Thread by @FinFloww

Capitalism explained in a thread 🧵

with memes ofcourse🤪

What drives our day to day actions, why do we do what we do is very important to understand before we start investing to make better investment decisions.

Ultimately the companies you're investing in are selling to other humans. So, it's important to understand humans.

We are in a world where capitalism is the economic and life system which prevails.

At it's core capitalism is about:

Basically 😂 Capitalism is about self-interest. What drives us is our interest.

Look around you all these people running to work, getting in lines to get into a metro, waking up to attend that 9:00 AM lecture, what is the driving force? Why are they doing what they are doing?

It's all capitalism.

Not everybody is like Shyam

Everyone isn't after money, but they are after their self-interest.

People who are against capitalism imagine rich people like this:

If somebody doesn't create resources, there are limited resources in this world.

And if everybody just depends on others to provide them with resources like the govt through subsidies, or allowances, they are not going to work.

If you ask them to work they'll be like:

So, who created all of this? Who created this force that drives us?

It was Adam Smith, the father of Capitalism.

He must be like😂:

But actually he's not. People against capitalism think of it as a bad system because it leads to so many problems.

But in reality it's both. It's the only way to make people work for themselves.

And the best part about people working for themselves is that they are in turn helping everyone through it.

Let's explain this with an example:

Suppose a couple has made enough in their life and move to a farm. They won't employ more than 2-3 people in their whole life after that.

Now imagine them being driven to create more wealth for themselves. They'll stay in the city, build a business, invest their own capital into it and employ a 100 people.

Giving them employment.

Now in their effort to create wealth for themselves, they created wealth for 100 other people too, who might save, invest it and compound it to start their own thing in the future maybe, and build a bigger thing employing more.

This system compounds and becomes bigger.

The people with wealth will also buy a lot of stuff in turn benefitting other people with businesses who have employees to create wealth for them too.

Now all of this chain effect would not have formed if the couple would have moved to a farm. So much wealth for the society would not have been created.

This is why capitalism is so good.

Like everything though, it's not perfect and it requires a mix of other systems to work well.

Not a confused mix though. A perfectly proportional mix.

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