What is Capitalism?
Capitalism is an economic system, where the government takes a back seat role, and people or companies compete with each other in a free market world to offer the best prices for their goods and services.
Why Is Capitalism Important
1) Equality – No matter your social background, everyone gets the opportunity to compete and make it big. The basic principle is the harder you work, the greater is your reward.
2) Freedom – Most of the people reading this article would have gone through a decent education system where one had a variety of subjects to study, then choosing your favourite subject to specialise at college and then applying for a job you choose from a wide gamut of options. This is classic capitalism, freedom to do and choose what you want.
3) Innovation – People and companies are at every moment seeking to create and develop new profitable products by the way of Research & Development which leads to new breakthroughs leading to innovation.
4) Efficiency – Firms in a capitalist-based society face incentives to be efficient and produce goods which are in demand. These incentives create the pressures to cut costs and avoid waste. State-owned firms often tend to be more inefficient (e.g. less willing to get rid of surplus workers and fewer incentives to try new innovative working practices.)
All the above-mentioned reasons lead to making a country more wealthy.
Reliance Jio a classic example of capitalism done right. Everyone reading this must have heard about Jio and the competition it poses to rival companies. Pre-Jio era, it was a luxury to access the internet via mobile phones as data packs were expensive. Now due to healthy competition, data and voice charges have gone down drastically and people are enjoying the end benefit. This shows how the free market and competition triumph as the basic pillars of capitalism. Never in the history of India, any government telecom company was able to create such a revolution.
India is still a developing economy, having elements of both socialism and capitalism. In the present situation where the youth population is rising exponentially, it won’t be possible for the government to provide jobs for everyone, a majority of the jobs presently and in the future will be coming from the private sector, which is a result of a free market economy.
Capitalism if practised within the laws can be a boon for any country, the examples being the giant rise of the US and China.