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{{Short description|Economic system based on private ownership}}
{{About|an economic system}}
{{Redirect|Capitalist|other uses|Capitalist (disambiguation)}}
{{Pp-pc|small=yes}}
{{Use American English|date=January 2014}}
{{Use dmy dates|date=June 2020}}
{{Capitalism sidebar}}
{{Economic systems sidebar|expanded=by ideology}}
{{Liberalism sidebar|related}}
'''Capitalism''' is an [[economic system]] based on the private ownership of the [[means of production]] and their use for the purpose of obtaining [[Profit (economics)|profit]].<ref name=Zimbalist1988>{{cite book |last1=Zimbalist |last2=Sherman |last3=Brown |first1=Andrew |first2=Howard J. |first3=Stuart |title=Comparing Economic Systems: A Political-Economic Approach |publisher=Harcourt College Publishing|year=1988|isbn=978-0-15-512403-5 |pages=[https://archive.org/details/comparingeconomi0000zimb_q8i6/page/6 6–7] |quote=Pure capitalism is defined as a system wherein all of the means of production (physical capital) are privately owned and run by the capitalist class for a profit, while most other people are workers who work for a salary or wage (and who do not own the capital or the product).|url=https://archive.org/details/comparingeconomi0000zimb_q8i6/page/6}}</ref><ref name=Rosser2003>{{cite book |last1=Rosser |first1=Mariana V. |last2=Rosser |first2=J Barkley |title=Comparative Economics in a Transforming World Economy |publisher=MIT Press|year=2003|isbn=978-0-262-18234-8|page=7|quote=In capitalist economies, land and produced means of production (the capital stock) are owned by private individuals or groups of private individuals organized as firms.}}</ref><ref name=Jenks>{{cite book |first=Chris |last=Jenks |title=Core Sociological Dichotomies |quote=Capitalism, as a mode of production, is an economic system of manufacture and exchange which is geared toward the production and sale of commodities within a market for profit, where the manufacture of commodities consists of the use of the formally free labor of workers in exchange for a wage to create commodities in which the manufacturer extracts surplus value from the labor of the workers in terms of the difference between the wages paid to the worker and the value of the commodity produced by him/her to generate that profit. |___location=London|publisher=SAGE Publishing|page=383}}</ref><ref name=Gilpin2018>{{cite book |title=The Challenge of Global Capitalism : The World Economy in the 21st Century |last=Gilpin |first=Robert |author-link=Robert Gilpin |isbn=978-0-691-18647-4 |oclc=1076397003 |year=2018|publisher=Princeton University Press }}</ref><ref name=Sternberg2015>{{cite journal|last1=Sternberg |first1=Elaine |title=Defining Capitalism |journal=Economic Affairs|year=2015|volume=35 |issue=3 |pages=380–396 |doi=10.1111/ecaf.12141|s2cid=219373247}}</ref> This socioeconomic system has developed historically through several stages and is defined by a number of basic constituent elements: [[private property]], [[profit motive]], [[capital accumulation]], [[Competition (economics)|competitive markets]], [[commodification]], [[Wage labour|wage labor]], and an emphasis on [[innovation]] and [[economic growth]].<ref name=Heilbroner2018>{{cite book|last1=Heilbroner|first1=RobertL.|title=The New Palgrave Dictionary of Economics |year=2018|publisher=Palgrave Macmillan|___location=London|isbn=978-1-349-95189-5 |pages=1378–1389 |edition=3rd |chapter-url=https://link.springer.com/referenceworkentry/10.1057/978-1-349-95189-5_154|chapter=Capitalism |doi=10.1057/978-1-349-95189-5_154}}</ref><ref name=Hodgson2015>{{cite book|last1=Hodgson|first1=GeoffreyM.|title=Conceptualizing Capitalism: Institutions, Evolution, Future|year=2015|publisher=University of Chicago Press|___location=Chicago|isbn=9780226168142|url=https://press.uchicago.edu/ucp/books/book/chicago/C/bo18523749.html}}</ref><ref name=Berend2015>{{cite book |last1=Berend |first1=Ivan T. |title=International Encyclopedia of the Social & Behavioral Sciences |chapter=Capitalism |year=2015|pages=94–98|doi=10.1016/B978-0-08-097086-8.62003-2|isbn=978-0-08-097087-5 }}</ref><ref name=Bonanno2012>{{cite book|last1=Antonio|first1=RobertJ.|last2=Bonanno|first2=Alessandro |title=The Wiley-Blackwell Encyclopedia of Globalization |chapter=Capitalism |year=2012|doi=10.1002/9780470670590.wbeog060|isbn=978-1-4051-8824-1}}</ref><ref name=Beamish2018>{{cite book|last1=Beamish |first1=Rob |chapter=Capitalism |title=Core Concepts in Sociology |year=2018|pages=17–22 |doi=10.1002/9781394260331.ch6|isbn=978-1-119-16861-4 }}</ref><ref name=Gregory2013>{{cite book|last1=Gregory|first1=Paul|last2=Stuart|first2=Robert|year=2013|title=The Global Economy and its Economic Systems|publisher=South-Western College Publishing|page=41|isbn=978-1-285-05535-0|quote=Capitalism is characterized by private ownership of the factors of production. Decision making is decentralized and rests with the owners of the factors of production. Their decision making is coordinated by the market, which provides the necessary information. Material incentives are used to motivate participants.}}</ref> Capitalist economies tend to experience a [[business cycle]] of economic growth followed by [[Recession|recessions]].<ref name=Hodrick1997>{{cite journal|last1=Hodrick|first1=R.|last2=Prescott |first2=E. |year=1997|title=Postwar US business cycles: An empirical investigation|url=http://www.kellogg.northwestern.edu/research/math/papers/451.pdf|journal=Journal of Money, Credit and Banking|volume=29|issue=1|pages=1–16|doi=10.2307/2953682|jstor=2953682|s2cid=154995815}}</ref>
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|laissez-faire]]'' or [[Free_market#Capitalism|free-market capitalism]], [[state capitalism]], and [[welfare capitalism]]. Different forms of capitalism feature varying degrees of [[free market]]s, [[State ownership|public ownership]],<ref name="gregorystuart">{{cite book|last1=Gregory |first1=Paul |last2=Stuart |first2=Robert |title=The Global Economy and its Economic Systems |publisher=South-Western College Publishing|year=2013|isbn=978-1-285-05535-0|page=107|quote=Real-world capitalist systems are mixed, some having higher shares of public ownership than others. The mix changes when privatization or nationalization occurs. Privatization is when property that had been state-owned is transferred to private owners. [[Nationalization]] occurs when privately owned property becomes publicly owned.}}</ref> obstacles to free competition, and state-sanctioned [[Social policy|social policies]]. The degree of [[Competition (economics)|competition]] in [[Market (economics)|markets]] and the role of [[Market intervention|intervention]] and [[Regulatory economics|regulation]], as well as the scope of state ownership, vary across different models of capitalism.<ref name="Modern Economics 1986, p. 54">{{cite book|title=Macmillan Dictionary of Modern Economics|edition=3|year=1986|pages=54}}</ref><ref name=Bronk2000>{{cite magazine |last=Bronk |first=Richard |title=Which model of capitalism|url=http://oecdobserver.org/news/archivestory.php/aid/345/Which_model_of_capitalism_.html |url-status=live |magazine=OECD Observer|publisher=OECD|year=2000|volume=1999 |issue=221–222 |pages=12–15|archive-url=https://web.archive.org/web/20180406200423/http://oecdobserver.org/news/archivestory.php/aid/345/Which_model_of_capitalism_.html |archive-date=6 April 2018 |access-date=6 April 2018}}</ref> 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 economy|mixed economies]] that combine elements of free markets with state intervention and in some cases [[economic planning]].<ref name="Stilwell">{{cite book |last=Stilwell |first=Frank |author-link=Frank Stilwell (economist) |title=Political Economy: the Contest of Economic Ideas |edition=1st |publisher=Oxford University Press|___location=Melbourne|year=2002}}</ref>
Capitalism in its modern form emerged from [[agrarianism]] in England, as well as [[Mercantilism|mercantilist]] practices by European countries between the 16th and 18th centuries. The [[Industrial Revolution]] of the 18th century established [[Capitalist mode of production (Marxist theory)|capitalism as a dominant mode of production]], characterized by factory work, and a complex [[Division of labour|division of labor]]. Through the process of [[globalization]], capitalism spread across the world in the 19th and 20th centuries, especially before [[World War I]] and 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 [[Keynesian economics|Keynesianism]], followed by a return of more unregulated capitalism starting in the 1980s through [[neoliberalism]].
