Capitalism

In common usage capitalism refers to an economic system in which all or most of the means of production are privately owned and operated, and where investment and the production, distribution and prices of commodities (goods and services) are determined privately in a free market, rather than by the state. Those in control of the means of production generally run them for monetary profit. For examples of how capitalism has been defined by various sources, see .

History of theory of capitalism

Main article: History of theory of capitalism

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The conception of what constitutes capitalism has changed significantly over time, as well as varying depending on the political perspective and analytical approach taken. Adam Smith's advocacy of economic liberalism focused on the role of enlightened self-interest (the "invisible hand") and the role of specialisation in making capital accumulation efficient. Some proponents of capitalism (like Milton Friedman, Ayn Rand and Alan Greenspan) emphasize the role of free markets, which they claim promote cooperation between individuals, innovation, economic growth, as well as liberty. For many (like Immanuel Wallerstein), capitalism hinges on the elaboration of an economic system in which goods and services are traded in markets, and capital goods belong to non-state entities, onto a global scale. For others (like Karl Marx), it is defined by historically unprecedented social relations resulting from the creation of a labor market in which most people have to sell their labor-power in order to survive. As Marx argued (see also Hilaire Belloc), capitalism is also distinguished from other market economies with private ownership by the concentration of the means of production in the hands of individuals. The economists of the Austrian School expound that an economy that is not planned or guided by governmental authority will be superior in efficiency and organization due to the phenomenon of self organization. Many others use capitalism as a synonym for a market economy.

Related Topics:
Adam Smith - Economic liberalism - Specialisation - Milton Friedman - Ayn Rand - Alan Greenspan - Free market - Cooperation - Liberty - Immanuel Wallerstein - Goods - Service - Market - Karl Marx - Labor market - Labor-power - Hilaire Belloc - Austrian School - Self organization - Market economy

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