Economic system where the means of production are privately owned
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  • FreedomPedia
  • Capitalism is an economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system and competitive markets. In a capitalist market economy, decision-making and investment is determined by the owners of the factors of production in financial and capital markets, and prices and the distribution of goods are mainly determined by competition in the market.

    Reference

    NewCapitalism, by Robert Hessen, The Concise Encyclopedia of Economics
    "'Capitalism,' a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for 'economic individualism,' which Adam Smith earlier called 'the obvious and simple system of natural liberty' (Wealth of Nations). Economic individualism's basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. ... Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge."

    Articles

    A Hit Man Confesses, by Christopher Westley, Mises Daily, 12 Dec 2006
    Comments and criticises John Perkins' Confessions of an Economic Hit Man
    "The first [popular path to wealth in the private sector] is tried and true method: you try to anticipate consumers' needs, and then risk your capital trying to satisfy them. Successful entrepreneurs anticipate and satisfy correctly, while the unsuccessful ones don't. ... Any creation of wealth that depends on coercion can hardly be considered market capitalism."
    Bourgeois Virtues?, by Deirdre N. McCloskey, Cato Policy Report, May 2006
    Offers an apologia (formal defense) of capitalism, in particular of the phrase "bourgeois virtues" as being neither a contradiction in terms nor a lie
    "Modern capitalism does not need to be offset to be good. Capitalism can, on the contrary,be virtuous. In a fallen world the bourgeois life is not perfect. But it's better than any available alternative. American capitalism needs to be inspirited, moralized,completed. ... One of the ways capitalism works 'pretty well,' Mueller and I and a few other loony pro-capitalists such as Michael Novak and James Q. Wilson and Hernando De Soto and the late Robert Nozick claim, is to nourish the virtues."
    Capitalism Saves Us All, by Bernard Chapin, 14 Jun 2004
    A review of How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present by Thomas J. DiLorenzo
    "Di Lorenzo illustrates that even the poorest of the poor continue to have the chance to rise through our capitalist system, and they frequently make use of this opportunity. ... Capitalism, through its cheaper goods and higher wages, has distinctly benefited the working class. A hundred years ago, the fattest of the fat cats could not purchase the same type of goods that your average retail worker can purchase today ..."
    Perspective: The Road Ahead, by John T. Flynn, The Freeman, Oct 1995
    From Forgotten Lessons: Selected Essays of John T. Flynn, 1949; enumerates a set of principles that Flynn thought were crucial to reversing the direction the United States was in (mixing capitalism with socialism)
    "Since 1933 the Government has waged relentless war upon the capitalist system—at first ignorantly, but recently with a definite design to cripple and destroy it. The man who runs a business has been pilloried as a criminal, and the Government has taken measures to prevent him from accumulating those savings which make expansion possible. It has held him up to public scorn and hatred. It has taxed away his savings, and it has so choked the streams through which savings flow into investment that our system is wilting away."
    Related Topics: Liberty, Socialism
    The Economics of Here to There, by Jeffrey A. Tucker, Mises Daily, 17 Jan 2007
    Discusses the necessity of product advertising, how more people are becoming aware that it is needed and why it is "tacky and unbearable"
    "How does a product or a service go from being a good idea or even a physical possibility to being available for people and available for consumption? Here is the major issue that has never been solved by any other system but capitalism. And capitalism solves it in a way that is wealth-generating and leads to constant improvements. ... [Through mass blogging], average people are beginning to see the great hidden cost of capitalist production: getting from here to there."
    Related Topic: Entrepreneurship
    Why Do Intellectuals Oppose Capitalism?, by Robert Nozick, Cato Online Policy Report, Jan 1998
    Posits that "wordsmith" (as opposed to "numbersmith") intellectuals often resent capitalism because the market society does not reward them as their schooling did
    "A capitalist society is peculiar in that it seems to announce that it is open and responsive only to talent, individual initiative, personal merit. ... Despite the created expectation, a capitalist society rewards people only insofar as they serve the market-expressed desires of others; it rewards in accordance with economic contribution, not in accordance with personal value."
    Related Topics: Free Market, Society
    Child Labor and the British Industrial Revolution, Part 1, by Lawrence Reed, Future of Freedom, Sep 1999
    Contrasts the situation of "free labour" and "parish apprentice" children during the British Industrial Revolution, the latter being mostly orphans placed in the custody of parish, i.e., government, authorities
    "The mass exodus from the socialist continent to increasingly capitalist, industrial Britain in the first half of the 19th century strongly suggests that people did indeed find the industrial order an attractive alternative. And no credible evidence exists that argues that parents in the early capitalist days were any less caring of their offspring than those of pre-capitalist times."
    Dialectics and Liberty: A Defense of Dialectical Method in the Service of a Libertarian Social Theory, by Chris Matthew Sciabarra, The Freeman, Sep 2005
    Written ten years after publication of the first of Sciabarra's "Dialectic and Liberty" book trilogy, discusses Hayek's and Rand's dialectical analysis approaches and suggests that such context-keeping analysis is important in radical libertarian theory
    "But as F. A. Hayek and others have pointed out, the very word 'capitalism' was a product of the socialist conception of history. It took a major effort by twentieth-century thinkers to provide a thorough reconceptualization of the market society and its foundations. Among these were Austrian economists, such as Ludwig von Mises and Hayek himself, who viewed the market in dynamic and institutional terms, and philosophers, such as Ayn Rand, who articulated an objective moral ethos at the base of 'capitalism: the unknown ideal.'"
    Epistemology and Politics: Ayn Rand's Cultural Commentary, by David Kelley, Navigator, Dec 2004
    Discusses Rand's 1960 essay "Faith and Force: The Destroyers of the Modern World" and the continued currency of her writings
    "Capitalism is the social system based on trade—exchange to mutual benefit—in which 'every person, every individual, is an end in himself, not a sacrificial animal serving anyone's needs.' But conservatives, afraid to reject altruism, limited themselves to the argument that capitalism serves the public good by producing economic abundance. ... It ... produces the bizarre spectacle of defenders of capitalism speaking as if self-interest and the profit motive played no role in it."
