Definition of Capitalism

"Capitalism" is conventionally defined along economic terms such as the following:

An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

This is an example of a definition by non-essentials. An essential definition of capitalism is a political definition:
Capitalism is a social system based on the principle of individual rights.

In order to have an economic system in which "production and distribution are privately or corporately owned", you must have individual rights and specifically property rights. The only way to have an economic system fitting the first definition is to have a political system fitting the second definition. The first is an implication of the second. Because the second, political, definition is fundamental and the cause of the first, it is the more useful definition and is preferable.

Because people often use the term "Capitalism" loosely, "Laissez Faire Capitalism" is sometimes used to describe a true Capitalist system. But this phrase is redundant.

It is important to define "Capitalism" correctly because a proper definition is a prerequisite to a proper defense. Capitalism is the only moral political system because it is the only system dedicated to the protection of rights, which is a requirement for human survival and flourishing. This is the only proper role of a government. Capitalism should be defended vigorously on a moral basis, not an economic or utilitarian basis.

Copyright 2001 by Jeff Landauer and Joseph Rowlands