Capitalism information and comparisons
| Philosophy: | Capital (or the "means of production") is owned, operated, and traded in order to generate profits for private owners or shareholders. Emphasis on individual profit rather than on workers or society as a whole. No restriction on who may own capital. |
| Definition: | A theory or system of social organization based around a free market and privatization in which ownership is ascribed to the individual persons. Voluntary co-ownership is also permitted. |
| Ideas: | Laissez-faire means to "let it be"; opposed to government intervention in economics because capitalists believe it introduces inefficiencies. A free market produces the best economic outcome for society. Government should not pick winners and losers. |
| Key Proponents: | Richard Cantillon, Adam Smith, David Ricardo, Frédéric Bastiat, Ludwig von Mises, Fredrich A. Hayek, Murray N. Rothbard, Ayn Rand, Milton Friedman. |
| Key Elements: | Competition for ownership of capital drives economic activity & creates a price system that determines resource allocation; profits are reinvested in the economy. "Production for profit": useful goods and services are a byproduct of pursuing profit. |
| Economic System: | Market-based economy combined with private or corporate ownership of the means of production. Goods and services are produced to make a profit, and this profit is reinvested into the economy to fuel economic growth. |
| Political System: | Can coexist with a variety of political systems, including dictatorship, democratic republic, anarchism, and direct democracy. Most capitalists advocate a democratic republic. |
| Social Structure: | Classes exist based on their relationship to capital: the capitalists own shares of the means of production and derive their income in that way while the working class is dependent on wages or salaries. Large degree of mobility between the classes. |
| Religion: | Freedom of religion. |
| Free Choice: | All individuals make decisions for themselves. People will make the best decisions because they must live with the consequences of their actions. Freedom of choice allows consumers to drive the economy. |
| View of war: | War, although good for select industries, is bad for the economy as a whole. It wastefully diverts resources away from producing that which would raise consumers' standard of living (i.e., that which is demanded by consumers), toward destruction. |
| Examples: | The modern world economy operates largely according to the principles of capitalism. The UK, US, and Hong Kong are mostly capitalist. Singapore is an example of state capitalism. |
| Discrimination: | Government does not discriminate based on race, color, or other arbitrary classification. Under state capitalism (unlike free-market capitalism), government may have policies that, intentionally or not, favor the capitalist class over workers. |
| Political Movements: | Classical liberalism, social liberalism, libertarianism, neo-liberalism, modern social-democracy, and anarcho-capitalism. |
| Private Property: | Private property in capital and other goods is the dominant form of property. Public property and state property play a secondary role, and there might also be some collective property in the economy. |
| Variations: | Free-market capitalism (also known as laissez-faire capitalism), state capitalism (also known as neo-mercantilism). |
| Economic Coordination: | Relies principally on markets to determine investment, production, and distribution decisions. Markets may be free-markets, regulated-markets, or may be combined with a degree of state-directed economic planning or planning within private companies. |
| Ownership Structure: | The means of production are privately-owned and operated for a private profit. This drives incentives for producers to engage in economic activity. Firms can be owned by individuals, worker co-ops, or shareholders. |
| Way of Change: | Fast change within the system. In theory, consumer demand is what drives production choices. Government can change the rules of conduct and/or business practices through regulation or ease of regulations. |
| Means of control: | Capitalism promotes a "society of contract" as opposed to a "society of status." Production decisions are driven by consumer demand and resource allocation is driven by a price system arising from competition for profit. |
| Earliest Remnants: | The ideas of trade, buying, selling, and such have been around since civilization. Free-market, or lasseiz-faire capitalism was brought to the world during the 18th century by John Locke and Adam Smith, aiming for an alternative to feudalism. |
| View of the world: | Capitalists see capitalistic and market-based societies as beacons of freedom, priding themselves on permitting social and economic freedoms not experienced under Communism and Fascism. The focus is on individualism as opposed to nationalism. |
| Famous Examples: | Richard Cobden and John Bright (Anti-Corn Law League), Friedrich Hayek and Milton Friedman (Mont Pelerin Society), Leonard Read (Foundation for Economc Education), Murray N. Rothbard (Ludwig von Mises Institute). |