The term ‘capitalism’ which is in wide currency is quite hard to define because different scholars have assigned different meanings to it. Some scholars like Tawney hold capitalism is “no more than a political catchword”. Cromwell and Czerwonky define capitalism as “an economy of free and fair competition for profit and continuous work opportunity for all.”
They identify capitalism with the system of ‘free enterprise’ in which the individual has unfettered economic freedom; a system where economic and social regulations are ruled by contract, where men and free agents in seeking their livelihood and legal compulsions and restrictions are observed. Max Weber says capitalism is “present wherever the industrial provisions for the needs of a human group is carried out by the method of enterprise”.
He asserts that the spirit underlying capitalism is the attitude to “seek profit rationally and systematically”. Hamilton describes capitalism as a “system in which wealth other than land, is used for the definite purpose of securing an income.” According to Lipson, “The fundamental feature of capitalism is the wage-system under which the worker has no right of ownership in the wares he manufactures: he sells not the fruits of his labour but the labour itself-a distinction of vital economic significance.” Almost similar views are expressed by Cunningham.
He says, “The distinguishing feature of capitalist organization of industry is the possession of material by the employer, who engages the workman and pays his wages; he subsequently makes a profit by the sale of the goods.” He further says, “The intrusion of capital may not make much apparent change in the conditions under which the work is done but it makes a tremendous change in the personal relations of the workman to his fellowmen when he is reduced to a position of dependence.”
In simple words capitalism is an economic arrangement where production and distribution of goods is carried on by the individuals or group of individuals, who use their stock of accumulated wealth for making more wealth for themselves.