch East India company in 1602.

If you Understand and like then make sure to share this with your friends and family

Reference of this article : Dhruv Rathee

Originally published at https://www.smartime.xyz.



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