== Etymology ==
The term "capitalist", meaning an owner of [[Capital (economics)|capital]], appears earlier than the term "capitalism" and dates to the mid-17th century. "Capitalism" is derived from ''capital'', which evolved from {{lang|la|capitale}}, a late [[Latin]] word based on {{lang|la|caput}}, meaning "head"—which is also the origin of "[[Personal property|chattel]]" and "[[cattle]]" in the sense of movable property (only much later to refer only to livestock). {{lang|la|Capitale}} emerged in the 12th to 13th centuries to refer to funds, stock of merchandise, sum of money or money carrying interest.<ref name=Braudel1979>{{cite book|last=Braudel |first=Fernand |author-link=Fernand Braudel |title=The Wheels of Commerce: Civilization and Capitalism 15th–18th Century|publisher=Harper and Row|date=1979}}</ref>{{rp|232}}<ref name="OED-93">[[James Murray (lexicographer)|James Augustus Henry Murray]]. "Capital". [https://archive.org/details/oedvol02 A New English Dictionary on Historical Principles]. ''Oxford English Press''. {{abbr|Vol.|Volume}} 2. p. 93.</ref> 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.<ref name=Braudel1979/>{{rp|233}}
The ''Hollantse ({{langx|de|holländische}}) Mercurius'' uses "capitalists" in 1633 and 1654 to refer to owners of capital.<ref name=Braudel1979/>{{rp|234}} In French, [[Étienne Clavier]] referred to ''capitalistes'' in 1788,<ref>E.g., "L'Angleterre a-t-elle l'heureux privilège de n'avoir ni Agioteurs, ni Banquiers, ni Faiseurs de services, ni Capitalistes ?" in [Étienne Clavier] (1788) ''De la foi publique envers les créanciers de l'état : lettres à M. Linguet sur le n° CXVI de ses annales'' [https://books.google.com/books?id=ESMVAAAAQAAJ&pg=PA19 p. 19] {{Webarchive|url=https://web.archive.org/web/20150319071130/http://books.google.com/books?id=ESMVAAAAQAAJ&pg=PA19 |date=19 March 2015 }}</ref> four years before its first recorded English usage by [[Arthur Young (writer)|Arthur Young]] in his work ''Travels in France'' (1792).<ref name="OED-93" /><ref>Arthur Young. [https://archive.org/details/travelsduringye03youngoog ''Travels in France''].</ref> In his ''[[Principles of Political Economy and Taxation]]'' (1817), [[David Ricardo]] referred to "the capitalist" many times.<ref>Ricardo, David. Principles of Political Economy and Taxation. 1821. John Murray Publisher, 3rd edition.</ref> English poet [[Samuel Taylor Coleridge]] used "capitalist" in his work ''Table Talk'' (1823).<ref>Samuel Taylor Coleridge. [https://books.google.com/books?id=ma-4W-XiGkIC Tabel ''The Complete Works of Samuel Taylor Coleridge''] {{Webarchive|url=https://web.archive.org/web/20200223123202/https://books.google.com/books?id=ma-4W-XiGkIC |date=23 February 2020 }}. p. 267.</ref> [[Pierre-Joseph Proudhon]] used the term in his first work, ''[[What is Property?]]'' (1840), to refer to the owners of capital. [[Benjamin Disraeli]] used the term in his 1845 work ''[[Sybil (novel)|Sybil]]''.<ref name="OED-93" /> [[Alexander Hamilton]] used "capitalist" in his [[Report on Manufactures|Report of Manufactures]] presented to the United States Congress in 1791.
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").<ref name=Braudel1979/>{{rp|237}} [[Karl Marx]] frequently referred to the "[[Capital (Marxism)|capital]]" and to the "capitalist mode of production" in ''[[Capital: Critique of Political Economy|Das Kapital]]'' (1867).<ref>{{cite book |last=Saunders |first=Peter |date=1995 |title=Capitalism |publisher=[[University of Minnesota Press]] |page=1}}</ref><ref name=":0">MEW, 23, & Das Kapital. Kritik der politischen Oekonomie. Erster Band-Verlag von Otto Meissner (1867)</ref> Marx did not use the form ''capitalism'' but instead used [[Capital (Marxism)|capital]], ''capitalist'' and ''capitalist mode of production'', which appear frequently.<ref name=":0" /><ref>The use of the word "capitalism" appears in ''Theories of Surplus Value'', volume II. ToSV was edited by Kautsky.</ref> 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 [[Individualism#Economic individualism|economic individualism]].<ref>Hessen, Robert (2008) "Capitalism", in Henderson, David R. (ed.) ''The Concise Encyclopedia of Economics'' p. 57</ref> [[Bernard Harcourt]] agrees with the statement that the term is a misnomer, adding that it misleadingly suggests that there is such a thing as "[[Capital (economics)|capital]]" that inherently functions in certain ways and is governed by stable economic laws of its own.<ref>Harcourt, Bernard E. (2020) ''For Coöperation and the Abolition of Capital, Or, How to Get Beyond Our Extractive Punitive Society and Achieve a Just Society'', Rochester, NY: Columbia Public Law Research Paper No. 14-672, p. 31</ref>
In the [[English language]], the term "capitalism" first appears, according to the ''[[Oxford English Dictionary]]'' (OED), in 1854, in the novel ''[[The Newcomes]]'' by novelist [[William Makepeace Thackeray]], where the word meant "having ownership of capital".<ref name="OED-94">[[James Murray (lexicographer)|James Augustus Henry Murray]]. "Capitalism" p. 94.</ref> Also according to the OED, [[Carl Adolph Douai]], a [[German Americans|German American]] [[Socialism|socialist]] and [[Abolitionism in the United States|abolitionist]], used the term "private capitalism" in 1863.
