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Capitalism is an
economic system An economic system, or economic order, is a system of Production (economics), production, resource allocation and Distribution (economics), distribution of goods and services within a society or a given geographic area. It includes the combinati ...
based on the
private ownership Private property is a legal designation for the ownership of property by non-governmental Legal personality, legal entities. Private property is distinguishable from public property and Personal property, personal property, which is owned by a s ...
of the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...
and their operation for
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory intere ...
. Central characteristics of capitalism include
capital accumulation Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form o ...
, competitive markets, price system,
private property Private property is a legal designation for the ownership of property by non-governmental legal entities. Private property is distinguishable from public property and personal property, which is owned by a state entity, and from collective or ...
, property rights recognition, voluntary exchange, and
wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a ...
. In a
market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
and
financial market A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial markets ...
s—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
s,
historian A historian is a person who studies and writes about the past and is regarded as an authority on it. Historians are concerned with the continuous, methodical narrative and research of past events as relating to the human race; as well as the stu ...
s, political economists and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include ''
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
'' or free-market capitalism,
anarcho-capitalism Anarcho-capitalism (or, colloquially, ancap) is an anti-statist, libertarian, and anti-political philosophy and economic theory that seeks to abolish centralized states in favor of stateless societies with systems of private property enforce ...
, state capitalism and welfare capitalism. Different
forms of capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private p ...
feature varying degrees of
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
s, public ownership, obstacles to free competition and state-sanctioned
social policies Social policy is a plan or action of government or institutional agencies which aim to improve or reform society. Some professionals and universities consider social policy a subset of public policy, while other practitioners characterize soci ...
. The degree of
competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...
in
markets Market is a term used to describe concepts such as: * Market (economics), system in which parties engage in transactions according to supply and demand * Market economy *Marketplace, a physical marketplace or public market Geography *Märket, a ...
and the role of intervention and
regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...
as well as the scope of state ownership vary across different models of capitalism. The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases
economic planning Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources b ...
.Stilwell, Frank. "Political Economy: the Contest of Economic Ideas". First Edition. Oxford University Press. Melbourne, Australia. 2002. Market economies have existed under many forms of government and in many different times, places and cultures. Modern capitalist societies developed in Western Europe in a process that led to the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
. Capitalist systems with varying degrees of direct government intervention have since become dominant in the
Western world The Western world, also known as the West, primarily refers to the various nations and state (polity), states in the regions of Europe, North America, and Oceania.
and continue to spread.
Economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
is a characteristic tendency of capitalist economies.


Etymology

The term "capitalist", meaning an owner of
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
, appears earlier than the term "capitalism" and dates to the mid-17th century. "Capitalism" is derived from ''capital'', which evolved from , a late
Latin Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally a dialect spoken in the lower Tiber area (then known as Latium) around present-day Rome, but through the power of the ...
word based on , meaning "head"—which is also the origin of "
chattel Chattel may refer to: * Chattel, an alternative name for tangible personal property * A chattel house, a type of West Indian dwelling * A chattel mortgage, a security interest over tangible personal property * Chattel slavery, the most extreme form ...
" and "
cattle Cattle (''Bos taurus'') are large, domesticated, cloven-hooved, herbivores. They are a prominent modern member of the subfamily Bovinae and the most widespread species of the genus ''Bos''. Adult females are referred to as cows and adult mal ...
" in the sense of movable property (only much later to refer only to livestock). emerged in the 12th to 13th centuries to refer to funds, stock of merchandise, sum of money or money carrying interest.James Augustus Henry Murray. "Capital"
A New English Dictionary on Historical Principles
''Oxford English Press''. 2. p. 93.
By 1283, it was used in the sense of the capital assets of a trading firm and was often interchanged with other words—wealth, money, funds, goods, assets, property and so on. The ''Hollantse (german: holländische) Mercurius'' uses "capitalists" in 1633 and 1654 to refer to owners of capital. In French,
Étienne Clavier Étienne Clavier (26 December 1762 in Lyon – 18 November 1817 in Paris) was a French Hellenist and magistrate. The son of a wealthy merchant of Lyon, he made early studies of the Classical languages, followed by studies of law in Paris. In 1 ...
referred to ''capitalistes'' in 1788, four years before its first recorded English usage by Arthur Young in his work ''Travels in France'' (1792). In his ''
Principles of Political Economy and Taxation '' the Principles of Political Economy and Taxation'' (19 April 1817) is a book by David Ricardo on economics. The book concludes that land rent grows as population increases. It also presents the theory of comparative advantage, the theory that ...
'' (1817),
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British Political economy, political economist. He was one of the most influential of the Classical economics, classical economists along with Thomas Robert Malthus, Thomas Malthus, Ad ...
referred to "the capitalist" many times. English poet
Samuel Taylor Coleridge Samuel Taylor Coleridge (; 21 October 177225 July 1834) was an English poet, literary critic, philosopher, and theologian who, with his friend William Wordsworth, was a founder of the Romantic Movement in England and a member of the Lake Poe ...
used "capitalist" in his work ''Table Talk'' (1823).
Pierre-Joseph Proudhon Pierre-Joseph Proudhon (, , ; 15 January 1809, Besançon – 19 January 1865, Paris) was a French socialist,Landauer, Carl; Landauer, Hilde Stein; Valkenier, Elizabeth Kridl (1979) 959 "The Three Anticapitalistic Movements". ''European Socia ...
used the term in his first work, ''
What is Property? "Property is theft!" (french: La propriété, c'est le vol!) is a slogan coined by French anarchist Pierre-Joseph Proudhon in his 1840 book ''What Is Property? or, An Inquiry into the Principle of Right and of Government''. Overview By "pro ...
'' (1840), to refer to the owners of capital.
Benjamin Disraeli Benjamin Disraeli, 1st Earl of Beaconsfield, (21 December 1804 – 19 April 1881) was a British statesman and Conservative politician who twice served as Prime Minister of the United Kingdom. He played a central role in the creation o ...
used the term in his 1845 work ''
Sybil Sibyls were oracular women believed to possess prophetic powers in ancient Greece. Sybil or Sibyl may also refer to: Films * ''Sybil'' (1921 film) * ''Sybil'' (1976 film), a film starring Sally Field * ''Sybil'' (2007 film), a remake of the 19 ...
''. The initial use of the term "capitalism" in its modern sense is attributed to Louis Blanc in 1850 ("What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861 ("Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labor").
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...
frequently referred to the "
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
" and to the "capitalist mode of production" in ''
Das Kapital ''Das Kapital'', also known as ''Capital: A Critique of Political Economy'' or sometimes simply ''Capital'' (german: Das Kapital. Kritik der politischen Ökonomie, link=no, ; 1867–1883), is a foundational theoretical text in Historical mater ...
'' (1867).MEW, 23, & Das Kapital. Kritik der politischen Oekonomie. Erster Band-Verlag von Otto Meissner (1867) Marx did however not use the form ''capitalism'', but instead used
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
, ''capitalist'' and ''capitalist mode of production'', which appear frequently. Due to the word being coined by socialist critics of capitalism, economist and historian Robert Hessen stated that the term "capitalism" itself is a term of disparagement and a misnomer for
economic individualism Individualism is the moral stance, political philosophy, ideology and social outlook that emphasizes the intrinsic worth of the individual. Individualists promote the exercise of one's goals and desires and to value independence and self-relianc ...
. Bernard Harcourt agrees with the statement that the term is a misnomer, adding that it misleadingly suggests that there is such as a thing as "
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
" that inherently functions in certain ways and is governed by stable economic laws of its own. In the
English language English is a West Germanic language of the Indo-European language family, with its earliest forms spoken by the inhabitants of early medieval England. It is named after the Angles, one of the ancient Germanic peoples that migrated to the is ...
, the term "capitalism" first appears, according to the ''
Oxford English Dictionary The ''Oxford English Dictionary'' (''OED'') is the first and foundational historical dictionary of the English language, published by Oxford University Press (OUP). It traces the historical development of the English language, providing a com ...
'' (OED), in 1854, in the novel ''
The Newcomes ''The Newcomes: Memoirs of a Most Respectable Family'' is a novel by William Makepeace Thackeray, first published in 1854 and 1855. Publication ''The Newcomes'' was published serially over about two years, as Thackeray himself says in one of t ...
'' by novelist William Makepeace Thackeray, where the word meant "having ownership of capital".James Augustus Henry Murray. "Capitalism" p. 94. Also according to the OED,
Carl Adolph Douai Karl Daniel Adolf Douai (1819 – 1888), known to his peers as "Adolf", was a German Texan teacher as well as a socialist and Abolitionism in the United States, abolitionist newspaper editor. Douai was driven from Texas in 1856 due to his published ...
, a
German American German Americans (german: Deutschamerikaner, ) are Americans who have full or partial German ancestry. With an estimated size of approximately 43 million in 2019, German Americans are the largest of the self-reported ancestry groups by the Unite ...
socialist Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
and abolitionist, used the term "private capitalism" in 1863.


