Capitalism is defined as a free market system built on private ownership;The idea that owners of capital have property rights that entitle them to earn a profit as a reward for putting their capital at risk in some form of economic activity.

Antonym: Communism

Unlike earlier systems, capitalism used the excess of production over consumption to enlarge productive capacity rather than investing it in economically unproductive enterprises such as palaces or cathedrals. The strong national states of the mercantilism era provided the social conditions, such as uniform monetary systems and legal codes, necessary for the rise of capitalism.
ba_jet_h250.jpg
Here is a privately owned airplane. It relates to capitalism because this concept means private ownership of property exists.

Basics:

  1. private ownership of property exists
  2. aggregates of property or capital provide income for the individuals or firms that accumulated it and own it
  3. individuals and firms are relatively free to compete with others for their own economic gain.
  4. the profit motive is basic to economic life[1]

Summary:

Capitalism is when the individual or business who owns the property can use it however they want, and earn their own profits from their own resources.
  1. ^ http://www.answers.com/topic/capitalism