    Related Topics: Epistemology, Politics, Ayn Rand
    Give Me Liberty, by Rose Wilder Lane, 1936
    Originally published as an article titled "Credo" in the Saturday Evening Post; describes her experiences in and history of Soviet Russia and Europe, contrasting them with the history of the United States, emphasizing the individualist themes
    "The Capitalist cannot be found; he does not exist. Men of many different minds and for many purposes, or by accident or luck or the skill of a pirate, created huge business and financial organizations and fought to make them bigger and to draw bigger profits from them. But here everything was fluid, changing and uncertain; nothing was static and secure. Here was no solidly established class, placed in a social order and holding lower classes steady like cows to be milked."
    "I Have a Plan...", by Ron Paul, 18 Oct 2004
    Criticises political ads and speeches that present plans for government to "run" the economy or the country
    "By contrast, capitalism--which is to say economic freedom-- raises the standard of living for everyone in a society. But we must understand what capitalism really is. Capitalism is not a system, but rather the result of free individuals taking economic actions without interference by government. A true capitalist economy is neither planned by bureaucrats nor steered by regulators. This is why it's so important that we resist the idea that any president should plan our economy."
    Related Topics: Socialism, Limited Government
    Is Capitalism Why We Fight?, by Gregory Bresiger, Mises Daily, 6 Apr 2006
    Critical review of the theses presented in the 2005 documentary Why We Fight, also inquirying about topics omitted from the film
    "Capitalism wants peace, Schumpeter argued. Wherever capitalism was the purest, wherever laissez-faire reigned, there were considerable peace parties. ... Although 'Why We Fight' sometimes attacks capitalism, we rarely hear from American capitalists, who historically have opposed much of the inflation and disasters that have been the result of the imperial policies of at least the last half-century."
    Middle-of-the-Road Policy Leads to Socialism, by Ludwig von Mises, 18 Apr 1950
    Speech to the University Club of New York; argues that the middle of the road policies of interventionism, such as price controls and progressive taxation, eventually lead to socialism via central planning
    "The antagonism between capitalism and socialism ... is a controversy about which two schemes for society's economic organization, capitalism or socialism, is conducive to the better attainment of those ends which all people consider as the ultimate aim of activities commonly called economic, viz., the best possible supply of useful commodities and services. Capitalism wants to attain these ends by private enterprise and initiative, subject to the supremacy of the public's buying and abstention from buying on the market."
    Mises: Defender of Freedom, by George Reisman, Mises Daily, 29 Sep 2006
    Describes several of Mises' contributions to economics theory and other areas, along with some personal reminiscences
    "Mises identified the existence of planning under capitalism ... that the prices serve to coordinate and harmonize the activities of all the millions of separate, independent planners. He showed that each individual, in being concerned with earning a revenue or income and with limiting his expenses, is led to adjust his particular plans to the plans of all others."
    On Equality and Inequality, by Ludwig von Mises, Modern Age, 1961
    Examines the premise that "all men are created equal" and some possible as well as purported conclusions
    "The market economy — capitalism — radically transformed the economic and political organization of mankind. ... While under precapitalistic conditions superior men were the masters on whom the masses of the inferior had to attend, under capitalism the more gifted and more able have no means to profit from their superiority other than to serve to the best of their abilities the wishes of the majority of the less gifted."
    Socialism and Medicine, Part 2, by William L. Anderson, Future of Freedom, Jun 2008
    Examines the economics of medical care in the United States, including the influence of third-party payers and comparisons to medical care in Canada
    "In a capitalist system, such decisions are made within the nexus of economic calculation, in which one makes economic choices based on the prospect of profit. For example, if it could be shown that a new MRI or CAT scan could have a good return on investment, it would make sense for a medical center to purchase such a device."
    Socialized Medicine in a Wealthy Country, by Llewellyn H. Rockwell, Jr., Mises Daily, 2 Dec 2006
    Discusses the view of socialised medicine held by left-socialists, examining the problems that existed in Soviet-controlled countries as well as current U.S. problems, and urges for a "complete separation of health and state"
    "We need an economic system that can calculate the best use of resources. It requires the division of labor and a complex capital structure for products to reach a general market. ... There must be a way for consumers to transmit information about their most urgent needs to producers, and there needs to be a means for producers to decide among alternative uses of resources. ... In short, without capitalism, medical services cannot reach the multitudes."
    Thanksgiving the first Libertarian holiday, by Matthew A. Givens, The Crimson White, 19 Nov 2003
    Explains how and why the Pilgrims turned from socialism to capitalism
    "After the poor harvest of 1622, the colony brainstormed for a way to raise more corn and obtain a better crop. The solution, like the Thanksgiving story told today, was simple. In 1623, Bradford 'gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit.' The socialistic experiment that had failed them was abandoned and replaced with capitalism."
    Related Topics: Thanksgiving, Socialism
    The Idea of Liberty is Western, by Ludwig von Mises, American Affairs, Oct 1950
    Argues that the "idea of liberty is and has always been peculiar to the West", meaning primarily the cities of ancient Greece, and discusses "liberty" as viewed by Harold Laski, contrasting, for example, life under Stalin with Italy under fascism
    "... under capitalism everybody is free to challenge the vested interests of everybody else. If he thinks that he has the ability to supply the public better or more cheaply than other people do, he may try to demonstrate his efficiency. ... the capitalists are always in search of men who can utilize their funds in the most profitable way."
    Related Topics: Liberty, Greece, Socialism
    The Invisible Gnomes and the Invisible Hand: South Park and Libertarian Philosophy, by Paul Cantor, 4 Dec 2006
    Includes detailed review and discussion of season 2 "Gnomes" episode
    "The people ... take it for granted that the shelves of their supermarkets will always be amply stocked with a wide variety of goods and never appreciate all the capitalist entrepreneurs who make that abundance possible. What is worse, the ordinary citizens misinterpret capitalist activity as theft."