History

Capitalism in its modern form can be traced to the emergence of agrarian capitalism and mercantilism in the early
Renaissance The Renaissance ( , ) , from , with the same meanings. is a period in European history marking the transition from the Middle Ages to modernity and covering the 15th and 16th centuries, characterized by an effort to revive and surpass ideas ...
, in city-states like
Florence Florence ( ; it, Firenze ) is a city in Central Italy and the capital city of the Tuscany region. It is the most populated city in Tuscany, with 383,083 inhabitants in 2016, and over 1,520,000 in its metropolitan area.Bilancio demografico an ...
.
Capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
has existed incipiently on a small scale for centuries in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labor. Simple
commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a comm ...
exchange and consequently simple commodity production, which is the initial basis for the growth of capital from trade, have a very long history. During the
Islamic Golden Age The Islamic Golden Age was a period of cultural, economic, and scientific flourishing in the history of Islam, traditionally dated from the 8th century to the 14th century. This period is traditionally understood to have begun during the reign ...
,
Arabs The Arabs (singular: Arab; singular ar, عَرَبِيٌّ, DIN 31635: , , plural ar, عَرَب, DIN 31635, DIN 31635: , Arabic pronunciation: ), also known as the Arab people, are an ethnic group mainly inhabiting the Arab world in Wester ...
promulgated capitalist economic policies such as free trade and banking. Their use of
Indo-Arabic numerals Arabic numerals are the ten numerical digits: , , , , , , , , and . They are the most commonly used symbols to write decimal numbers. They are also used for writing numbers in other systems such as octal, and for writing identifiers such as ...
facilitated
bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. Tr ...
. These innovations migrated to Europe through trade partners in cities such as Venice and Pisa. The Italian
mathematician A mathematician is someone who uses an extensive knowledge of mathematics in their work, typically to solve mathematical problems. Mathematicians are concerned with numbers, data, quantity, structure, space, models, and change. History On ...
Fibonacci traveled the Mediterranean talking to Arab traders and returned to popularize the use of Indo-Arabic numerals in Europe.


Agrarianism

The economic foundations of the feudal agricultural system began to shift substantially in 16th-century England as the manorial system had broken down and land began to become concentrated in the hands of fewer landlords with increasingly large estates. Instead of a
serf Serfdom was the status of many peasants under feudalism, specifically relating to manorialism, and similar systems. It was a condition of debt bondage and indentured servitude with similarities to and differences from slavery, which developed ...
-based system of labor, workers were increasingly employed as part of a broader and expanding money-based economy. The system put pressure on both landlords and tenants to increase the productivity of agriculture to make profit; the weakened coercive power of the
aristocracy Aristocracy (, ) is a form of government that places strength in the hands of a small, privileged ruling class, the aristocracy (class), aristocrats. The term derives from the el, αριστοκρατία (), meaning 'rule of the best'. At t ...
to extract peasant surpluses encouraged them to try better methods, and the tenants also had incentive to improve their methods in order to flourish in a competitive labor market. Terms of rent for land were becoming subject to economic market forces rather than to the previous stagnant system of custom and feudal obligation.


Mercantilism

The economic doctrine prevailing from the 16th to the 18th centuries is commonly called
mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...
. This period, the
Age of Discovery The Age of Discovery (or the Age of Exploration), also known as the early modern period, was a period largely overlapping with the Age of Sail, approximately from the 15th century to the 17th century in European history, during which seafarin ...
, was associated with the geographic exploration of foreign lands by merchant traders, especially from England and the
Low Countries The term Low Countries, also known as the Low Lands ( nl, de Lage Landen, french: les Pays-Bas, lb, déi Niddereg Lännereien) and historically called the Netherlands ( nl, de Nederlanden), Flanders, or Belgica, is a coastal lowland region in N ...
. Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist methods. Most scholars consider the era of merchant capitalism and mercantilism as the origin of modern capitalism,Burnham (2003)''Encyclopædia Britannica'' (2006) although Karl Polanyi argued that the hallmark of capitalism is the establishment of generalized markets for what he called the "fictitious commodities", i.e. land, labor and money. Accordingly, he argued that "not until 1834 was a competitive labor market established in England, hence industrial capitalism as a social system cannot be said to have existed before that date". England began a large-scale and integrative approach to mercantilism during the Elizabethan Era (1558–1603). A systematic and coherent explanation of balance of trade was made public through Thomas Mun's argument ''England's Treasure by Forraign Trade, or the Balance of our Forraign Trade is The Rule of Our Treasure.'' It was written in the 1620s and published in 1664. European
merchant A merchant is a person who trades in commodities produced by other people, especially one who trades with foreign countries. Historically, a merchant is anyone who is involved in business or trade. Merchants have operated for as long as indust ...
s, backed by state controls, subsidies and monopolies, made most of their profits by buying and selling goods. In the words of
Francis Bacon Francis Bacon, 1st Viscount St Alban (; 22 January 1561 – 9 April 1626), also known as Lord Verulam, was an English philosopher and statesman who served as Attorney General and Lord Chancellor of England. Bacon led the advancement of both ...
, the purpose of mercantilism was "the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of the soil; the regulation of prices...". After the period of the proto-industrialization, the
British East India Company The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...
and the
Dutch East India Company The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock ...
, after massive contributions from the Mughal Bengal,
Om Prakash Om Prakash (born Om Prakash Chibber 19 December 1919 – 21 February 1998) was an Indian film actor. He was born in Jammu as Om Prakash Chibber and went on to become a well-known character actor of Bollywood. His most well-known movies are Nam ...
,
Empire, Mughal
, ''History of World Trade Since 1450'', edited by John J. McCusker, vol. 1, Macmillan Reference USA, 2006, pp. 237–240, ''World History in Context''. Retrieved 3 August 2017
inaugurated an expansive era of commerce and trade. These companies were characterized by their colonial and
expansionary Expansionism refers to states obtaining greater territory through military empire-building or colonialism. In the classical age of conquest moral justification for territorial expansion at the direct expense of another established polity (who of ...
powers given to them by nation-states. During this era, merchants, who had traded under the previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a
return on investment Return on investment (ROI) or return on costs (ROC) is a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably ...
.


Industrial Revolution

In the mid-18th century a group of economic theorists, led by
David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999br>David Hume" ''Encyclopædia Britannica''. Retrieved 18 May 2020. was a Scottish Enlightenment philo ...
(1711–1776) and
Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...
(1723–1790), challenged fundamental mercantilist doctrines—such as the belief that the world's wealth remained constant and that a state could only increase its wealth at the expense of another state. During the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
,
industrialists A business magnate, also known as a tycoon, is a person who has achieved immense wealth through the ownership of multiple lines of enterprise. The term characteristically refers to a powerful entrepreneur or investor who controls, through perso ...
replaced merchants as a dominant factor in the capitalist system and effected the decline of the traditional handicraft skills of
artisan An artisan (from french: artisan, it, artigiano) is a skilled craft worker who makes or creates material objects partly or entirely by hand. These objects may be functional or strictly decorative, for example furniture, decorative art ...
s, guilds and
journeymen A journeyman, journeywoman, or journeyperson is a worker, skilled in a given building trade or craft, who has successfully completed an official apprenticeship qualification. Journeymen are considered competent and authorized to work in that fie ...
. Also during this period, the surplus generated by the rise of commercial agriculture encouraged increased mechanization of agriculture. Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex
division of labor The division of labour is the separation of the tasks in any economic system or organisation so that participants may specialise (specialisation). Individuals, organizations, and nations are endowed with, or acquire specialised capabilities, and ...
between and within work process and the routine of work tasks; and eventually established the domination of the capitalist mode of production. Industrial Britain eventually abandoned the protectionist policy formerly prescribed by mercantilism. In the 19th century, Richard Cobden (1804–1865) and John Bright (1811–1889), who based their beliefs on the Manchester School, initiated a movement to lower tariffs. In the 1840s Britain adopted a less protectionist policy, with the 1846 repeal of the Corn Laws and the 1849 repeal of the
Navigation Acts The Navigation Acts, or more broadly the Acts of Trade and Navigation, were a long series of English laws that developed, promoted, and regulated English ships, shipping, trade, and commerce between other countries and with its own colonies. The ...
. Britain reduced tariffs and
quotas Quota may refer to: Economics * Import quota, a trade restriction on the quantity of goods imported into a country * Market Sharing Quota, an economic system used in Canadian agriculture * Milk quota, a quota on milk production in Europe * Indi ...
, in line with David Ricardo's advocacy of
free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econo ...
.


