What do you understand by capitalism? Explain.

Capitalism is an economic system characterized by private ownership of the means of production, where individuals and businesses operate for profit in a competitive market. In a capitalist system, the allocation of resources, production, and distribution of goods and services are largely determined by market forces and the pursuit of individual self-interest.

Key features of capitalism include private property rights, free markets, and the profit motive. Private individuals or corporations own the factors of production, such as land, labor, and capital, and decisions about what to produce and how to distribute goods and services are made through voluntary transactions in the marketplace.

Capitalism has been associated with innovation, economic growth, and efficiency, but critics argue that it can also lead to income inequality and social disparities. The balance between government intervention and free-market dynamics varies across different capitalist systems, with some advocating for more regulation to address social and economic challenges, while others emphasize minimal government interference to maintain individual freedom and economic flexibility.