    Books

    Capitalism: The Unknown Ideal
        by Ayn Rand, Nathaniel Branden ("Common Fallacies About Capitalism" and "Alienation"), Alan Greenspan, Robert Hessen, 1946
    Essays by Rand, Nathaniel Branden, Alan Greenspan and Robert Hessen; partial list: What is Capitalism? - Gold and Economic Freedom - The Anatomy of Compromise - Conservatism: An Obituary - The New Fascism: Rule by Consensus - The Nature of Government
    Capitalism and Freedom
        by Milton Friedman, 1962
    Partial contents: The Relation Between Economic Freedom and Political Freedom - The Role of Government in a Free Society - The Control of Money - International Financial and Trade Arrangements - Fiscal Policy - The Role of Government in Education
    • ISBN 0786100494: Audio cassette, Blackstone Audiobooks, 1993
    • ISBN 0226264203: Hardcover, University Of Chicago Press, 40th anniv edition, 2002
    • ISBN 0226264017: Paperback, University Of Chicago Press, 2nd edition, 1982
    • ISBN 0226264211: Paperback, University Of Chicago Press, 40th anniv edition, 2002
    Capitalism for Kids: Growing Up to Be Your Own Boss
        by Karl Hess, 1987
    Partial contents: Money and You - What Kind of Person Are You? - Capitalism and Other Isms - The Wonderful World of Work - Your Friend, The Computer - The Family That Works Together - Investing Time and Dollars - Are You a Volunteer?
    Related Topic: Children
    How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present
        by Thomas J. DiLorenzo, 2004
    Partial contents: What Is Capitalism? - Anticapitalism - How Capitalism Saved the Pilgrims - America's Capitalist Revolt - Highways of Capitalism - How Capitalism Enriched the Working Class - The Truth About the "Robber Barons" - Antitrust Myths
    The Anti-Capitalistic Mentality
        by Ludwig von Mises, 1956
    Partial contents: The Social Characteristics of Capitalism and the Psychological Causes of its Vilification - The Ordinary Man's Social Philosophy - Literature Under Capitalism - The Noneconomic Objections to Capitalism - "Anticommunism" versus Capitalism
    The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else
        by Hernando de Soto, 2000
    Contents: The Five Mysteries of Capital - The Mystery of Missing Information - The Mystery of Capital - The Mystery of Political Awareness - The Missing Lessons of U.S. History - The Mystery of Legal Failure - By Way of Conclusion

    Music


    Capitalism
    Song written by Dan Elfman, performed by Oingo Boingo

    Videos


    Is Capitalism Part of the Answer? - 04 - David Graeber speaks, by David Graeber, 3 Nov 2014
    Part of the Putney Debates 2014: professor David Graeber of the London School of Economics gives the opposing view

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