Modernity

Broader processes of
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
carried capitalism across the world. By the beginning of the nineteenth century, a series of loosely connected market systems had come together as a relatively integrated global system, in turn intensifying processes of economic and other globalization. Late in the 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide, with the mixed economy as its dominant form in the industrialized Western world.
Industrialization Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
allowed cheap production of household items using
economies of scale In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
, while rapid
population growth Population growth is the increase in the number of people in a population or dispersed group. Actual global human population growth amounts to around 83 million annually, or 1.1% per year. The global population has grown from 1 billion in 1800 to ...
created sustained demand for commodities. The
imperialism Imperialism is the state policy, practice, or advocacy of extending power and dominion, especially by direct territorial acquisition or by gaining political and economic control of other areas, often through employing hard power (economic and ...
of the 18th-century decisively shaped globalization in this period. After the
First First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and rec ...
and
Second Opium War The Second Opium War (), also known as the Second Anglo-Sino War, the Second China War, the Arrow War, or the Anglo-French expedition to China, was a colonial war lasting from 1856 to 1860, which pitted the British Empire and the French Emp ...
s (1839–1860) and the completion of the British conquest of India, vast populations of Asia became ready consumers of European exports. Also in this period, Europeans colonized areas of sub-Saharan Africa and the Pacific islands. The conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as
rubber Rubber, also called India rubber, latex, Amazonian rubber, ''caucho'', or ''caoutchouc'', as initially produced, consists of polymers of the organic compound isoprene, with minor impurities of other organic compounds. Thailand, Malaysia, and ...
,
diamonds Diamond is a solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the chemically stable form of carbon at room temperature and pressure, b ...
and
coal Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen. Coal is formed when dea ...
and helped fuel trade and investment between the European imperial powers, their colonies and the United States:
The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914.
In this period, the global financial system was mainly tied to the
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...
. The United Kingdom first formally adopted this standard in 1821. Soon to follow were
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
in 1853,
Newfoundland Newfoundland and Labrador (; french: Terre-Neuve-et-Labrador; frequently abbreviated as NL) is the easternmost province of Canada, in the country's Atlantic region. The province comprises the island of Newfoundland and the continental region ...
in 1865, the United States and Germany (''
de jure In law and government, ''de jure'' ( ; , "by law") describes practices that are legally recognized, regardless of whether the practice exists in reality. In contrast, ("in fact") describes situations that exist in reality, even if not legally ...
'') in 1873. New technologies, such as the
telegraph Telegraphy is the long-distance transmission of messages where the sender uses symbolic codes, known to the recipient, rather than a physical exchange of an object bearing the message. Thus flag semaphore is a method of telegraphy, whereas p ...
, the transatlantic cable, the
radiotelephone A radiotelephone (or radiophone), abbreviated RT, is a radio communication system for conducting a conversation; radiotelephony means telephony by radio. It is in contrast to '' radiotelegraphy'', which is radio transmission of telegrams (mes ...
, the
steamship A steamship, often referred to as a steamer, is a type of steam-powered vessel, typically ocean-faring and seaworthy, that is propelled by one or more steam engines that typically move (turn) propellers or paddlewheels. The first steamships ...
and
railway Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...
s allowed goods and information to move around the world to an unprecedented degree. In the period following the global depression of the 1930s, governments played an increasingly prominent role in the capitalistic system throughout much of the world. Contemporary capitalist societies developed in the West from 1950 to the present and this type of system continues to expand throughout different regions of the world—relevant examples started in the United States after the 1950s, France after the 1960s, Spain after the 1970s, Poland after 2015, and others. At this stage capitalist markets are considered developed and are characterized by developed private and public markets for equity and debt, a high
standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...
(as characterized by the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
and the
IMF The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
), large institutional investors and a well-funded
banking system A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...
. A significant
managerial class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. Comm ...
has emerged and decides on a significant proportion of investments and other decisions. A different future than that envisioned by Marx has started to emerge—explored and described by Anthony Crosland in the United Kingdom in his 1956 book ''
The Future of Socialism ''The Future of Socialism'' is a 1956 book by Anthony Crosland. It was one of the most influential books in post-war British Labour Party (UK), Labour Party thinking. It was the seminal work of the 'revisionist' school of Labour politics. The boo ...
'' and by John Kenneth Galbraith in North America in his 1958 book ''
The Affluent Society ''The Affluent Society'' is a 1958 (4th edition revised 1984) book by Harvard economist John Kenneth Galbraith. The book sought to clearly outline the manner in which the post–World War II United States was becoming wealthy in the private sec ...
'', 90 years after Marx's research on the state of capitalism in 1867. The postwar boom ended in the late 1960s and early 1970s and the economic situation grew worse with the rise of stagflation.
Monetarism Monetarism is a school of thought in monetary economics that emphasizes the role of governments in controlling the amount of money in circulation. Monetarist theory asserts that variations in the money supply have major influences on measures ...
, a modification of
Keynesianism Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and ...
that is more compatible with ''laissez-faire'' analyses, gained increasing prominence in the capitalist world, especially under the years in office of
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
in the United States (1981–1989) and of
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1975 to 1990. S ...
in the United Kingdom (1979–1990). Public and political interest began shifting away from the so-called collectivist concerns of Keynes's managed capitalism to a focus on individual choice, called "remarketized capitalism". The end of the
Cold War The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
and the
dissolution of the Soviet Union The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the Sov ...
allowed for capitalism to become a truly global system in a way not seen since before
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
. The development of the
neoliberal Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...
global economy would have been impossible without the fall of
communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a s ...
. Harvard Kennedy School economist Dani Rodrik distinguishes between three historical variants of capitalism: * Capitalism 1.0 during the 19th century entailed largely unregulated markets with a minimal role for the state (aside from national defense, and protecting property rights) * Capitalism 2.0 during the post-World War II years entailed Keynesianism, a substantial role for the state in regulating markets, and strong welfare states * Capitalism 2.1 entailed a combination of unregulated markets, globalization, and various national obligations by states


Relationship to democracy

The relationship between
democracy Democracy (From grc, δημοκρατία, dēmokratía, ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which the people have the authority to deliberate and decide legislation (" direct democracy"), or to choose gov ...
and capitalism is a contentious area in theory and in popular political movements. The extension of adult-male
suffrage Suffrage, political franchise, or simply franchise, is the right to vote in representative democracy, public, political elections and referendums (although the term is sometimes used for any right to vote). In some languages, and occasionally i ...
in 19th-century Britain occurred along with the development of industrial capitalism and representative democracy became widespread at the same time as capitalism, leading capitalists to posit a causal or mutual relationship between them. However, according to some authors in the 20th-century, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including
fascist Fascism is a far-right, Authoritarianism, authoritarian, ultranationalism, ultra-nationalist political Political ideology, ideology and Political movement, movement,: "extreme militaristic nationalism, contempt for electoral democracy and pol ...
regimes, absolute monarchies and single-party states.
Democratic peace theory The democratic peace theory posits that democracies are hesitant to engage in armed conflict with other identified democracies. Among proponents of the democratic peace theory, several factors are held as motivating peace between democratic st ...
asserts that democracies seldom fight other democracies, but critics of that theory suggest that this may be because of political similarity or stability rather than because they are "democratic" or "capitalist". Moderate critics argue that though economic growth under capitalism has led to democracy in the past, it may not do so in the future as
authoritarian Authoritarianism is a political system characterized by the rejection of political plurality, the use of strong central power to preserve the political ''status quo'', and reductions in the rule of law, separation of powers, and democratic votin ...
régimes have been able to manage economic growth using some of capitalism's competitive principles without making concessions to greater
political freedom Political freedom (also known as political autonomy or political agency) is a central concept in history and political thought and one of the most important features of democratic societies.Hannah Arendt, "What is Freedom?", ''Between Past and F ...
. Political scientists
Torben Iversen Torben Iversen is a Danish political economist, currently Harold Hitchings Burbank Professor of Political Economy at Harvard University. In 2016, he was named BP Centennial Professor at the London School of Economics The London School of Econom ...
and David Soskice see democracy and capitalism as mutually supportive.
Robert Dahl Robert Alan Dahl (; December 17, 1915 – February 5, 2014) was an American political theorist and Sterling Professor of Political Science at Yale University. He established the pluralist theory of democracy—in which political outcomes are ...
argued in ''On Democracy'' that capitalism was beneficial for democracy because economic growth and a large middle class were good for democracy. He also argued that a market economy provided a substitute for government control of the economy, which reduces the risks of tyranny and authoritarianism. In his book ''
The Road to Serfdom ''The Road to Serfdom'' ( German: ''Der Weg zur Knechtschaft'') is a book written between 1940 and 1943 by Austrian-British economist and philosopher Friedrich Hayek. Since its publication in 1944, ''The Road to Serfdom'' has been popular among ...
'' (1944),
Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...
(1899–1992) asserted that the free-market understanding of economic freedom as present in capitalism is a requisite of
political freedom Political freedom (also known as political autonomy or political agency) is a central concept in history and political thought and one of the most important features of democratic societies.Hannah Arendt, "What is Freedom?", ''Between Past and F ...
. He argued that the market mechanism is the only way of deciding what to produce and how to distribute the items without using coercion.
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
and
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
also promoted this view. Friedman claimed that centralized economic operations are always accompanied by
political repression Political repression is the act of a state entity controlling a citizenry by force for political reasons, particularly for the purpose of restricting or preventing the citizenry's ability to take part in the political life of a society, thereb ...
. In his view, transactions in a market economy are voluntary and that the wide diversity that voluntary activity permits is a fundamental threat to repressive
political leader A politician is a person active in party politics, or a person holding or seeking an elected office in government. Politicians propose, support, reject and create laws that govern the land and by an extension of its people. Broadly speaking, a ...
s and greatly diminishes their power to coerce. Some of Friedman's views were shared by
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
, who believed that capitalism was vital for freedom to survive and thrive.
Freedom House Freedom House is a non-profit, majority U.S. government funded organization in Washington, D.C., that conducts research and advocacy on democracy, political freedom, and human rights. Freedom House was founded in October 1941, and Wendell Wil ...
, an American
think-tank A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmental org ...
that conducts international research on, and advocates for, democracy, political freedom and
human rights Human rights are Morality, moral principles or Social norm, normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for ce ...
, has argued that "there is a high and statistically significant correlation between the level of political freedom as measured by Freedom House and economic freedom as measured by the Wall Street Journal/Heritage Foundation survey". In '' Capital in the Twenty-First Century'' (2013),
Thomas Piketty Thomas Piketty (; born 7 May 1971) is a French economist who is Professor of Economics at the School for Advanced Studies in the Social Sciences, Associate Chair at the Paris School of Economics and Centennial Professor of Economics in the Int ...
of the
Paris School of Economics The Paris School of Economics (PSE; French: ''École d'économie de Paris'') is a French research institute in the field of economics. It offers MPhil, MSc, and PhD level programmes in various fields of theoretical and applied economics, in ...
asserted that inequality is the inevitable consequence of economic growth in a capitalist economy and the resulting
concentration of wealth The distribution of wealth is a comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or economic heterogeneity. The distribution of wealth differs from the income distribution in that ...
can destabilize democratic societies and undermine the ideals of social justice upon which they are built. States with capitalistic economic systems have thrived under political regimes deemed to be authoritarian or oppressive. Singapore has a successful open market economy as a result of its competitive, business-friendly climate and robust rule of law. Nonetheless, it often comes under fire for its style of government which, though democratic and consistently one of the least corrupt, operates largely under a one-party rule. Furthermore, it does not vigorously defend freedom of expression as evidenced by its government-regulated press, and its penchant for upholding laws protecting ethnic and religious harmony, judicial dignity and personal reputation. The private (capitalist) sector in the People's Republic of China has grown exponentially and thrived since its inception, despite having an authoritarian government. Augusto Pinochet's rule in Chile led to economic growth and high levels of inequality by using authoritarian means to create a safe environment for investment and capitalism. Similarly,
Suharto Suharto (; ; 8 June 1921 – 27 January 2008) was an Indonesian army officer and politician, who served as the second and the longest serving president of Indonesia. Widely regarded as a military dictator by international observers, Suharto ...
's authoritarian reign and
extirpation Local extinction, also known as extirpation, refers to a species (or other taxon) of plant or animal that ceases to exist in a chosen geographic area of study, though it still exists elsewhere. Local extinctions are contrasted with global extinct ...
of the
Communist Party of Indonesia The Communist Party of Indonesia (Indonesian: ''Partai Komunis Indonesia'', PKI) was a communist party in Indonesia during the mid-20th century. It was the largest non-ruling communist party in the world before its violent disbandment in 1965. ...
allowed for the expansion of capitalism in
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
. The term "capitalism" in its modern sense is often attributed to
Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...
. In his ''
Das Kapital ''Das Kapital'', also known as ''Capital: A Critique of Political Economy'' or sometimes simply ''Capital'' (german: Das Kapital. Kritik der politischen Ökonomie, link=no, ; 1867–1883), is a foundational theoretical text in Historical mater ...
'', Marx analyzed the " capitalist mode of production" using a method of understanding today known as
Marxism Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...
. However, Marx himself rarely used the term "capitalism" while it was used twice in the more political interpretations of his work, primarily authored by his collaborator
Friedrich Engels Friedrich Engels ( ,"Engels"
'' rentier Rentier may refer to: * Rentier capitalism, economic practices of gaining profit by monopolizing access to property * Rentier state, a state which derives national revenues from the rent of indigenous resources * Operation Rentier, a German milita ...
and investor in reaction to the negative connotations associated with capitalism.