Other terms sometimes used for capitalism are:
* [[Capitalist mode of production (Marxist theory)|Capitalist mode of production]]<ref>{{cite book |last=Mandel |first=Ernst |author-link=Ernst Mandel |title=An Introduction to Marxist Economic Theory |url=https://books.google.com/books?id=Pf9Jd1sIMJ0C&pg=PA24 |year=2002 |publisher=Resistance Books|isbn=978-1-876646-30-1 |page=24 |access-date=29 January 2017 |archive-date=15 February 2017 |archive-url=https://web.archive.org/web/20170215160137/https://books.google.com/books?id=Pf9Jd1sIMJ0C&pg=PA24 |url-status=live}}</ref>
* [[Economic liberalism]]<ref>{{cite journal |title=Adam Smith and His Legacy for Modern Capitalism |last=Werhane |first=P. H. |journal=The Review of Metaphysics |volume=47 |year=1994 |issue=3}}</ref>
* Free enterprise<ref name="rogetfreeenterprise">{{cite encyclopedia |title=Free enterprise |encyclopedia=Roget's 21st Century Thesaurus |edition=Third |publisher=Philip Lief Group |date=2008}}</ref>{{page needed|date=July 2021}}
* Free enterprise economy<ref name="britannica" />
* [[Free market]]<ref name="rogetfreeenterprise" />{{page needed|date=July 2021}}
* Free market economy<ref name="britannica" />
* ''[[Laissez-faire]]''<ref name=Barrons>{{cite book |title=Barrons Dictionary of Finance and Investment Terms |date=1995 |page=74}}</ref>
* [[Market economy]]<ref>{{cite encyclopedia |url=https://www.merriam-webster.com/dictionary/market%20economy |title=Market economy |dictionary=Merriam-Webster Unabridged Dictionary}}</ref>
* Profits system<ref>{{cite book |last=Shutt |first=Harry |title=Beyond the Profits System: Possibilities for the Post-Capitalist Era |publisher=[[Zed Books]] |year=2010 |isbn=978-1-84813-417-1}}</ref>{{page needed|date=July 2021}}
* Self-regulating market<ref name="rogetfreeenterprise" />{{page needed|date=July 2021}}
== Definition ==
There is no universally agreed upon definition of capitalism; it is unclear whether or not capitalism characterizes an entire society, a specific type of social order, or crucial
components or elements of a society.<ref name="wolf">{{cite encyclopedia |last=Wolf |first=Harald |editor1-last=Ritzer |editor1-first=George|title=Capitalism |encyclopedia=Encyclopedia of Social Theory|pages=76–80|date=2004 |publisher=Sage Publications|isbn=978-1-4522-6546-9}}</ref> Societies officially founded in opposition to capitalism, such as the [[Soviet Union|Union of Soviet Socialist Republics]] (U.S.S.R), and the [[People's Republic of China]], have sometimes been argued to actually exhibit characteristics of capitalism.<ref>{{cite journal |last1=Howard |first1=M.C. |last2=King |first2=J.E. |title='State Capitalism' in the Soviet Union |journal=History of Economics Review |date=January 2001 |volume=34 |issue=1 |pages=110–126 |doi=10.1080/10370196.2001.11733360 |s2cid=42809979 |url=https://www.tandfonline.com/doi/pdf/10.1080/10370196.2001.11733360 |language=en |issn=1037-0196|url-access=subscription }}</ref> [[Nancy Fraser]] describes usage of the term "capitalism" by many authors as "mainly rhetorical, functioning less as an actual concept than as a gesture toward the
need for a concept".<ref name=harris>{{cite journal|last1=Harris|first1=Neal|last2=Delanty|first2=Gerard|title=What is capitalism? Toward a working definition |journal=Social Science Information|year=2023|volume=62|issue=3|pages=323–344|doi=10.1177/05390184231203878 |doi-access=free}}</ref> Scholars who are uncritical of capitalism rarely actually use the term "capitalism".<ref name="delacroix">{{cite encyclopedia |last=Delacroix |first=Jacques |editor1-last=Ritzer |editor1-first=George |title=Capitalism |encyclopedia=Encyclopedia of Social Theory|date=2007 |publisher=Wiley|doi=10.1002/9781405165518.wbeosc004 |isbn=978-1-4051-2433-1|url=https://onlinelibrary.wiley.com/doi/10.1002/9781405165518.wbeosc004|url-access=subscription }}</ref>
Some doubt that the term "capitalism" possesses valid scientific dignity,<ref name="wolf"/> and it is generally not discussed in [[mainstream economics]],<ref name="harris"/> with economist [[Daron Acemoglu]] suggesting that the term "capitalism" should be abandoned entirely.<ref>{{cite book |last=Acemoglu |first=Daron |date=2017 |editor1-last=Frey |editor1-first=Bruno S.|editor2-last = Iselin|editor2-first = David |title=Economic Ideas You Should Forget |publisher=Springer|pages=1–3 |chapter=Capitalism|doi=10.1007/978-3-319-47458-8_1 |isbn=978-3-319-47457-1|chapter-url=https://link.springer.com/chapter/10.1007/978-3-319-47458-8_1}}</ref> Consequently, understanding of the concept of capitalism tends to be heavily influenced by opponents of capitalism and by the followers and critics of Karl Marx.<ref name="delacroix"/>
== History ==
{{Main|History of capitalism}}
[[File:Jacopo Pontormo 055.jpg|thumb|upright=0.8|[[Cosimo de' Medici]] (pictured in a 16th-century portrait by [[Pontormo]]) built an international financial empire and was one of the first [[Medici bank]]ers.]]
