Capitalist.jpg

What Does ‘Capitalism’ Mean To You?

We have had a number of discussions recently (for example those on the Pope’s recent statements) where it is clear that there is no shared definition of ‘capitalism’. This is, perhaps, not surprising, since (a) it is notoriously difficult to define; and (b) many of the definitions (and the term itself) come from capitalism’s enemies.

A fai…

  1. BrentB67

    The first three definitions all capture appropriate aspects of capitalism.

    The criticism piece has some reasonable elements, but is selective in application.

    Idolatry and blasphemy can exist without capitalism and the opportunity to accumulate private property. However, materialistic idolatry may be more infectious in a free/capitalistic society. 

    The criticism goes to a deeper issue as it relates to the system of government that tends to foster capitalism, specifically democracy or democratic republics such as we have (or had).

    Democracy as we craft it strives to guarantee life, liberty and the pursuit of happiness; the common denominator of which is private property. For a system of government, society, and capitalism to endure there must be an element of virtue of the citizens. For each right that has been granted by our Creator there is an offsetting responsibility that underlies the fabric of our society. Our Constitution and laws should memorialize those virtues.

    In absence of those virtues the system of government in which capitalism should thrive fails, as ours is doing now, and it is easier to blame ‘the system’ i.e. capitalism rather than take responsibility for our individual failings.

  2. Crabby Appleton

    In a nutshell: Capitalism is an organic economic system characterized by spontaneous, ‘chaotic’ dynamism, like any natural/cultural process or entity. Socialism, especially ‘scientific’ socialism [ yeah, I'm look in' at YOU, Marx] is an intellectual construct and therefore, completely synthetic. Capitalism needs to be tended to, like a garden, socialism must be enforced.

  3. Joseph Paquette

    The most important product of capitalism is that no other system has distributed more goods and services to more people, and lifted more people out of proverty.  Any definition should include it’s success over other economic systems.

  4. genferei
    BrentB67: The criticism goes to a deeper issue as it relates to the system of government that tends to foster capitalism, specifically democracy or democratic republics such as we have (or had).

    I’m not sure that democracy and capitalism don’t exist in tension, rather than democracy fostering capitalism. After all, the countries where capitalism grew up were not terribly democratic compared to the ‘stable’ democracies of today.

    Indeed, there is probably a close correlation between extension of the franchise and the shrinking of economic freedom as politicians take to bribing the electorate with one-another’s money, government reaches out to ‘protect’ the ‘vulnerable’ from ‘the market’, and a permanent and metastasizing state apparatus takes root.

  5. Aaron Miller

    I love capitalism, but agree with that Catholic critique. To say capitalism generally leads to materialism is not necessarily an argument against capitalism. It’s like pointing out that fame often leads to indulgences in lust and abuse of power. Fame isn’t bad. Power isn’t bad. But they introduce and exagerrate particular temptations.

    Capitalism frees people from having to slave for basic necessities. It showers us in a wondrous variety of products, services and opportunities. But freedom and affluence have their own challenges. We should be aware of those natural temptations and acknowledge that there is more to life than economics.

  6. Keith

    “But a capitalist society tends to disregard other motives as unworthy of mention. Education, for example, is justified in terms of how much it will increase one’s salary, and the institutionalized pressure for ever greater sales, ever improving performance over the previous quarter, pushes many into making mere gain their goal. Capitalism hardly acknowledges the existence of any other motive or reason for being except accumulation of wealth.”

    I think this critique misses something. I’m not sure I can explain it.

    The reality of our country is that Technology changes and it changes everything.

    When you strip away everything our society has, the wealth we have, the technology we enjoy, you still find at the end of the day you need to eat, have shelter and provide for your family. That takes money, the fruit of your labor.

    Capitalism is the “ism” that lets you keep the fruit of your own labor.

    Critiques of Capitalism are just rabbit trails that might as well be avoided, except when you need to defend it from thieves like Socialists, Communists, Fascists and Cronyists.

    Redistributionists are Thieves.

  7. Richard Fulmer
    Aaron Miller: I love capitalism, …

    I don’t love capitalism.  I love freedom.  Capitalism is just something that happens when people are free.

  8. iWc

    Capitalism is the result of believing that every individual is entitled to own what they create. It is a wonderful thing.

    Capitalism is also, not coincidentally, responsible for the explosion in innovation, and the betterment of life for all mankind.

    To my mind, the Catholic critique quoted is simple-minded. Freedom to own something does not make ownership the most important thing in our lives.  On the contrary. But it makes the accumulation and wielding of weath possible. And with great wealth, comes great opportunity to improve the world.

  9. James Of England

    Marx’s definition of capitalism was a society that had moved beyond feudalism but had not yet arrived at communism. Since a communist state is one where the largest class controls the means of production, the United States has been, by Marx’s definitions, communist since at least the 1950s, when the middle class expanded beyond the size of the working class (using Marx’s definitions of class). The Soviet Union never attained communism (as any communist student knows), having attempted to get there in one leap from the borderline of feudalism and capitalism.

    In other words, for the duration of the Cold War, the USSR (and most of eastern Europe) was capitalist and the US (and most of the West) was communist.

    I find this to be a helpful thing to remember when people use the USSR as evidence of Marx’s thought; the extent to which Marx was perverted is hard to overstate.