Characteristics

In general, capitalism as an economic system and mode of production can be summarized by the following: *
Capital accumulation Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form o ...
: production for profit and accumulation as the implicit purpose of all or most of production, constriction or elimination of production formerly carried out on a common social or private household basis. * Commodity production: production for exchange on a market; to maximize
exchange-value In political economy and especially Marxian economics, exchange value (German: ''Tauschwert'') refers to one of the four major attributes of a commodity, i.e., an item or service produced for, and sold on the market, the other three attributes be ...
instead of use-value. *
Private ownership Private property is a legal designation for the ownership of property by non-governmental Legal personality, legal entities. Private property is distinguishable from public property and Personal property, personal property, which is owned by a s ...
of the means of production: * High levels of
wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a ...
. * The
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
of money to make a profit. * The use of the
price mechanism In economics, a price mechanism is the manner in which the profits of goods or services affects the supply and demand of goods and services, principally by the price elasticity of demand. A price mechanism affects both buyer and seller who nego ...
to allocate resources between competing uses. * Economically efficient use of the factors of production and raw materials due to maximization of value added in the production process. * Freedom of capitalists to act in their self-interest in managing their business and investments.


Market

In
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
and ''
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
'' forms of capitalism, markets are used most extensively with minimal or no regulation over the pricing mechanism. In mixed economies, which are almost universal today, markets continue to play a dominant role, but they are regulated to some extent by the state in order to correct
market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where indiv ...
s, promote social welfare, conserve
natural resource Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. O ...
s, fund
defense Defense or defence may refer to: Tactical, martial, and political acts or groups * Defense (military), forces primarily intended for warfare * Civil defense, the organizing of civilians to deal with emergencies or enemy attacks * Defense industr ...
and public safety or other rationale. In state capitalist systems, markets are relied upon the least, with the state relying heavily on
state-owned enterprises A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governmen ...
or indirect economic planning to accumulate capital. Competition arises when more than one producer is trying to sell the same or similar products to the same buyers. Adherents of the capitalist theory believe that competition leads to innovation and more affordable prices. Monopolies or cartels can develop, especially if there is no competition. A monopoly occurs when a firm has exclusivity over a market. Hence, the firm can engage in
rent seeking Rent-seeking is the act of growing one's existing wealth without creating new wealth by manipulating the social or political environment. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effic ...
behaviors such as limiting output and raising prices because it has no fear of competition. A cartel is a group of firms that act together in a monopolistic manner to control output and prices. Governments have implemented legislation for the purpose of preventing the creation of monopolies and cartels. In 1890, the
Sherman Antitrust Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author. Th ...
became the first legislation passed by the United States Congress to limit monopolies.


Wage labor

Wage labor, usually referred to as paid work, paid employment, or paid labor, refers to the
socioeconomic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern societies progress, stagnate, or regress because of their local ...
relationship between a
worker The working class (or labouring class) comprises those engaged in manual labour, manual-labour occupations or industrial work, who are remunerated via wage, waged or salary, salaried contracts. Working-class occupations (see also "Designation ...
and an
employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
in which the worker sells their labor power under a formal or informal
employment contract An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old ...
.: "All labor contracts were/are designed legally to bind a worker in one way or another to fulfill the labor obligations the worker has undertaken. That is one of the principal purposes of labor contracts." These transactions usually occur in a labor market where
wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', ''prevailing wage'', and ''yearly bonuses,'' and remuner ...
s or
salaries A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. F ...
are market-determined. In exchange for the money paid as wages (usual for short-term work-contracts) or salaries (in permanent employment contracts), the work product generally becomes the undifferentiated property of the employer. A wage laborer is a person whose primary means of income is from the selling of their labor in this way.


Profit motive

The
profit motive In economics, the profit motive is the motivation of firms that operate so as to maximize their profits. Mainstream microeconomic theory posits that the ultimate goal of a business is "to make money" - not in the sense of increasing the firm's s ...
, in the theory of capitalism, is the desire to earn income in the form of profit. Stated differently, the reason for a business's existence is to turn a profit. The profit motive functions according to
rational choice theory Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postula ...
, or the theory that individuals tend to pursue what is in their own best interests. Accordingly, businesses seek to benefit themselves and/or their shareholders by maximizing profit. In capitalist theoretics, the profit motive is said to ensure that resources are being allocated efficiently. For instance, Austrian economist Henry Hazlitt explains: "If there is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself".


Private property

The relationship between the state, its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century.
Hernando de Soto Hernando de Soto (; ; 1500 – 21 May, 1542) was a Spanish explorer and '' conquistador'' who was involved in expeditions in Nicaragua and the Yucatan Peninsula. He played an important role in Francisco Pizarro's conquest of the Inca Empire ...
is a contemporary Peruvian economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in a formal property system where ownership and transactions are clearly recorded. According to de Soto, this is the process by which physical assets are transformed into capital, which in turn may be used in many more ways and much more efficiently in the market economy. A number of Marxian economists have argued that the Enclosure Acts in England and similar legislation elsewhere were an integral part of capitalist
primitive accumulation In Marxian economics and preceding theories,Perelman, p. 25 (ch. 2) the problem of primitive accumulation (also called previous accumulation, original accumulation) of capital concerns the origin of capital, and therefore of how class distinct ...
and that specific legal frameworks of private land ownership have been integral to the development of capitalism. Private property rights are not absolute, as in many countries the state has the power to seize private property, typically for public use, under the powers of
eminent domain Eminent domain (United States, Philippines), land acquisition (India, Malaysia, Singapore), compulsory purchase/acquisition (Australia, New Zealand, Ireland, United Kingdom), resumption (Hong Kong, Uganda), resumption/compulsory acquisition (Austr ...
.