[[File:Augsburg - Markt.jpg|thumb|upright=0.8|[[Augsburg]], the centre of early capitalism<ref>{{cite encyclopedia |last1=Behringer |first1=Wolfgang |contribution=Core and Periphery: The Holy Roman Empire as a Communication(s) Universe |title=The Holy Roman Empire, 1495–1806 |date=2011 |publisher=Oxford University Press |___location=Oxford |isbn=978-0-19-960297-1 |pages=347–358|url=https://perspectivia.net/servlets/MCRFileNodeServlet/pnet_derivate_00004689/behringer_core.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://perspectivia.net/servlets/MCRFileNodeServlet/pnet_derivate_00004689/behringer_core.pdf |archive-date=9 October 2022 |url-status=live |access-date=7 August 2022}}</ref>]]
Capitalism, in its modern form, can be traced to the emergence of agrarian capitalism and mercantilism in the early [[Renaissance]], in city-states like [[Florence]].<ref>{{cite news |url=https://www.economist.com/books-and-arts/2009/04/16/cradle-of-capitalism |title=Cradle of capitalism |newspaper=[[The Economist]] |date=16 April 2009 |access-date=9 March 2015 |archive-date=18 January 2018 |archive-url=https://web.archive.org/web/20180118055643/http://www.economist.com/node/13484709 |url-status=live}}</ref> [[Capital (economics)|Capital]] has existed incipiently on a small scale for centuries<ref name="WarburtonDavid">{{cite book |last=Warburton |first=David |title=Macroeconomics from the beginning: The General Theory, Ancient Markets, and the Rate of Interest |___location=Paris |publisher=Recherches et Publications |date=2003 |pages=49}}</ref> in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labor. Simple [[commodity]] 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]], [[Arabs]] promulgated capitalist economic policies such as free trade and banking. Their use of [[Indo-Arabic numerals]] facilitated [[bookkeeping]]. These innovations migrated to Europe through trade partners in cities such as Venice and Pisa. Italian [[mathematicians]] traveled the Mediterranean talking to Arab traders and returned to popularize the use of Indo-Arabic numerals in Europe.<ref name="Koehler, Benedikt">{{cite book |last=Koehler |first=Benedikt |title=Early Islam and the Birth of Capitalism |quote=In Baghdad, by the early tenth century a fully-fledged banking sector had come into being... |pages=2 |publisher=[[Lexington Books]] |date=2014}}</ref>
=== 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]]-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]] to extract peasant [[Excess supply|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 economics|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.<ref>{{cite journal |last1=Brenner |first1=Robert |title=The Agrarian Roots of European Capitalism |journal=[[Past & Present (journal)|Past & Present]] |date=1 January 1982 |issue=97 |pages=16–113 |doi=10.1093/past/97.1.16 |jstor=650630}}</ref><ref>{{cite web |url=http://monthlyreview.org/1998/07/01/the-agrarian-origins-of-capitalism |title=The Agrarian Origins of Capitalism |access-date=17 December 2012 |date=July 1998 |archive-date=11 December 2019 |archive-url=https://web.archive.org/web/20191211183143/https://monthlyreview.org/1998/07/01/the-agrarian-origins-of-capitalism/ |url-status=live}}</ref>
=== Mercantilism ===
{{Main|Mercantilism}}
[[File:Lorrain.seaport.jpg|left|thumb|A painting of a French seaport from 1638 at the height of [[mercantilism]]]]
[[File:Lord Clive meeting with Mir Jafar after the Battle of Plassey.jpg|left|thumb|[[Robert Clive]] with the [[Nawabs of Bengal]] after the [[Battle of Plassey]] which began the British rule in [[Bengal Presidency|Bengal]]]]
The economic doctrine prevailing from the 16th to the 18th centuries is commonly called [[mercantilism]].<ref name=GSGB>{{cite book |url=https://books.google.com/books?id=Pf9Jd1sIMJ0C |title=An Introduction to Marxist Economic Theory |date= 2002 |publisher=Resistance Books|via=[[Google Books]] |isbn=978-1-876646-30-1 |access-date=27 August 2016 |archive-date=11 December 2016 |archive-url=https://web.archive.org/web/20161211173733/https://books.google.com/books?id=Pf9Jd1sIMJ0C |url-status=live}}</ref><ref name="Burnham">{{cite book |last=Burnham |first=Peter |author-link=Peter Burnham |title=Capitalism: The Concise Oxford Dictionary of Politics |publisher=[[Oxford University Press]] |year=2003}}</ref> This period, the [[Age of Discovery]], was associated with the geographic exploration of foreign lands by merchant traders, especially from England and the [[Low Countries]]. Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist methods.<ref name="Scott" /> Most scholars consider the era of merchant capitalism and mercantilism as the origin of modern capitalism,<ref name="Burnham"/><ref name="Encyclopædia Britannica 2006">''Encyclopædia Britannica'' (2006)</ref> 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".<ref>{{cite book |last=Polanyi |first=Karl |author-link=Karl Polanyi |title=The Great Transformation |publisher=[[Beacon Press]] |___location=Boston |date=1944 |pages=87}}</ref>
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.<ref>{{cite book |first1=David |last1=Onnekink |first2=Gijs |last2=Rommelse |title=Ideology and Foreign Policy in Early Modern Europe (1650–1750) |url=https://books.google.com/books?id=M1QdbzdTimsC&pg=PA257 |year=2011 |publisher=[[Ashgate Publishing]] |page=257 |isbn=978-1-4094-1914-3 |access-date=27 June 2015 |archive-date=19 March 2015 |archive-url=https://web.archive.org/web/20150319130220/http://books.google.com/books?id=M1QdbzdTimsC&pg=PA257 |url-status=live}}</ref>
European [[merchant]]s, backed by state controls, subsidies and [[monopoly|monopolies]], made most of their profits by buying and selling goods. In the words of [[Francis Bacon]], 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...".<ref>Quoted in {{cite book |first=George |last=Clark |title=The Seventeenth Century |___location=New York |publisher=[[Oxford University Press]] |date=1961 |page=24}}</ref>
After the period of the [[proto-industrialization]], the [[British East India Company]] and the [[Dutch East India Company]], after massive contributions from the [[Mughal Bengal]],<ref name="Prakash">[[Om Prakash (historian)|Om Prakash]], "[http://link.galegroup.com/apps/doc/CX3447600139/WHIC?u=seat24826&xid=6b597320 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</ref><ref name="ray">{{cite book |first=Indrajit |last=Ray |year=2011 |title=Bengal Industries and the British Industrial Revolution (1757–1857) |url=https://books.google.com/books?id=CHOrAgAAQBAJ&pg=PA57 |publisher=[[Routledge]] |pages=57, 90, 174 |isbn=978-1-136-82552-1 |access-date=20 June 2019 |archive-date=29 May 2016 |archive-url=https://web.archive.org/web/20160529021839/https://books.google.com/books?id=CHOrAgAAQBAJ |url-status=live}}</ref> inaugurated an expansive era of commerce and trade.<ref name=Banaji>{{cite journal |last=Banaji |first=Jairus |year=2007 |title=Islam, the Mediterranean and the rise of capitalism |journal=Journal of Historical Materialism|volume=15 |pages=47–74 |doi=10.1163/156920607X171591 |url=http://eprints.soas.ac.uk/15983/1/Islam%20and%20capitalism.pdf |access-date=20 April 2018 |archive-date=29 March 2018 |archive-url=https://web.archive.org/web/20180329015002/http://eprints.soas.ac.uk/15983/1/Islam%20and%20capitalism.pdf |url-status=dead}}</ref><ref name="britannica2">{{cite book |title=Economic system:: Market systems |url=https://www.britannica.com/EBchecked/topic/178493/economic-system/61117/Market-systems#toc242146 |publisher=Encyclopædia Britannica |year=2006 |access-date=4 January 2009 |archive-date=24 May 2009 |archive-url=https://web.archive.org/web/20090524075921/https://www.britannica.com/EBchecked/topic/178493/economic-system/61117/Market-systems#toc242146 |url-status=live}}</ref> These companies were characterized by their [[colonialism|colonial]] and [[Expansionism|expansionary]] powers given to them by nation-states.<ref name="Banaji" /> 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]].
