How was the development of Protestantism and capitalism linked?

One of the principles of early Protestantism was the priesthood of all believers. This meant that there was no separate or distinct group of people in society with a direct, or special, connection to God. Among other things, this meant that there was no need for a specific group of people to spread the Gospel or minister on God's behalf. Every single believer can do this.
As no particular profession or way of life was more intrinsically holy than any other, Christians could serve God in many different ways, making use of the talents that the divine Creator had graciously bestowed upon them. People discovered that they could attain status in society that was wholly secular, and did not require the sanction of the Church. This paved the way for the growth and development of capitalism, which allowed enterprising individuals to make their way in the world, safe in the knowledge that salvation was entirely within God's gift, and that there was nothing they could do to contribute to their being saved.
Suitably disburdened, Protestants were thus free to concentrate on more worldly concerns. In such an environment, capitalism began to thrive. Protestantism was, and is, a highly individualistic faith, one that exhorts the faithful, among other things, to read the Bible for themselves and to recognize that they have a personal connection with God, free from any priestly intermediaries.
Specifically, Calvinism, with its emphasis on the pre-destined salvation of an elect group of believers, also contributed greatly to the rise of capitalism. Although Calvinists believed that election had been determined by God before time, they nonetheless also held that it was possible to detect outward signs of who had been saved and who hadn't. To that end, worldly success, forged by the individual in the capitalist market place, was strongly suggestive of one's place among the select few destined for salvation.
The social values associated with capitalism––hard work, thrift, individual responsibility––were largely inherited from Protestantism. Although capitalism didn't create these values, it did serve to organize them into a more recognizably secular system of ethics, one that has proved hugely influential right up to the present day.