Market competition

In capitalist economics, market competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share and sales volume by varying the elements of the marketing mix: price, product, distribution and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favourable terms". It was described by
Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...
in ''
The Wealth of Nations ''An Inquiry into the Nature and Causes of the Wealth of Nations'', generally referred to by its shortened title ''The Wealth of Nations'', is the ''magnum opus'' of the Scottish economist and moral philosopher Adam Smith. First published in 1 ...
'' (1776) and later economists as allocating productive
resource Resource refers to all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants. Resources can broadly be classified upon their ...
s to their most highly valued uses and encouraging
efficiency Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...
. Smith and other
classical economist Classical economics, classical political economy, or Smithian economics is a school of thought in political economy that flourished, primarily in Kingdom of Great Britain, Britain, in the late 18th and early-to-mid 19th century. Its main thinkers ...
s before Antoine Augustine Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium. Competition is widespread throughout the
market process Market is a term used to describe concepts such as: * Market (economics), system in which parties engage in transactions according to supply and demand * Market economy *Marketplace, a physical marketplace or public market Geography *Märket, a ...
. It is a condition where "buyers tend to compete with other buyers, and sellers tend to compete with other sellers". In offering goods for exchange, buyers competitively bid to purchase specific quantities of specific goods which are available, or might be available if sellers were to choose to offer such goods. Similarly, sellers bid against other sellers in offering goods on the market, competing for the attention and exchange resources of buyers. Competition results from scarcity, as it is not possible to satisfy all conceivable human wants, and occurs as people try to meet the criteria being used to determine allocation. In the works of Adam Smith, the idea of capitalism is made possible through competition which creates growth. Although capitalism has not entered mainstream economics at the time of Smith, it is vital to the construction of his ideal society. One of the foundational blocks of capitalism is competition. Smith believed that a prosperous society is one where "everyone should be free to enter and leave the market and change trades as often as he pleases." He believed that the freedom to act in one's self-interest is essential for the success of a capitalist society. The fear arises that if all participants focus on their own goals, society's well-being will be water under the bridge. Smith maintains that despite the concerns of intellectuals, "global trends will hardly be altered if they refrain from pursuing their personal ends." He insisted that the actions of a few participants cannot alter the course of society. Instead, Smith maintained that they should focus on personal progress instead and that this will result in overall growth to the whole. Competition between participants, "who are all endeavoring to justle one another out of employment, obliges every man to endeavor to execute his work" through competition towards growth.


Economic growth

Economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
is a characteristic tendency of capitalist economies.


As a mode of production

The capitalist mode of production refers to the systems of organising production and distribution within capitalist societies. Private money-making in various forms (renting, banking, merchant trade, production for profit and so on) preceded the development of the capitalist mode of production as such. The capitalist mode of production proper based on wage-labor and private ownership of the means of production and on industrial technology began to grow rapidly in Western Europe from the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
, later extending to most of the world. The term capitalist mode of production is defined by
private ownership Private property is a legal designation for the ownership of property by non-governmental Legal personality, legal entities. Private property is distinguishable from public property and Personal property, personal property, which is owned by a s ...
of the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...
, extraction of
surplus value In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cost ...
by the owning class for the purpose of
capital accumulation Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form o ...
, wage-based labor and, at least as far as
commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a comm ...
are concerned, being market-based. Capitalism in the form of money-making activity has existed in the shape of merchants and money-lenders who acted as intermediaries between consumers and producers engaging in
simple commodity production Simple commodity production (german: einfache Warenproduktion), also known as petty commodity production, is a term coined by Friedrich Engels to describe productive activities under the conditions of what Karl Marx had called the "simple exchange" ...
(hence the reference to "
merchant capitalism Some economic historians use the term merchant capitalism to refer to the earliest phase in the development of capitalism as an economic and social system. However, others argue that mercantilism, which has flourished widely in the world without ...
") since the beginnings of civilisation. What is specific about the "capitalist mode of production" is that most of the inputs and outputs of production are supplied through the market (i.e. they are commodities) and essentially all production is in this mode. By contrast, in flourishing feudalism most or all of the factors of production, including labor, are owned by the feudal ruling class outright and the products may also be consumed without a market of any kind, it is production for use within the feudal social unit and for limited trade. This has the important consequence that, under capitalism, the whole organisation of the production process is reshaped and re-organised to conform with economic rationality as bounded by capitalism, which is expressed in price relationships between inputs and outputs (wages, non-labor factor costs, sales and profits) rather than the larger rational context faced by society overall—that is, the whole process is organised and re-shaped in order to conform to "commercial logic". Essentially, capital accumulation comes to define economic rationality in capitalist production. A society, region or
nation A nation is a community of people formed on the basis of a combination of shared features such as language, history, ethnicity, culture and/or society. A nation is thus the collective identity of a group of people understood as defined by those ...
is capitalist if the predominant source of incomes and products being distributed is capitalist activity, but even so this does not yet mean necessarily that the capitalist mode of production is dominant in that society.


Role of government

Government agencies regulate the standards of service in many industries, such as airlines and broadcasting, as well as financing a wide range of programs. In addition, the government regulates the flow of capital and uses financial tools such as the interest rate to control such factors as inflation and unemployment.


Supply and demand

In capitalist economic structures, supply and demand is an economic model of
price determination Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acqui ...
in a
market Market is a term used to describe concepts such as: * Market (economics), system in which parties engage in transactions according to supply and demand * Market economy *Marketplace, a physical marketplace or public market Geography *Märket, a ...
. It postulates that in a
perfectly competitive market In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models whe ...
, the
unit price A product's average price is the result of dividing the product's total sales revenue by the total units sold. When one product is sold in variants, such as bottle sizes, managers must define "comparable" units. Average prices can be calculated b ...
for a particular good will vary until it settles at a point where the quantity demanded by consumers (at the current price) will equal the quantity supplied by producers (at the current price), resulting in an
economic equilibrium In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the ( equilibrium) values of economic variables will not change. For example, in the st ...
for price and
quantity Quantity or amount is a property that can exist as a Counting, multitude or Magnitude (mathematics), magnitude, which illustrate discontinuity (mathematics), discontinuity and continuum (theory), continuity. Quantities can be compared in terms o ...
. The "basic laws" of supply and demand, as described by David Besanko and Ronald Braeutigam, are the following four: # If demand increases (demand curve shifts to the right) and supply remains unchanged, then a shortage occurs, leading to a higher equilibrium price. # If demand decreases (demand curve shifts to the left) and supply remains unchanged, then a surplus occurs, leading to a lower equilibrium price. # If demand remains unchanged and supply increases (supply curve shifts to the right), then a surplus occurs, leading to a lower equilibrium price. # If demand remains unchanged and supply decreases (supply curve shifts to the left), then a shortage occurs, leading to a higher equilibrium price.


Supply schedule

A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied.


Demand schedule

A demand schedule, depicted graphically as the
demand curve In economics, a demand curve is a graph depicting the relationship between the price of a certain commodity (the ''y''-axis) and the quantity of that commodity that is demanded at that price (the ''x''-axis). Demand curves can be used either for ...
, represents the amount of some
goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not tran ...
that buyers are willing and able to purchase at various prices, assuming all determinants of demand other than the price of the good in question, such as income, tastes and preferences, the price of
substitute good In microeconomics, two goods are substitutes if the products could be used for the same purpose by the consumers. That is, a consumer perceives both goods as similar or comparable, so that having more of one good causes the consumer to desire less ...
s and the price of
complementary good In economics, a complementary good is a good whose appeal increases with the popularity of its complement. Technically, it displays a negative cross elasticity of demand and that demand for it increases when the price of another good decreases. I ...
s, remain the same. According to the
law of demand In microeconomics, the law of demand is a fundamental principle which states that there is an inverse relationship between price and quantity demanded. In other words, "conditional on all else being equal, as the price of a good increases (↑), q ...
, the demand curve is almost always represented as downward-sloping, meaning that as price decreases, consumers will buy more of the good.Note that unlike most
graphs Graph may refer to: Mathematics *Graph (discrete mathematics), a structure made of vertices and edges **Graph theory, the study of such graphs and their properties *Graph (topology), a topological space resembling a graph in the sense of discre ...
, supply & demand curves are plotted with the independent variable (price) on the vertical axis and the dependent variable (quantity supplied or demanded) on the horizontal axis.
Just like the supply curves reflect
marginal cost In economics, the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it r ...
curves, demand curves are determined by
marginal utility In economics, utility is the satisfaction or benefit derived by consuming a product. The marginal utility of a Goods (economics), good or Service (economics), service describes how much pleasure or satisfaction is gained by consumers as a result o ...
curves.


Equilibrium

In the context of supply and demand, economic equilibrium refers to a state where economic forces such as
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
are balanced and in the absence of external influences the ( equilibrium) values of economic variables will not change. For example, in the standard text-book model of
perfect competition In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In Economic model, theoret ...
equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium, in this case, refers to a condition where a market price is established through competition such that the amount of goods or services sought by
buyers Procurement is the method of discovering and agreeing to terms and purchasing goods, services, or other works from an external source, often with the use of a tendering or competitive bidding process. When a government agency buys goods or servi ...
is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or
market clearing In economics, market clearing is the process by which, in an economic market, the supply of whatever is traded is equated to the demand so that there is no excess supply or demand. The new classical economics assumes that in any given market, assum ...
price, and will tend not to change unless demand or supply changes. The quantity is called "competitive quantity" or market clearing quantity.


Partial equilibrium

Partial equilibrium, as the name suggests, takes into consideration only a part of the market to attain equilibrium. Jain proposes (attributed to George Stigler): "A partial equilibrium is one which is based on only a restricted range of data, a standard example is price of a single product, the prices of all other products being held fixed during the analysis".