=== Industrial Revolution ===
{{Main|Industrial Revolution}}
[[File:Maquina vapor Watt ETSIIM.jpg|thumb|The [[Watt steam engine]], fuelled primarily by [[coal]], propelled the [[Industrial Revolution]] in [[United Kingdom|Britain]].<ref>Watt steam engine image located in the lobby of the Superior Technical School of Industrial Engineers of the [[Technical University of Madrid|UPM]]{{clarify|date=April 2016}} ([[Madrid]]).</ref>]]
In the mid-18th century a group of economic theorists, led by [[David Hume]] (1711–1776)<ref>{{cite book |last=Hume |first=David |author-link=David Hume |title=Political Discourses |url=https://archive.org/details/McGillLibrary-125702-2590 |___location=Edinburgh |publisher=A. Kincaid & A. Donaldson |year=1752}}</ref> and [[Adam Smith]] (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]], [[industrialists]] replaced merchants as a dominant factor in the capitalist system and effected the decline of the traditional handicraft skills of [[artisan]]s, guilds and [[journeyman|journeymen]]. Industrial capitalism marked the development of the [[factory system]] of manufacturing, characterized by a complex [[division of labor]] between and within work process and the routine of work tasks; and eventually established the domination of the [[Capitalist mode of production (Marxist theory)|capitalist mode of production]].<ref>{{cite book |last1=Burnham |first1=Peter |author1-link=Peter Burnham |year=1996 |chapter=Capitalism |editor1-last=McLean |editor1-first=Iain |editor2-last=McMillan |editor2-first=Alistair |title=The Concise Oxford Dictionary of Politics |url=https://books.google.com/books?id=8JkyAwAAQBAJ |series=Oxford Quick Reference |edition=3 |___location=Oxford |publisher=[[Oxford University Press]] |publication-date=2009 |isbn=978-0-19-101827-5 |access-date=14 September 2019 |quote=Industrial capitalism, which Marx dates from the last third of the eighteenth century, finally establishes the domination of the capitalist mode of production. |archive-date=27 July 2020 |archive-url=https://web.archive.org/web/20200727163404/https://books.google.com/books?id=8JkyAwAAQBAJ |url-status=live}}</ref>
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 capitalism|Manchester School]], initiated a movement to lower [[tariffs]].<ref name="laissezf">{{cite web |title=Laissez-faire |url=http://www.bartleby.com/65/la/laissezf.html |url-status=dead |archive-url=https://web.archive.org/web/20081202050426/http://www.bartleby.com/65/la/laissezf.html |archive-date=2 December 2008}}</ref> 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]].<ref>{{cite book |last1=Burnham |first1=Peter |author1-link=Peter Burnham |year=1996 |chapter=Capitalism |editor1-last=McLean |editor1-first=Iain |editor2-last=McMillan |editor2-first=Alistair |title=The Concise Oxford Dictionary of Politics |url=https://books.google.com/books?id=8JkyAwAAQBAJ |series=Oxford Quick Reference |edition=3 |___location=Oxford |publisher=[[Oxford University Press]] |publication-date=2009 |isbn=978-0-19-101827-5 |access-date=14 September 2019 |quote=For most analysts, mid- to late-nineteenth century Britain is seen as the apotheosis of the laissez-faire phase of capitalism. This phase took off in Britain in the 1840s with the repeal of the Corn Laws, and the Navigation Acts, and the passing of the Banking Act. |archive-date=27 July 2020|archive-url=https://web.archive.org/web/20200727163404/https://books.google.com/books?id=8JkyAwAAQBAJ |url-status=live}}</ref> Britain reduced tariffs and [[import quota|quotas]], in line with David Ricardo's advocacy of [[free trade]].
=== Modernity ===
[[File:McKinley Prosperity.jpg|thumb|upright|The [[gold standard]] formed the financial basis of the international economy from 1870 to 1914.]]
Broader processes of [[globalization]] 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.<ref name="SAGE Publications">{{cite book |year=2007 |last1=James |first1=Paul |author-link=Paul James (academic) |last2=Gills |first2=Barry |title=Globalization and Economy, Vol. 1: Global Markets and Capitalism |url=https://www.academia.edu/4199690 |publisher=[[SAGE Publications]] |___location=London |page=xxxiii}}</ref><ref>{{cite journal |title=Impact of Global Capitalism on the Environment of Developing Economies |url=http://s-space.snu.ac.kr/bitstream/10371/93716/1/04_Osariyekemwen%20Igiebor.pdf |journal=Impact of Global Capitalism on the Environment of Developing Economies: The Case of Nigeria |pages=84 |access-date=31 July 2020 |archive-date=20 March 2020 |archive-url=https://web.archive.org/web/20200320071239/http://s-space.snu.ac.kr/bitstream/10371/93716/1/04_Osariyekemwen%20Igiebor.pdf |url-status=live}}</ref> Late in the 20th century, capitalism overcame a challenge by [[Planned economy|centrally-planned economies]] and is now the encompassing system worldwide,<ref name="britannica">{{cite book |title=Capitalism |publisher=Encyclopædia Britannica |url=https://www.britannica.com/EBchecked/topic/93927/capitalism |date=10 November 2014 |access-date=24 March 2015 |archive-date=29 June 2011 |archive-url=https://web.archive.org/web/20110629021539/https://www.britannica.com/EBchecked/topic/93927/capitalism |url-status=live}}</ref>{{sfn|Fulcher|2004|p=99}} with the [[mixed economy]] as its dominant form in the industrialized Western world.
[[Industrialization]] allowed cheap production of household items using [[economies of scale]], while rapid [[population growth]] created sustained demand for commodities. The [[imperialism]] of the 18th-century decisively shaped globalization.<ref name="SAGE Publications" /><ref>{{cite journal |last1=Thomas |first1=Martin |last2=Thompson |first2=Andrew |date=1 January 2014 |title=Empire and Globalisation: from 'High Imperialism' to Decolonisation |journal=The International History Review |volume=36 |issue=1 |pages=142–170 |doi=10.1080/07075332.2013.828643 |s2cid=153987517 |issn=0707-5332|doi-access=free }}</ref><ref>{{cite journal |title=Globalization and Empire |url=https://core.ac.uk/download/pdf/47230635.pdf |journal=Globalization and Empire |access-date=31 July 2020 |archive-date=23 September 2020 |archive-url=https://web.archive.org/web/20200923063531/https://core.ac.uk/download/pdf/47230635.pdf |url-status=live}}</ref><ref>{{cite journal |title=Europe and the causes of globalization |url=https://core.ac.uk/download/pdf/7045619.pdf |journal=Europe and the Causes of Globalization, 1790 to 2000 |access-date=31 July 2020 |archive-date=7 December 2017 |archive-url=https://web.archive.org/web/20171207091124/https://core.ac.uk/download/pdf/7045619.pdf |url-status=live}}</ref>
After the [[First Opium War|First]] and [[Second Opium War]]s (1839–60) by [[United Kingdom of Great Britain and Northern Ireland|Britain]] and [[France]] and the completion of the [[British people|British]] conquest of India by 1858 and the [[French people|French]] conquest of [[Africa]], [[Polynesia]] and [[Indochina]] by 1887, vast populations of Asia became consumers of European exports. Europeans colonized areas of Africa and the Pacific islands. Colonisation by Europeans, notably of Africa by the British and French, yielded valuable natural resources such as [[rubber]], [[diamonds]] and [[coal]] and helped fuel trade and investment between the European imperial powers, their colonies and the United States:
