Maarten Maartensz:    Philosophical Dictionary | Filosofisch Woordenboek                      

 C - Capitalism


Capitalism: Society in which the economy is based on the private initiative of individual entrepreneurs or limited companies, and where the prices of goods are determined by the forces of the - supposedly free - market.

It is noteworthy that pure capitalism, if it ever existed, is a thing of the 19th Century, at least in Western Europe (!), and that since then the state interfered in economical relations to protect the currency; the free market, if it existed; the entrepreneurial class; the wages of the working class; the subsidies of art, and much more.

It is also noteworthy that as soon as the state gets very powerful and radically limits a free market in such a way that there is no real chance for enterprising individuals to become rich by their own efforts through production of goods or through buying and selling, that very often the welfare of the country declines while state terrorism and the wealth and power of a small percentage of state servants radically increase.

Thus there is at least good statistical evidence for the combination of democracy and capitalism: Where there are mostly free elections, there typically is mostly free trade; and conversely.

And what idealists like the marxists or anarchists almost completely missed, or desired to close their eyes for, is that while individual capitalists may try to mercilessly exploit their labourers, human beings are on average such that individuals in state organs do so as mercilessly, and with much more power, and much less control.

Furthermore, while it is true that early capitalism was quite inhuman in its effects, it is also true that much of the inhumanity of capitalism was tamed - in time, after two or three generations - by fair legislation, that prohibited exploitation and guaranteed a fair or at least a living wage for most workers.

However... the evils that capitalism may do were tamed, to some extent, only in such countries where (1) there are independent courts and (2) free speech, free press, and human rights. See: State.


See also: Anarchism, Communism, Economy, Egoism, Liberalism, Marxism, Self-interest, Socialism


Aristotle, Hayek, Marx, Mill, Keynes, Robinson, Samuelson

 Original: Dec 12, 2004                                                Last edited: 12 December 2011.   Top