Capitalism: A political system that acknowledges and protects individual rights.
Capitalism is often thought of as an economic system. This is just a result of Capitalism, not the whole of it. When individual rights are consistently protected, including property rights and freedom of association, free markets are the result. But there are other results. Most so-called "social freedoms" are also guaranteed, if they are consistent with individual rights. Freedom of speech is guaranteed. Privacy is protected. One's sex life is only of concern to the consenting adults involved. And so on.
Capitalism is often confused with American-style economics. In practice, America has a mixture of economic freedoms and economics controls. Individual rights are not consistently protected. The government interferes with those rights via regulations, taxation, manipulations of the money supply, trade rules and tariffs, and interference in the freedom of association, such as with labor unions and employment regulations. One significant cost to confusing Capitalism with American economics is that many negative aspects of the American economic system are due to the government involved in the economy, which are the opposite of a Capitalist system.