{{blockquote|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.<ref>{{cite web |url=https://www.pbs.org/wgbh/commandingheights/shared/minitext/tr_show01.html |title=Commanding Heights: Episode One: The Battle of Ideas |publisher=[[PBS]] |date=24 October 1929 |access-date=31 July 2010 |archive-date=30 March 2010 |archive-url=https://web.archive.org/web/20100330093746/http://www.pbs.org/wgbh/commandingheights/shared/minitext/tr_show01.html |url-status=live}}</ref>}}
From the 1870s to the early 1920s, the global financial system was mainly tied to the [[gold standard]].<ref>{{cite book|last=Eichengreen|first=Barry|author-link=Barry Eichengreen|date=6 August 2019|title=Globalizing Capital: A History of the International Monetary System|edition=3rd|publisher=[[Princeton University Press]]|doi=10.2307/j.ctvd58rxg|isbn=978-0-691-19458-5|s2cid=240840930 |lccn=2019018286}}{{page needed|date=December 2023}}</ref><ref>{{cite book|last1=Eichengreen|first1=Barry|author-link=Barry Eichengreen|last2=Esteves|first2=Rui Pedro|date=2021|editor1-last=Fukao|editor1-first=Kyoji|editor2-last=Broadberry|editor2-first=Stephen|editor2-link=Stephen Broadberry|section=International Finance|title=The Cambridge Economic History of the Modern World|publisher=[[Cambridge University Press]]|volume=2: ''1870 to the Present''|pages=501–525|isbn=978-1-107-15948-8}}</ref> The United Kingdom first formally adopted this standard in 1821. Soon to follow were [[United Province of Canada|Canada]] in 1853, [[History of Newfoundland and Labrador|Newfoundland]] in 1865, the United States and Germany (''[[de jure]]'') in 1873. New technologies, such as the [[telegraph]], the [[transatlantic telegraph cable|transatlantic cable]], the [[radiotelephone]], the [[steamship]] and [[railway]]s allowed goods and information to move around the world to an unprecedented degree.<ref>{{Cite web|url=https://www.nber.org/papers/w7195 |last1=Bordo |first1=Michael D. |author1-link=Michael D. Bordo |last2=Eichengreen |first2=Barry |author2-link=Barry Eichengreen |last3=Irwin |first3=Douglas A. |title=Is Globalization Today Really Different than Globalization a Hundred Years Ago? |series=NBER |number=Working Paper No. 7195 |date=June 1999|doi=10.3386/w7195 }}</ref>
In the United States, the term "capitalist" primarily referred to powerful businessmen<ref>{{Cite book |last=Andrews |first=Thomas G. |title=Killing for Coal: America's Deadliest Labor War |publisher=[[Harvard University Press]] |year=2008 |isbn=978-0-674-03101-2 |___location=Cambridge |page=64 |author-link=Thomas G. Andrews (historian)}}</ref> until the 1920s due to widespread societal skepticism and criticism of capitalism and its most ardent supporters.
[[File:NY stock exchange traders floor LC-U9-10548-6.jpg|thumb|The New York [[stock exchange]] [[trading room|traders' floor]] (1963)]]
Contemporary capitalist societies developed in the West from 1950 to the present and this type of system continues throughout the world—relevant examples started in the [[United States in the 1950s|United States after the 1950s]], [[Trente Glorieuses|France after the 1960s]], [[Spanish miracle|Spain after the 1970s]], [[Economy of Poland|Poland after 2015]], and others. At this stage most capitalist markets are considered{{by whom|date=July 2021}} developed and characterized by developed private and public markets for equity and debt, a high [[standard of living]] (as characterized by the [[World Bank]] and the [[International Monetary Fund|IMF]]), large institutional investors and a well-funded [[banking system]]. A significant [[managerial class]] has emerged{{when|date=July 2021}} 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]]''<ref>{{cite book |last=Crosland |first=Anthony |title=The Future of Socialism |publisher=Jonathan Cape |year=1956 |___location=United Kingdom}}{{page needed|date=December 2023}}</ref> and by [[John Kenneth Galbraith]] in North America in his 1958 book ''[[The Affluent Society]]'',<ref>{{cite book |last=Galbraith |first=John Kenneth |title=The Affluent Society |publisher=[[Houghton Mifflin]] |year=1958 |___location=United States}}{{page needed|date=December 2023}}</ref> 90 years after Marx's research on the state of capitalism in 1867.<ref>{{cite book |last=Shiller |first=Robert |title=Finance and The Good Society |publisher=[[Princeton University Press]] |year=2012 |___location=United States}}{{page needed|date=December 2023}}</ref>
The [[Post–World War II economic expansion|postwar boom]] ended in the late 1960s and early 1970s and the economic situation grew worse with the rise of [[stagflation]].<ref>{{cite book |last=Barnes |first=Trevor J. |title=Reading economic geography |publisher=[[Blackwell Publishing]] |isbn=978-0-631-23554-5 |page=127 |year=2004}}</ref> [[Monetarism]], a modification of [[Keynesian economics|Keynesianism]] that is more compatible with ''laissez-faire'' analyses, gained increasing prominence in the capitalist world, especially under the years in office of [[Ronald Reagan]] in the United States (1981–1989) and of [[Margaret Thatcher]] in the United Kingdom (1979–1990). Public and political interest began shifting away from the so-called [[Collectivism and individualism|collectivist]] concerns of Keynes's managed capitalism to a focus on individual [[choice]], called "remarketized capitalism".{{sfn|Fulcher|2004|p=}}
The end of the [[Cold War]] and the [[dissolution of the Soviet Union]] allowed for capitalism to become a truly global system in a way not seen since before [[World War I]]. The development of the [[neoliberal]] global economy would have been impossible without the fall of [[communism]].<ref>{{cite book |last=Gerstle |first=Gary |author-link=Gary Gerstle |date=2022 |title=The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era |url=https://global.oup.com/academic/product/the-rise-and-fall-of-the-neoliberal-order-9780197519646?cc=us&lang=en& |___location= |publisher=[[Oxford University Press]] |pages=10–12, 149 |isbn=978-0-19-751964-6|quote=The collapse of communism, then, opened the entire world to capitalist penetration, shrank the imaginative and ideological space in which opposition to capitalist thought and practices might incubate, and impelled those who remained leftists to redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage. This was the moment when neoliberalism in the United States went from being a political movement to a political order.}}</ref><ref>{{cite book |last=Bartel |first=Fritz |date=2022 |title=The Triumph of Broken Promises: The End of the Cold War and the Rise of Neoliberalism |url=https://www.hup.harvard.edu/books/9780674976788 |___location= |publisher=[[Harvard University Press]] |pages=5–6, 19 |isbn=978-0-674-97678-8}}</ref><ref>{{cite journal |last1=Greene|first1=Julie|authorlink1= Julie Greene (historian)|date=April 2020|title=Bookends to a Gentler Capitalism: Complicating the Notion of First and Second Gilded Ages|url=|journal=[[The Journal of the Gilded Age and Progressive Era]] |volume=19 |issue=2 |publisher=[[Cambridge University Press]]|pages=197–205|doi=10.1017/S1537781419000628|pmc= |pmid= |access-date= |name-list-style=vanc}}</ref>