History

According to Hamid S. Hosseini, the "power of supply and demand" was discussed to some extent by several early Muslim scholars, such as fourteenth-century
Mamluk Mamluk ( ar, مملوك, mamlūk (singular), , ''mamālīk'' (plural), translated as "one who is owned", meaning " slave", also transliterated as ''Mameluke'', ''mamluq'', ''mamluke'', ''mameluk'', ''mameluke'', ''mamaluke'', or ''marmeluke'') ...
scholar
Ibn Taymiyyah Ibn Taymiyyah (January 22, 1263 – September 26, 1328; ar, ابن تيمية), birth name Taqī ad-Dīn ʾAḥmad ibn ʿAbd al-Ḥalīm ibn ʿAbd al-Salām al-Numayrī al-Ḥarrānī ( ar, تقي الدين أحمد بن عبد الحليم ...
, who wrote: "If desire for goods increases while its availability decreases, its price rises. On the other hand, if availability of the good increases and the desire for it decreases, the price comes down". (citing Hamid S. Hosseini, 1995. "Understanding the Market Mechanism Before Adam Smith: Economic Thought in Medieval Islam," ''History of Political Economy'', Vol. 27, No. 3, 539–61).
John Locke John Locke (; 29 August 1632 – 28 October 1704) was an English philosopher and physician, widely regarded as one of the most influential of Age of Enlightenment, Enlightenment thinkers and commonly known as the "father of liberalism ...
's 1691 work ''Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money'' includes an early and clear description of supply and demand and their relationship. In this description, demand is
rent Rent may refer to: Economics *Renting, an agreement where a payment is made for the temporary use of a good, service or property *Economic rent, any payment in excess of the cost of production *Rent-seeking, attempting to increase one's share of e ...
: "The price of any commodity rises or falls by the proportion of the number of buyer and sellers" and "that which regulates the price...
f goods F, or f, is the sixth letter in the Latin alphabet, used in the modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is ''ef'' (pronounced ), and the plural is ''efs''. Hist ...
is nothing else but their quantity in proportion to their rent".
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British Political economy, political economist. He was one of the most influential of the Classical economics, classical economists along with Thomas Robert Malthus, Thomas Malthus, Ad ...
titled one chapter of his 1817 work ''
Principles of Political Economy and Taxation '' the Principles of Political Economy and Taxation'' (19 April 1817) is a book by David Ricardo on economics. The book concludes that land rent grows as population increases. It also presents the theory of comparative advantage, the theory that ...
'' "On the Influence of Demand and Supply on Price".Thomas M. Humphrey, 1992. "Marshallian Cross Diagrams and Their Uses before Alfred Marshall", ''Economic Review'', Mar/Apr, Federal Reserve Bank of Richmond, pp
3–23
.
In ''Principles of Political Economy and Taxation'', Ricardo more rigorously laid down the idea of the assumptions that were used to build his ideas of supply and demand. In his 1870 essay "On the Graphical Representation of Supply and Demand",
Fleeming Jenkin Henry Charles Fleeming Jenkin FRS FRSE LLD (; 25 March 1833 – 12 June 1885) was Regius Professor of Engineering at the University of Edinburgh, remarkable for his versatility. Known to the world as the inventor of the cable car or telphera ...
in the course of "introduc ngthe diagrammatic method into the English economic literature" published the first drawing of supply and demand curves therein, including comparative statics from a shift of supply or demand and application to the labor market. The model was further developed and popularized by
Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...
in the 1890 textbook '' Principles of Economics''.


Types

There are many variants of capitalism in existence that differ according to country and region. They vary in their institutional makeup and by their economic policies. The common features among all the different forms of capitalism is that they are predominantly based on the private ownership of the means of production and the production of goods and services for profit; the market-based allocation of resources; and the accumulation of capital. They include advanced capitalism, corporate capitalism, finance capitalism, free-market capitalism, mercantilism, social capitalism, state capitalism and welfare capitalism. Other variants of capitalism include
anarcho-capitalism Anarcho-capitalism (or, colloquially, ancap) is an anti-statist, libertarian, and anti-political philosophy and economic theory that seeks to abolish centralized states in favor of stateless societies with systems of private property enforce ...
,
community capitalism Community capitalism is an approach to capitalism that places a priority on the well-being and sustainability of the community as a whole. The community could be a metropolitan area, region, or an entire country. Overview In 1997, The American ...
,
humanistic capitalism Humanistic capitalism is a concept that seeks to unite humanism, specifically the safety and health needs of people and the environment, with market forces and a market-based economy. It is often seen as a middle ground between the ideas of mode ...
, neo-capitalism, state monopoly capitalism, and technocapitalism.


Advanced

Advanced capitalism is the situation that pertains to a society in which the
capitalist model Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...
has been integrated and developed deeply and extensively for a prolonged period. Various writers identify
Antonio Gramsci Antonio Francesco Gramsci ( , , ; 22 January 1891 – 27 April 1937) was an Italian Marxist philosopher, journalist, linguist, writer, and politician. He wrote on philosophy, political theory, sociology, history, and linguistics. He was a ...
as an influential early theorist of advanced capitalism, even if he did not use the term himself. In his writings, Gramsci sought to explain how capitalism had adapted to avoid the revolutionary overthrow that had seemed inevitable in the 19th century. At the heart of his explanation was the decline of raw coercion as a tool of class power, replaced by use of civil society institutions to manipulate public ideology in the capitalists' favour.
Jürgen Habermas Jürgen Habermas (, ; ; born 18 June 1929) is a German social theorist in the tradition of critical theory and pragmatism. His work addresses communicative rationality and the public sphere. Associated with the Frankfurt School, Habermas's wor ...
has been a major contributor to the analysis of advanced-capitalistic societies. Habermas observed four general features that characterise advanced capitalism: # Concentration of industrial activity in a few large firms. # Constant reliance on the state to stabilise the economic system. # A formally democratic government that legitimises the activities of the state and dissipates opposition to the system. # The use of nominal wage increases to pacify the most restless segments of the work force.


Corporate

Corporate capitalism is a free or mixed-market capitalist economy characterized by the dominance of hierarchical, bureaucratic corporations.


Finance

Finance capitalism is the subordination of processes of
production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...
to the accumulation of
money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...
profits in a
financial system A financial system is a system that allows the exchange of funds between financial market participants such as lenders, investors, and borrowers. Financial systems operate at national and global levels. Financial institutions consist of complex, c ...
. In their critique of capitalism,
Marxism Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...
and
Leninism Leninism is a political ideology developed by Russian Marxist revolutionary Vladimir Lenin that proposes the establishment of the Dictatorship of the proletariat#Vladimir Lenin, dictatorship of the proletariat led by a revolutionary Vanguardis ...
both emphasise the role of
finance capital Rudolf Hilferding (10 August 1877 – 11 February 1941) was an Austrian-born Marxist economist, socialist theorist,International Institute of Social History, ''Rodolf Hilferding Papers''. http://www.iisg.nl/archives/en/files/h/10751012.php pol ...
as the determining and
ruling-class In sociology, the ruling class of a society is the social class who set and decide the political and economic agenda of society. In Marxist philosophy, the ruling class are the capitalist social class who own the means of production and by exte ...
interest in capitalist society, particularly in the latter stages. Rudolf Hilferding is credited with first bringing the term finance capitalism into prominence through ''Finance Capital'', his 1910 study of the links between German trusts, banks and monopolies—a study subsumed by
Vladimir Lenin Vladimir Ilyich Ulyanov. ( 1870 – 21 January 1924), better known as Vladimir Lenin,. was a Russian revolutionary, politician, and political theorist. He served as the first and founding head of government of Soviet Russia from 1917 to 19 ...
into '' Imperialism, the Highest Stage of Capitalism'' (1917), his analysis of the imperialist relations of the great world powers. Lenin concluded that the banks at that time operated as "the chief nerve centres of the whole capitalist system of national economy". For the
Comintern The Communist International (Comintern), also known as the Third International, was a Soviet Union, Soviet-controlled international organization founded in 1919 that advocated world communism. The Comintern resolved at its Second Congress to ...
(founded in 1919), the phrase "dictatorship of finance capitalism" became a regular one. Fernand Braudel would later point to two earlier periods when finance capitalism had emerged in human history—with the Genoese in the 16th century and with the Dutch in the 17th and 18th centuries—although at those points it developed from commercial capitalism. Giovanni Arrighi extended Braudel's analysis to suggest that a predominance of finance capitalism is a recurring, long-term phenomenon, whenever a previous phase of commercial/industrial capitalist expansion reaches a plateau.


Free-market

A capitalist free-market economy is an economic system where prices for goods and services are set entirely by the forces of
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
and are expected, by its adherents, to reach their point of equilibrium without intervention by government policy. It typically entails support for highly
competitive markets In economics, competition is a scenario where different Economic agent, economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the sa ...
and
private ownership Private property is a legal designation for the ownership of property by non-governmental Legal personality, legal entities. Private property is distinguishable from public property and Personal property, personal property, which is owned by a s ...
of the
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...
. ''Laissez-faire'' capitalism is a more extensive form of this free-market economy, but one in which the role of the state is limited to protecting property rights. In anarcho-capitalist theory, property rights are protected by private firms and market-generated law. According to anarcho-capitalists, this entails property rights without statutory law through market-generated tort, contract and property law, and self-sustaining private industry. Fernand Braudel argued that free market exchange and capitalism are to some degree opposed; free market exchange involves transparent public transactions and a large number of equal competitors, while capitalism involves a small number of participants using their capital to control the market via private transactions, control of information, and limitation of competition.


Mercantile

Mercantilism is a nationalist form of early capitalism that came into existence approximately in the late 16th century. It is characterized by the intertwining of national business interests with state-interest and imperialism. Consequently, the state apparatus is used to advance national business interests abroad. An example of this is colonists living in America who were only allowed to trade with and purchase goods from their respective mother countries (e.g. Britain, France and Portugal). Mercantilism was driven by the belief that the wealth of a nation is increased through a positive balance of trade with other nations—it corresponds to the phase of capitalist development sometimes called the
primitive accumulation of capital In Marxian economics and preceding theories,Perelman, p. 25 (ch. 2) the problem of primitive accumulation (also called previous accumulation, original accumulation) of capital concerns the origin of capital, and therefore of how class distinctio ...
.


