What is Capitalism?

What is Capitalism?

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In this series, Asaljeplak will give a brief explanation of what Capitalism is, the history of Capitalism, the characteristics of Capitalism, and the reason why many consider Capitalism to be "evil".

Capitalism is the astonishing notion that the most wicked will do the most evil for the good of all.

– John Maynard Keynes

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Capitalism is the astounding belief that the most wickedest of the things for the greatest good of everyone.

Confused by the statement of John Maynard Keynes Economist above?

What exactly is meant by capitalism?

What is Capitalism?

Basically, Capitalism is an economic system based on private ownership of the means of production and operation (capital) used for profit.

If applied into a country, it becomes an economic and political system in which the trade and industry of a country is controlled by private owners alias individuals, for profit, and not controlled by the state.

The picture is like this, if you live in a country that implements the economic system of Capitalism, then you can open your own business and have the tools necessary for your business, such as machinery, raw materials, human resources, then you use to produce a product or service, and sell the product or service to other communities in order to gain profit, without any interference or intervention from the government.

So, conceptually, Capitalism is an economic system that can be used by an individual to reap the profits as much as possible by selling products or services to people who need these products or services.

The History of Capitalism

Where is Capitalism from? Who first gave the term "Capitalism" to the economic system?

The term Capitalism was popularized by Karl Marx in the 19th century. Karl Marx himself is one of the most anti-economic systems and more supportive to the idea that everyone has the right to have equal access to the means of production and operation.

However, the basic principle of Capitalism has existed long before the term of Capitalism became popular, which was first coined by Adam Smith, a Scottish economist and philosopher, in his book entitled "An Inquiry into the Nature and Causes of the Wealth of Nations "In 1776.

In the book, Adam Smith more or less argues that the freedom of an individual in the production of every production and operational asset that they possess without intervention, to benefit themselves, will have an impact on the improvement of the economy as a whole.

Characteristics of Capitalism

In its development, the economic system of Capitalism which is also often referred to as the free market economic system (Free Market), continues to adapt with the development of the era, until finally it can be summed up into the following characteristics:

  • Production and Operational Assets of a business are privately owned
  • Economy "regulated" by Seller and Buyer
  • Every individual business owner has an orientation towards Profit
  • Government intervention still exists, but minimized, this in order to avoid business owners acting arbitrarily such as providing unreasonable working hours or providing unbalanced incentives to employed human resources.
  • The Economic System of Capitalism requires a competitive market in order to avoid the occurrence of Monopoly.
  • Sellers and Buyers have the right to spend their money anywhere.
  • Why is Capitalism labeled "Evil"?

    As Asaljeplak explains, the basic concept of Capitalism itself is actually focused on the extent to which an individual will seek to produce goods or services useful to the general public.

    Unfortunately, because there is also the concept of "reaching profit maximally" is, many business owners who finally apply practices that justify all means, especially in their treatment of human resources employed.

    Because indirectly, capitalism divides the society into two groups, ie, business owners who have production and operational assets to produce goods or services, and workers who do not have access to these assets.

    And in fact, the proportion between business owners (employers) and workers is very unbalanced, where the number of those who become entrepreneurs is less than those who enter into the working class.

    This if there is no government intervention in the form of proper regulation and can create a balance between the two groups will certainly lead to market conditions that are very unhealthy between groups and also fellow individuals in the group, which seems to be the case in fact.

    In conclusion, the economic system of Capitalism would appear "evil" if those belonging to the entrepreneurs are allowed to act arbitrarily without thinking of the humanitarian impact, especially on those employed, as well as the impact on other fellow businesspeople.

    Therefore, governments who do not want to interfere with the business activities of their people should be able to implement regulations that protect the rights of those of the working class, as well as ensuring healthy competition among those of the entrepreneurs.

    Well, there are few explanations of what Capitalism is, a brief history, characteristics, and reasons why many say Capitalism is "evil".

    Hopefully this article can provide useful information yes, do not forget to Like, Share, and Subscribe to channel Youtube Asaljeplak yes.



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