Harvard Kennedy School economist Dani Rodrik distinguishes between three historical variants of capitalism:<ref>{{citation |last=Rodrik |first=Dani |title=Capitalism 3.0 |date=2009 |url=https://www.jstor.org/stable/j.ctt46mtqx.23 |work=Aftershocks |volume= |pages=185–193 |editor-last=Hemerijck |editor-first=Anton |publisher=[[Amsterdam University Press]] |jstor=j.ctt46mtqx.23 |isbn=978-90-8964-192-2 |access-date=14 January 2021 |editor2-last=Knapen |editor2-first=Ben |editor3-last=van Doorne |editor3-first=Ellen}}</ref>
* 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]] and capitalism is a contentious area in theory and in popular political movements.<ref>{{cite journal |last1=Milner |first1=Helen V |title=Is Global Capitalism Compatible with Democracy? Inequality, Insecurity, and Interdependence |journal=[[International Studies Quarterly]] |date=2021 |volume=65 |issue=4 |pages=1097–1110 |doi=10.1093/isq/sqab056 |doi-access=free}}</ref> The extension of adult-male [[suffrage]] 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 [[fascism|fascist]] regimes, [[Absolute monarchy|absolute monarchies]] and [[One-party state|single-party states]].<ref name="Burnham" /> [[Democratic peace theory]] asserts that democracies seldom fight other democracies, but others suggest this may be because of political similarity or stability, rather than because they are "democratic" or "capitalist". Critics argue that though economic growth under capitalism has led to democracy, it may not do so in the future as [[authoritarian]] régimes have been able to manage economic growth using some of capitalism's competitive principles<ref>{{cite magazine |first=Gady |last=Epstein |title=The Winners And Losers in Chinese Capitalism |url=https://www.forbes.com/sites/gadyepstein/2010/08/31/the-winners-and-losers-in-chinese-capitalism/ |magazine=[[Forbes]] |access-date=28 October 2015 |archive-date=5 November 2015 |archive-url=https://web.archive.org/web/20151105210914/http://www.forbes.com/sites/gadyepstein/2010/08/31/the-winners-and-losers-in-chinese-capitalism/ |url-status=live}}</ref><ref>{{cite news |title=The rise of state capitalism |url=https://www.economist.com/leaders/2012/01/21/the-rise-of-state-capitalism |newspaper=[[The Economist]] |access-date=24 October 2015 |issn=0013-0613 |archive-date=15 June 2020 |archive-url=https://web.archive.org/web/20200615124603/https://www.economist.com/leaders/2012/01/21/the-rise-of-state-capitalism |url-status=live}}</ref> without making concessions to greater [[political freedom]].<ref>{{cite web |last=Mesquita |first=Bruce Bueno de |url=http://www.foreignaffairs.org/20050901faessay84507/bruce-bueno-de-mesquita-george-w-downs/development-and-democracy.html |title=Development and Democracy |date=September 2005 |access-date=26 February 2008 |work=[[Foreign Affairs]] |url-status=dead |archive-url=https://web.archive.org/web/20080220154505/http://www.foreignaffairs.org/20050901faessay84507/bruce-bueno-de-mesquita-george-w-downs/development-and-democracy.html |archive-date=20 February 2008}}</ref><ref>{{cite journal |last1=Siegle |first1=Joseph |last2=Weinstein |first2=Michael |last3=Halperin |first3=Morton |date=1 September 2004 |title=Why Democracies Excel |url=http://www.mafhoum.com/press7/212S28.pdf |journal=[[Foreign Affairs]] |volume=83 |issue=5 |pages=57 |doi=10.2307/20034067 |jstor=20034067 |access-date=26 August 2018 |archive-date=12 April 2019 |archive-url=https://web.archive.org/web/20190412055541/http://www.mafhoum.com/press7/212S28.pdf |url-status=live}}</ref>
Political scientists [[Torben Iversen]] and [[David Soskice]] see democracy and capitalism as mutually supportive.<ref>{{cite book |last1=Iversen |first1=Torben |url=https://www.jstor.org/stable/j.ctv4g1r3n |title=Democracy and Prosperity: Reinventing Capitalism through a Turbulent Century |last2=Soskice |first2=David |date=2019 |publisher=[[Princeton University Press]] |jstor=j.ctv4g1r3n |isbn=978-0-691-18273-5}}</ref> [[Robert Dahl]] argued in ''On Democracy'' that capitalism was beneficial for democracy because economic growth and a large middle class were good for democracy.<ref name=":0a">{{cite book |last=Dahl |first=Robert A. |url=https://books.google.com/books?id=ZG4JEAAAQBAJ |title=On Democracy |date=2020 |publisher=[[Yale University Press]] |isbn=978-0-300-25799-1 |language=en}}</ref> He also argued that a market economy provided a substitute for government control of the economy, which reduces the risks of tyranny and authoritarianism.<ref name=":0a" />
In his book ''[[The Road to Serfdom]]'' (1944), [[Friedrich Hayek]] (1899–1992) asserted that the free-market understanding of [[economic freedom]] as present in capitalism is a requisite of [[political freedom]]. 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]] and [[Ronald Reagan]] also promoted this view.<ref>{{cite journal |last1=Pryor |first1=Frederic L. |title=Capitalism and freedom? |journal=Economic Systems |date=2010 |volume=34 |issue=1 |pages=91–104 |doi=10.1016/j.ecosys.2009.09.003}}</ref> Friedman claimed that centralized economic operations are always accompanied by [[political repression]]. In his view, transactions in a market economy are voluntary and the wide diversity that voluntary activity permits is a fundamental threat to repressive [[political leader]]s and greatly diminishes their power to coerce. Some of Friedman's views were shared by [[John Maynard Keynes]], who believed that capitalism was vital for freedom to survive and thrive.<ref>{{cite journal |first=Friedrich |last=Hayek |author-link=Friedrich Hayek |title=The Road to Serfdom |journal=[[Nature (journal)|Nature]] |volume=154 |issue=3911 |pages=473–474 |publisher=[[University of Chicago Press]] |year=1944 |isbn=978-0-226-32061-8 |bibcode=1944Natur.154..473C |doi=10.1038/154473a0 |s2cid=4071358}}</ref><ref>{{cite book |last=Bellamy |first=Richard |title=The Cambridge History of Twentieth-Century Political Thought |publisher=[[Cambridge University Press]] |year=2003 |isbn=978-0-521-56354-3 |page=60}}</ref> [[Freedom House]], an American [[think-tank]] that conducts international research on, and advocates for, democracy, political freedom and [[human rights]], has argued that "there is a high and statistically significant correlation between the level of political freedom [[Freedom in the World|as measured by Freedom House]] and economic freedom [[Index of Economic Freedom|as measured by the Wall Street Journal/Heritage Foundation survey]]".<ref>{{cite book |first=Adrian |last=Karatnycky |title=Freedom in the World: The Annual Survey of Political Rights and Civil Liberties |publisher=[[Transaction Publishers]] |date=2001 |isbn=978-0-7658-0101-2 |page=11}}</ref>
In ''[[Capital in the Twenty-First Century]]'' (2013), [[Thomas Piketty]] of the [[Paris School of Economics]] asserted that inequality is the inevitable consequence of economic growth in a capitalist economy and the resulting [[Wealth concentration|concentration of wealth]] can destabilize democratic societies and undermine the ideals of social justice upon which they are built.<ref>{{cite book |author-link=Thomas Piketty |last=Piketty |first=Thomas |date=2014 |title=Capital in the Twenty-First Century |publisher=[[Belknap Press]] |isbn=978-0-674-43000-6 |page=571}}</ref>