Social

A social market economy is a free-market or mixed-market capitalist system, sometimes classified as a
coordinated market economy A regulated market (RM) or coordinated market is an idealized system where the government or other organizations oversee the market, control the forces of supply and demand, and to some extent regulate the market actions. This can include tasks s ...
, where government intervention in price formation is kept to a minimum, but the state provides significant services in areas such as social security, health care, unemployment benefits and the recognition of
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influen ...
through national
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The i ...
arrangements. This model is prominent in Western and Northern European countries as well as Japan, albeit in slightly different configurations. The vast majority of enterprises are privately owned in this economic model.
Rhine capitalism The social market economy (SOME; german: soziale Marktwirtschaft), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, is a socioeconomic model combining a free-market capitalist economic system alon ...
is the contemporary model of capitalism and adaptation of the social market model that exists in continental Western Europe today.


State

State capitalism is a capitalist market economy dominated by state-owned enterprises, where the state enterprises are organized as commercial, profit-seeking businesses. The designation has been used broadly throughout the 20th century to designate a number of different economic forms, ranging from state-ownership in market economies to the command economies of the former
Eastern Bloc The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
. According to Aldo Musacchio, a professor at Harvard Business School, state capitalism is a system in which governments, whether democratic or autocratic, exercise a widespread influence on the economy either through direct ownership or various subsidies. Musacchio notes a number of differences between today's state capitalism and its predecessors. In his opinion, gone are the days when governments appointed bureaucrats to run companies: the world's largest state-owned enterprises are now traded on the public markets and kept in good health by large institutional investors. Contemporary state capitalism is associated with the
East Asian model of capitalism The East Asian model pioneered by Japan, is a plan for economic growth whereby the government invests in certain sectors of the economy in order to stimulate the growth of specific industries in the private sector. It generally refers to the mo ...
,
dirigisme Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role contrary to a merely regulatory interventionist role over a market economy. As an economic doctrine, dirigisme is the opposite of ''lai ...
and the economy of Norway. Alternatively,
Merriam-Webster Merriam-Webster, Inc. is an American company that publishes reference books and is especially known for its dictionaries. It is the oldest dictionary publisher in the United States. In 1831, George and Charles Merriam founded the company as ...
defines state capitalism as "an economic system in which private capitalism is modified by a varying degree of government ownership and control". In ''Socialism: Utopian and Scientific'',
Friedrich Engels Friedrich Engels ( ,"Engels"
'' bourgeois state The capitalist state is the state, its functions and the form of organization it takes within capitalist socioeconomic systems.Jessop, Bob (January 1977). "Recent Theories of the Capitalist State". ''Soviet Studies''. 1: 4. pp. 353–373. This ...
. In his writings,
Vladimir Lenin Vladimir Ilyich Ulyanov. ( 1870 – 21 January 1924), better known as Vladimir Lenin,. was a Russian revolutionary, politician, and political theorist. He served as the first and founding head of government of Soviet Russia from 1917 to 19 ...
characterized the economy of Soviet Russia as state capitalist, believing state capitalism to be an early step toward the development of socialism. Some economists and left-wing academics including
Richard D. Wolff Richard David Wolff (born April 1, 1942) is an American Marxian economist known for his work on economic methodology and class analysis. He is professor emeritus of economics at the University of Massachusetts Amherst and a visiting professor ...
and
Noam Chomsky Avram Noam Chomsky (born December 7, 1928) is an American public intellectual: a linguist, philosopher, cognitive scientist, historian, social critic, and political activist. Sometimes called "the father of modern linguistics", Chomsky is ...
, as well as many Marxist philosophers and revolutionaries such as Raya Dunayevskaya and
C.L.R. James Cyril Lionel Robert James (4 January 1901 – 31 May 1989),Fraser, C. Gerald, ''The New York Times'', 2 June 1989. who sometimes wrote under the pen-name J. R. Johnson, was a Trinidadian historian, journalist and Marxist. His works are in ...
, argue that the economies of the former
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
and Eastern Bloc represented a form of state capitalism because their internal organization within enterprises and the system of wage labor remained intact. The term is not used by
Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian school ...
economists to describe state ownership of the means of production. The economist
Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and Sociology, sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberali ...
argued that the designation of state capitalism was a new label for the old labels of state socialism and planned economy and differed only in non-essentials from these earlier designations. The debate between proponents of private versus state capitalism is centered around questions of managerial efficacy, productive efficiency and fair distribution of wealth.


Welfare

Welfare capitalism is capitalism that includes social welfare policies. Today, welfare capitalism is most often associated with the models of capitalism found in Central Mainland and Northern Europe such as the
Nordic model The Nordic model comprises the economic and social policies as well as typical cultural practices common to the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden). This includes a comprehensive welfare state and multi-level coll ...
, social market economy and
Rhine capitalism The social market economy (SOME; german: soziale Marktwirtschaft), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, is a socioeconomic model combining a free-market capitalist economic system alon ...
. In some cases, welfare capitalism exists within a mixed economy, but welfare states can and do exist independently of policies common to mixed economies such as
state interventionism Economic interventionism, sometimes also called state interventionism, is an economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare o ...
and extensive regulation. A mixed economy is a largely market-based capitalist economy consisting of both private and public ownership of the means of production and
economic interventionism Economic interventionism, sometimes also called state interventionism, is an economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare of ...
through macroeconomic policies intended to correct
market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where indiv ...
s, reduce unemployment and keep inflation low. The degree of intervention in markets varies among different countries. Some mixed economies such as France under
dirigisme Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role contrary to a merely regulatory interventionist role over a market economy. As an economic doctrine, dirigisme is the opposite of ''lai ...
also featured a degree of indirect economic planning over a largely capitalist-based economy. Most modern capitalist economies are defined as mixed economies to some degree.


Eco-capitalism

Eco-capitalism, also known as "environmental capitalism" or (sometimes) "green capitalism", is the view that
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
exists in nature as " natural capital" (
ecosystem An ecosystem (or ecological system) consists of all the organisms and the physical environment with which they interact. These biotic and abiotic components are linked together through nutrient cycles and energy flows. Energy enters the syste ...
s that have ecological yield) on which all
wealth Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...
depends. Therefore, governments should use market-based policy-instruments (such as a carbon tax) to resolve
environmental problem Environmental issues are Human impact on the environment, effects of human activity on the biophysical environment, Climate change, most often of which are harmful effects that cause environmental degradation. Environmental protection is the prac ...
s. The term "Blue Greens" is often applied to those who espouse eco-capitalism. Eco-capitalism can be thought of as the right-wing equivalent to Red Greens.


Sustainable capitalism

Sustainable capitalism Sustainable capitalism is a conceptual form of capitalism based upon sustainable practices that seek to preserve humanity and the planet, while reducing externalities and bearing a resemblance of capitalist economic policy. A capitalistic economy ...
is a conceptual form of capitalism based upon
sustainable Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livin ...
practices that seek to preserve humanity and the planet, while reducing
externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...
and bearing a resemblance of capitalist
economic policy The economy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, national ownership, and many other areas of government interventions into the e ...
. A capitalistic economy must expand to survive and find new markets to support this expansion. Capitalist systems are often destructive to the environment as well as certain individuals without access to proper representation. However, sustainability provides quite the opposite; it implies not only a continuation, but a replenishing of resources. Sustainability is often thought of to be related to
environmentalism Environmentalism or environmental rights is a broad philosophy, ideology, and social movement regarding concerns for environmental protection and improvement of the health of the environment, particularly as the measure for this health seek ...
, and sustainable capitalism applies sustainable principles to economic governance and social aspects of capitalism as well. The importance of sustainable capitalism has been more recently recognized, but the concept is not new. Changes to the current economic model would have heavy social environmental and economic implications and require the efforts of individuals, as well as compliance of local, state and federal governments. Controversy surrounds the concept as it requires an increase in sustainable practices and a marked decrease in current consumptive behaviors. This is a concept of capitalism described in
Al Gore Albert Arnold Gore Jr. (born March 31, 1948) is an American politician, businessman, and environmentalist who served as the 45th vice president of the United States from 1993 to 2001 under President Bill Clinton. Gore was the Democratic Part ...
and
David Blood This is a list of recurring characters in the British teen drama '' Skins''. It does not include the main characters of the show, who can be found at List of ''Skins'' characters. Supporting characters First generation *Effy Stonem (Kaya Scodel ...
’s manifesto for the
Generation Investment Management Generation Investment Management LLP (Generation IM) is a financial services and investment management firm founded in 2004. It was co-founded by former US Vice President Al Gore and Goldman Sachs' Asset Management head David Blood, with a stated ...
to describe a long-term political, economic and social structure which would mitigate current threats to the planet and society. According to their manifesto, sustainable capitalism would integrate the environmental, social and governance (
ESG ESG may refer to : Groups * Election Support Group, an internationally sponsored organization analyzing and supporting the electoral process in Pakistan * ES Guelma, an Algerian football club based in Guelma * Escuela Superior de Guerra (Argenti ...
) aspects into risk assessment in attempt to limit externalities. Most of the ideas they list are related to economic changes, and social aspects, but strikingly few are explicitly related to any environmental policy change.


