What is Capitalism?
As with many widely used words, "capitalism"
seems to carry a concrete meaning, but in practice is used to express a
variety of vague and inconsistent ideas. Although it is supposed to describe
an economic system, "capitalism" is often used in ways that convey
strong political and moral implications. The word can elicit extremely positive
and negative connotations in different people.
Some common conceptions of capitalism include:
- Free market and the drive
to make profit by buying and selling. Capitalism is set in opposition to
feudalism, socialism or other social arrangements that try to limit the
market. By analogy, the free market is often linked to democracy, the promotion
of individual freedom, and the protection of private property.
- Industrialization and mass
production. The emergence of large factories, the concentration of wealth
in the hands of those who control these factories, and the creation of
a working class.
- Consumer society in which
are relations with other people are mediated through money. Our status
and values is shaped by advertising, accumulation, brand names, and ability
to find and negotiate good deals. "Consumer choice" is praised
as an ideal (much like democracy), although consumer society is also described
in negative terms, as a loss of spiritual values and individuality.
In this class, I will refer to capitalism in two ways (neither
of which is entirely exclusive of the other):
- Commercial capitalism: Investment
of money into large batches of goods in order to make a profit on the market.
This can include contracting and giving advances to independent producers
or small workshops, arranging trasportation, and a variety of complex credit
and partnership arrangements. This form of capitalism has existed throughout
history, with different levels of state involvement and social approval.
- Industrial capitalism: Investment
of money into the means of production, such as factories, plantation land,
or a wage labor force. This may also expand into the control of raw material
sources and distribution, in attempts to manage the market more efficiently.
It often requires the development of complex management structures. Slave
plantations could be seen as a form of industrial capitalism, although
industrial capitalism did not become prominent throughout the world until
the 19th century.
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