  10. OSweet

    Original sin. Growing up and well into my 20s I always assumed capitalism would destroy the planet by, oh, about 1998. And then we’d be doomed to the Soylent Green world.

    I think it takes the average person a good old-fashioned epiphany (Schumpeterian?) to understand that capitalism rightly understood is a bona fide good thing, and responsible for most of what’s good about our modern world.

  11. Z in MT

    Capitalism is the only moral system of society.  Under pure capitalism, wealth can only be created by first giving your wealth to others.  The capitalist can only create more wealth for his self by first offering his wealth – in assets or labor – to another in the hope that that wealth will be returned with profit.

    Take a look at Mitt Romney.  Any honest person would agree that Romney is a very generous person.  Did Romney gather 200 million plus in wealth by hoarding the 1 million his father gave him?  No, over the course of his career he gave billions of dollars to entrepreneurs to create businesses and ideas – wealth.  He was so good at giving away his wealth – both his money, and his investors wealth that they gave to him – that it was returned to him and his investors many fold.

    All other systems are destined to degenerate to merely subsistence because they all begin with taking.

  12. tabula rasa

    I’m no economist, but I believe a working capitalist system (in other words, a capitalist system that is largely undistorted)  has the following features:

    1.  Privately-owned businesses. 

    2.  Those businesses are funded by private capital (and not by government subsidies–either directly or through the tax code).

    3.  Capital providers are entitled to either share in profits (and losses) or to interest on money loaned to the business.

    4. The government should not bear the risk of loss nor should it confiscate profits (other than a reasonable tax that it equal in level to that imposed on other taxpayers–the tax on capital gains should be lower in order to encourage capital infusions to new and existing businesses).

    5.  A working legal system to secure the foregoing.  

    6.  Some (very low) level of regulation to protect customers, investors, and employees. (And by this I mean levels of regulation far lower than currently exist).

    Then let the best businesses win.

  13. Z in MT

    Follow up:

    Wealth is not wealth if it is not used.  Hoarding gold in a vault is not wealth.  Zuckerberg’s billions tied up in Facebook stock is wealth.  Warren Buffet’s billions tied up in hundreds of enterprises across the country is wealth.  Your 401k invested in index funds is wealth.  An engineer with a degree from Cal Tech has human capital – wealth.

    A 100 million dollars in idle equipment at a loss making steel mill is not wealth.  Buying those assets and selling them off 50 cents on the dollar creates at least 50 million dollars in wealth.  Wealth is only wealth if it creates more wealth.

  14. Z in MT

    Sorry for the sermonizing. 

    Please read the first couple chapters of Wealth and Poverty by George Gilder, to truly understand why Capitalism is the only moral economicpolitical system.

  15. JimGoneWild

    Capitalism: The economic outcome of people with liberty.

  16. genferei
    iWc: Capitalism is the result of believing that every individual is entitled to own what they create.

    Marxists would say: ‘No – one of the defining characteristics of capitalism is that the worker is not entitled to own what they create. The surplus of the value they create over their wage is appropriated by the capitalist. Indeed, the worker must sell their very labour, their human agency, in return for a wage.’

  17. genferei
    iWc: To my mind, the Catholic critique quoted is simple-minded. Freedom to own something does not make ownership the most important thing in our lives.  On the contrary. But it makes the accumulation and wielding of weath possible. And with great wealth, comes great opportunity to improve the world. · 2 hours ago

    Quite. Some of the criticism does seem to come from a comparison with the City of God, rather than anything that has ever really existed in the City of Man. That is not to say that criticism – or correction – of consciences is not required, but to turn it into a critique of a system, let alone a set of policy prescriptions requires something more convincing than:

    The “love of money” which St. Paul excoriates now replaces love of God, love of family and friends, love of learning as society’s chief pursuit.

    This seems to imply that there was some pre-existing system where love of God, love of family and friends and/or love of learning was society’s chief pursuit. Where? When? Who?

  18. genferei
    Keith Bruzelius: “But a capitalist society tends to disregard other motives as unworthy of mention. … Capitalism hardly acknowledges the existence of any other motive or reason for being except accumulation of wealth.”

    I think this critique misses something. I’m not sure I can explain it.

    Me neither. But perhaps it shares a problem with many shallow critiques of materialism, in the sense of “acquiring material possessions … as a central life goal with the belief that possessions are the key to happiness and that success can be judged by people’s material wealth”.

    In the real world it is not the material qualities of the possessions that are valued: it is not the physical makeup of the Lamborghini that is important, but the way its performance and its looks point to something beyond the material plane. Similarly with opera tickets and expensive meals. (Are there better ways to access the numinous than owning a Rolex? Of course. But it is also common to put stained glass windows in cathedrals.)

    Perhaps it is too easy to conflate economic materialism with philosophical materialism.

  19. Doug Scott

    Capitalism is where a person uses his/her wits and resources to get what he/she wants by giving other people what they want.

  20. Guruforhire

    voluntary exchange for mutual gain.

Want to comment on stories like these? Become a member today!

You'll have access to:

  • All Ricochet articles, posts and podcasts.
  • The conversation amongst our members.
  • The opportunity share your Ricochet experiences.

Join Today!

Already a Member? Sign In