Concept

Capitalism

Overview

Capitalism is an economic system based on the private ownership of the means of production and its use for the purpose of obtaining profit. This socioeconomic system has developed historically in several stages and is defined by a number of constituent elements: private property, profit motive, capital accumulation, competitive markets, commodification, wage labor, and an emphasis on innovation and economic growth. Capitalist economies may experience business cycles of economic expansion followed by recessions.

Economists, historians, 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 capitalism, free-market capitalism, state capitalism, and welfare capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, barriers to free competition, and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism. The extent to which markets are free and the rules defining private property are matters of politics and policy. Most of the existing economies in the world today are mixed economies that combine elements of free markets with state intervention and, in some cases, economic planning.

Capitalism in its modern form emerged from agrarianism in England, as well as from mercantilist practices in European countries between the 16th and 18th centuries. The Industrial Revolution of the 18th century established capitalism as a dominant mode of production characterized by factory work and a complex division of labor. Through globalization, capitalism spread across the world in the 19th and 20th centuries, especially before World War I and again after the end of the Cold War. During the 19th century, capitalism was largely unregulated by the state but became more regulated in the post–World War II period through Keynesianism, followed by a return of more unregulated capitalism termed neoliberalism starting in the 1980s.

Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).

In the original texts

Passages from public-domain books where Capitalism is discussed.

The Press is the second great factor to which critics of capitalism point when they wish to prove that capitalism is the source of modern war. Since the running of a big newspaper requires a large capital, the proprietors of important organs necessarily belong to the capitalist class, and it will be a rare and exceptional event if they do not sympathize with…
Bertrand Russell, Proposed Roads to Freedom
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With the constantly diminishing numbers of capitalist magnates who usurp and monopolise all the advantages of this process of transformation, grows the mass of misery, pressure, slavery, degradation and robbery but there grows also revolt and the constant progress in union and organisation of the working class brought about through the mechanism of the capitalistic process of production. Capitalism becomes an…
Friedrich Engels, Landmarks of Scientific Socialism
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The guilds were so organized that the journeyman of to-day became the master of to-morrow. But all this changed, as soon as the means of production became socialized and concentrated in the hands of capitalists. The means of production, as well as the product of the individual producer became more and more worthless; there was nothing left for him but to turn wage-worker under the capitalist. Wage-labor, aforetime…
Friedrich Engels, Socialism, Utopian and Scientific
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The distinction, then, between Capital and Not-capital, does not lie in the kind of commodities, but in the mind of the capitalist—in his will to employ them for one purpose rather than another; and all property, however ill adapted in itself for the use of laborers, is a part of capital, so soon as it, or the value to be received from it, is set apart for productive reinvestment.
John Stuart Mill, Principles of Political Economy
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The wages of those labourers were paid by a capitalist, and that capitalist must have the same profit upon his advances as any other capitalist; when, therefore, he sells the tools or materials, he must receive from the purchaser not only the reimbursement of the wages he has paid, but also as much more as will afford him the ordinary rate of profit. And when the producer, after buying the tools and employing them…
John Stuart Mill, Essays on some unsettled Questions of Political Economy
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Capitalism

Overview

In the original texts

Philosophers who discussed Capitalism

Related ideas

Opposing perspectives

Place in the tradition