Simple explanation:
Capitalism is an economic system where businesses, land and other resources are mainly owned by private individuals or companies rather than the government. Owners can invest in them, decide what to produce or sell, and aim to make a profit. People are generally free to start businesses, choose where to spend their money, and compete for customers.
Example:
Someone uses their own money—or borrows it—to open a bakery. They own and run the business, decide what to bake and how much to charge, and keep any profit after paying their costs. If customers prefer another bakery, they can choose to go there instead.
A bit more information
The United States and the United Kingdom are examples of countries with mostly capitalist economies. Both have privately owned businesses, alongside government services, regulations and public spending.
Countries such as China and Vietnam have communist parties in government, but their economies also include private businesses and markets. So they don’t fit neatly into a simple “capitalist or not” list.