Capital accumulation

The accumulation of capital is the process of "making money", or growing an initial sum of money through investment in production. Capitalism is based on the accumulation of capital, whereby
financial capital Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide ...
is invested in order to make a profit and then reinvested into further production in a continuous process of accumulation. In Marxian economic theory, this dynamic is called the
law of value The law of the value of commodities (German: ''Wertgesetz der Waren''), known simply as the law of value, is a central concept in Karl Marx's critique of political economy first expounded in his polemic ''The Poverty of Philosophy'' (1847) against ...
. Capital accumulation forms the basis of capitalism, where economic activity is structured around the accumulation of
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
, defined as investment in order to realize a financial profit. In this context, "capital" is defined as money or a financial asset invested for the purpose of making more money (whether in the form of profit, rent, interest, royalties, capital gain or some other kind of return). In mainstream
economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...
,
accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...
and
Marxian economics Marxian economics, or the Marxian school of economics, is a Heterodox economics, heterodox school of political economic thought. Its foundations can be traced back to Karl Marx, Karl Marx's Critique of political economy#Marx's critique of politic ...
, capital accumulation is often equated with
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
of profit income or savings, especially in real capital goods. The concentration and centralisation of capital are two of the results of such accumulation. In modern
macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...
and
econometrics Econometrics is the application of Statistics, statistical methods to economic data in order to give Empirical evidence, empirical content to economic relationships.M. Hashem Pesaran (1987). "Econometrics," ''The New Palgrave: A Dictionary of ...
, the phrase " capital formation" is often used in preference to "accumulation", though the
United Nations Conference on Trade and Development The United Nations Conference on Trade and Development (UNCTAD) is an intergovernmental organization within the United Nations Secretariat that promotes the interests of developing countries in world trade. It was established in 1964 by the ...
(UNCTAD) refers nowadays to "accumulation". The term "accumulation" is occasionally used in national accounts.


Wage labor

Wage labor refers to the sale of labor under a formal or informal
employment contract An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old ...
to an
employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
. These transactions usually occur in a labor market where
wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', ''prevailing wage'', and ''yearly bonuses,'' and remuner ...
s are market determined. Individuals who possess and supply financial capital to productive ventures often become owners, either jointly (as
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
s) or individually. In Marxist economics, these owners of the means of production and suppliers of capital are generally called capitalists. The description of the role of the capitalist has shifted, first referring to a useless intermediary between producers, then to an employer of producers, and finally to the owners of the means of production. Labor includes all physical and mental human resources, including entrepreneurial capacity and management skills, which are required to produce products and services.
Production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...
is the act of making goods or services by applying labor power.


Criticism

Criticism of capitalism comes from various political and philosophical approaches, including
anarchist Anarchism is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not neces ...
,
socialist Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...
, religious and
nationalist Nationalism is an idea and movement that holds that the nation should be congruent with the state. As a movement, nationalism tends to promote the interests of a particular nation (as in a group of people), Smith, Anthony. ''Nationalism: The ...
viewpoints. Of those who oppose it or want to modify it, some believe that capitalism should be removed through revolution while others believe that it should be changed slowly through political reforms. Prominent critiques of capitalism allege that it is inherently
exploitative The exploitation of natural resources is the use of natural resources for economic growth, sometimes with a negative connotation of accompanying environmental degradation. It started to emerge on an industrial scale in the 19th century as the ext ...
, alienating, unstable,
unsustainable Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livin ...
, and economically inefficient—and that it creates massive
economic inequality There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of we ...
, commodifies people, degrades the environment, is anti-democratic, and leads to an erosion of
human rights Human rights are Morality, moral principles or Social norm, normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for ce ...
because of its incentivization of
imperialist Imperialism is the state policy, practice, or advocacy of extending power and dominion, especially by direct territorial acquisition or by gaining political and economic control of other areas, often through employing hard power (economic and ...
expansion and war.Lenin’s Selected Works, Progress Publishers, 1963, Moscow, Volume 1, pp. 667–766


See also

*
Anti-capitalism Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as s ...
*
Advanced capitalism In political philosophy, particularly Frankfurt School critical theory, advanced capitalism is the situation that pertains in a society in which the capitalist model has been integrated and developed deeply and extensively and for a prolonged p ...
* Ancient economic thought *
Bailout Capitalism A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy. A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global syst ...
*
Capitalism (disambiguation) Capitalism is an economic and social system in which the means of production are privately controlled. Capitalism may also refer to: * Economic liberalism, a system in which economic decisions are made by individuals or households rather than by ...
*
Christian views on poverty and wealth There have been a variety of Christian views on poverty and wealth. At one end of the spectrum is a view which casts wealth and materialism as an evil to be avoided and even combated. At the other end is a view which casts prosperity and well-b ...
*
Communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a s ...
* Corporatocracy *
Crony capitalism Crony capitalism, sometimes called cronyism, is an economic system in which businesses thrive not as a result of free enterprise, but rather as a return on money amassed through collusion between a business class and the political class. This is ...
* Economic sociology *
Free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
* Global financial crisis in September 2008 * Humanistic economics *
Invisible hand The invisible hand is a metaphor used by the British moral philosopher Adam Smith that describes the unintended greater social benefits and public good brought about by individuals acting in their own self-interests. Smith originally mention ...
* Late capitalism * ''
Le Livre noir du capitalisme __NOTOC__ ''Le livre noir du Capitalisme'' (''The Black Book of Capitalism'') is a 1998 French book published in reaction to ''The Black Book of Communism'' (1997). Unlike the earlier work, ''Le livre noir du capitalismes primary goal is not to t ...
'' *
Market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...
*
Perspectives on capitalism by school of thought Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought. Overview Adam Smith was one of the first influential writers on the topic with his book ''The Wealth of Nations'', which is g ...
* Post-capitalism * Post-Fordism *
Racial capitalism Racial capitalism is a concept reframing the history of capitalism as grounded in the extraction of social and economic value from people of marginalized racial identities, typically from Black people. It was described by Cedric J. Robinson in h ...
* Rent-seeking * State monopoly capitalism * Surveillance capitalism *
Perestroika ''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...


References

; Notes ; Bibliography * * * * * * * * * * * * * Krahn, Harvey J., and Graham S. Lowe (1993). ''Work, Industry, and Canadian Society''. Second ed. Scarborough, Ont.: Nelson Canada. xii, 430 p. * * * * * * * * * * * * *


Further reading

* Alperovitz, Gar (2011). ''America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy, 2nd Edition.'' Democracy Collaborative Press. . * * Ascher, Ivan. ''Portfolio Society: On the Capitalist Mode of Prediction.'' Zone Books, 2016. * Baptist, Edward E. ''The Half Has Never Been Told: Slavery and the Making of American Capitalism.'' New York,
Basic Books Basic Books is a book publisher founded in 1950 and located in New York, now an imprint of Hachette Book Group. It publishes books in the fields of psychology, philosophy, economics, science, politics, sociology, current affairs, and history. H ...
, 2014. . * * * * Braudel, Fernand. ''Civilization and Capitalism''. * Callinicos, Alex. "Wage Labour and State Capitalism – A reply to Peter Binns and Mike Haynes", ''International Socialism'', second series, 12, Spring 1979. * * Farl, Erich. "The Genealogy of State Capitalism". In: ''International'' London, vol. 2, no. 1, 1973. * * Gough, Ian.
State Expenditure in Advanced Capitalism
'' New Left Review. * Habermas, J. 973'' Legitimation Crisis'' (eng. translation by T. McCarthy). Boston, Beacon
From Google books


* * Hyman, Louis and Edward E. Baptist (2014). ''American Capitalism: A Reader.'' Simon & Schuster. . * * * * Jameson, Fredric (1991). '' Postmodernism, or, the Cultural Logic of Late Capitalism''. * Kotler, Philip (2015). ''Confronting Capitalism: Real Solutions for a Troubled Economic System.'' AMACOM. * Mandel, Ernest (1999). ''Late Capitalism.'' * * Marcel van der Linden, ''Western Marxism and the Soviet Union''. New York, Brill Publishers, 2007. * Mayfield, Anthony. "Economics", in his ''On the Brink: Resource Depletion, Debt Collapse, and Super-technology'' ( ancouver, B.C., Canada On the Brink Publishing, 2013), pp. 50–104. * * * Panitch, Leo, and Sam Gindin (2012). ''The Making of Global Capitalism: the Political Economy of American Empire''. London, Verso. . * * * Polanyi, Karl (2001). '' The Great Transformation: The Political and Economic Origins of Our Time.''
Beacon Press Beacon Press is an American left-wing non-profit book publisher. Founded in 1854 by the American Unitarian Association, it is currently a department of the Unitarian Universalist Association. It is known for publishing authors such as James B ...
; 2nd ed. * * Richards, Jay W. (2009). ''Money, Greed, and God: Why Capitalism is the Solution and Not the Problem''. New York: HarperOne. * Roberts, Paul Craig (2013). ''The Failure of Laissez-faire Capitalism: towards a New Economics for a Full World''. Atlanta, Ga.: Clarity Press. * Robinson, William I. ''Global Capitalism and the Crisis of Humanity.'' Cambridge University Press, 2014. * * Hoevet, Ocean
"Capital as a Social Relation"
(New Palgrave article) * Sombart, Werner (1916) ''Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart.'' Final edn. 1916, repr. 1969, paperback edn. (3 vols. in 6): 1987 Munich: dtv. (Also in Spanish; no English translation yet.) * * *


External links

*
Capitalism
at ''
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'' Online.
Selected Titles on Capitalism and Its Discontents
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