I think a lot of this comes from the fact that most people donât know the formal definition of capitalism. We all know the word, weâve all seen the jokes, but very few people bother to actually define it unless theyâre talking about political theory and philosophy, so itâs easy to end up with the impression that Capitalism = Money Can Be Exchanged For Goods And Services.
Capitalism is the economic system where most of the means of production (i.e. everything people need to have to make the stuff that everyone wants) are owned by private individuals or corporations, who then hire people to provide the labor necessary to produce things, with the intent of selling the output at a profit. Itâs the difference between âyouâre a carpenter and you make a chair and you sell itâ and âyouâre Richard Q. Richington who owns a chair factory, and you pay people to sell the chairs you paid other people to make and then all the excess money goes back to you.â There have been Richard Q. Richingtons on and off throughout history, but that being the norm for every single industry is a pretty recent development.