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,<ref>{{cite web |title=Transparency International Corruption Measure 2015 |url=https://www.transparency.org/country/#SGP |website=Transparency International Corruption Measure 2015 – By Country / Territory |publisher=Transparency International |access-date=20 September 2016 |archive-date=31 March 2016 |archive-url=https://web.archive.org/web/20160331114640/http://www.transparency.org/country/#SGP |url-status=dead}}</ref> operates largely under a one-party rule. Furthermore, it does not vigorously defend freedom of expression as evidenced by its government-regulated [[Censorship in Singapore|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 [[Military dictatorship of Chile (1973–1990)|rule in Chile]] led to economic growth and high levels of inequality<ref>[[Naomi Klein|Klein, Naomi]] (2008). ''[[The Shock Doctrine: The Rise of Disaster Capitalism]].'' [[Picador (imprint)|Picador]]. {{ISBN|0-312-42799-9}} [https://books.google.com/books?id=PwHUAq5LPOQC&pg=PA105 p. 105] {{Webarchive|url=https://web.archive.org/web/20150319071518/http://books.google.com/books?id=PwHUAq5LPOQC&lpg=PP1&pg=PA105 |date=19 March 2015 }}.</ref> by using authoritarian means to create a safe environment for investment and capitalism. Similarly, [[Suharto]]'s authoritarian reign and [[Indonesian mass killings of 1965–66|extirpation]] of the [[Communist Party of Indonesia]] allowed for the expansion of capitalism in [[Indonesia]].<ref>{{cite journal |last=Farid |first=Hilmar |date=2005 |title=Indonesia's original sin: mass killings and capitalist expansion, 1965–66 |journal=[[Inter-Asia Cultural Studies]] |volume=6 |issue=1 |pages=3–16 |doi=10.1080/1462394042000326879 |s2cid= 145130614}}</ref><ref>{{cite book |last=Robinson |first=Geoffrey B. |date=2018 |title=The Killing Season: A History of the Indonesian Massacres, 1965–66 |url=https://press.princeton.edu/titles/11135.html |publisher=[[Princeton University Press]] |page=177 |isbn=978-1-4008-8886-3 |access-date=1 August 2018 |archive-date=19 April 2019 |archive-url=https://web.archive.org/web/20190419011656/https://press.princeton.edu/titles/11135.html |url-status=live}}</ref>
The term "capitalism" in its modern sense is often attributed to [[Karl Marx]].<ref name="Scott">{{cite book |title=Industrialism: A Dictionary of Sociology |last=Scott |first=John |publisher=[[Oxford University Press]] |year=2005}}</ref><ref>{{cite web |title="capitalism, n.2". OED Online |url=http://www.oed.com/view/Entry/27454?rskey=ZVI1hr&result=2&isAdvanced=false |access-date=19 January 2013 |archive-date=23 September 2020 |archive-url=https://web.archive.org/web/20200923063611/https://www.oed.com/start;jsessionid=A9CBE07460C68ED291D7D6CDCE84A1B1?authRejection=true&url=%2Fview%2FEntry%2F27454%3Frskey%3DZVI1hr%26result%3D2%26isAdvanced%3Dfalse |url-status=live}}</ref> In ''[[Das Kapital]]'', Marx analyzed the "[[Capitalist mode of production (Marxist theory)|capitalist mode of production]]" using a method of critique that later became known as [[Marxism]]. However, while Marx did discuss capitalism extensively, he used the term "capitalism" less frequently than "capitalist mode of production." His collaborator, [[Friedrich Engels]], played a significant role in popularizing the term in more political interpretations of their work. In the 20th century, supporters of the capitalist system often replaced the term "capitalism" with phrases such as "free enterprise" or "private enterprise" to avoid its negative connotations. Similarly, the term "capitalist" was sometimes substituted with "[[investor]]" or "[[Entrepreneurship|entrepreneur]]" to emphasize productive roles rather than passive wealth accumulation.<ref name="Williams 1983 51">{{cite book |last=Williams |first=Raymond |title=Keywords: A vocabulary of culture and society, revised edition |publisher=[[Oxford University Press]] |year=1983 |isbn=978-0-19-520469-8 |page=[https://archive.org/details/keywordsvocabula00willrich/page/51 51] |chapter=Capitalism |chapter-url=https://archive.org/details/keywordsvocabula00willrich/page/51}}</ref>
== Characteristics ==
{{further|Perspectives on capitalism by school of thought}}
In general, capitalism as an economic system and mode of production can be summarized by the following:<ref>{{cite web|url=http://publishing.cdlib.org/ucpressebooks/view?docId=ft3n39n8x3&chunk.id=d0e1212&toc.id=&brand=ucpress |title=Althusser and the Renewal of Marxist Social Theory |access-date=24 March 2015 |archive-date=2 April 2015 |archive-url=https://web.archive.org/web/20150402094835/http://publishing.cdlib.org/ucpressebooks/view?docId=ft3n39n8x3&chunk.id=d0e1212&toc.id=&brand=ucpress |url-status=live}}</ref>
* [[Capital accumulation]]:<ref name=ch32>{{cite book|url=https://www.marxists.org/archive/marx/works/1867-c1/ch32.htm |title=Economic Manuscripts: Capital Vol. I |chapter=Thirty Two |first=Karl |last=Marx |author-link=Karl Marx |access-date=24 March 2015 |via=[[Marxists Internet Archive]] |archive-date=21 February 2015 |archive-url=https://web.archive.org/web/20150221104326/https://www.marxists.org/archive/marx/works/1867-c1/ch32.htm |url-status=live}}</ref> 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.<ref name=xxx31 />
* [[Production (economics)|Commodity production]]: production for exchange on a market; to maximize [[exchange-value]] instead of [[use-value]].
* Exchange of goods or services, can be enabled by [[contract]]s.<ref name="y015">{{cite book | last=Goldberg | first=Victor P. | title=The Oxford Handbook of Capitalism | chapter=Contracts | publisher=Oxford University Press | date=21 November 2012 | isbn=978-0-19-539117-6 | doi=10.1093/oxfordhb/9780195391176.013.0010 | pages=250–274}}</ref> Exchange of services can be in form of [[wage labor]].{{sfn|Steinfeld|2009|p=3}}
* [[Private ownership]] of the means of production.<ref name="Modern Economics 1986, p. 54" />
* The [[investment]] of money to make a profit.{{sfn|Fulcher|2004|p=14}}
* The use of the [[price mechanism]] to allocate resources between competing uses.<ref name="Modern Economics 1986, p. 54" />
* Economically efficient use of the [[factors of production]] and raw materials due to maximization of value added in the production process.<ref>{{cite book|title=Capitalism: A complete understanding of the nature and value of human economic life |last=Reisman |first=George |year=1998 |isbn=0-915463-73-3 |publisher=Jameson Books}}</ref><ref>{{cite book|title=History of Economic Thought: A Critical Perspective |last1=Hunt |first1=E.K. |last2=Lautzenheiser |first2=Mark |year=2014 |publisher=PHI Learning |isbn=978-0-7656-2599-1}}</ref>
* Freedom of capitalists to act in their self-interest in managing their business and investments.<ref>{{cite book|title=Capitalism: A complete understanding of the nature and value of human economic life |last=Reisman |first=George |year=1998 |isbn=978-0-915463-73-2 |publisher=Jameson Books}}</ref>
* Capital suppliance by "the single owner of a firm, or by [[shareholder]]s in the case of a [[joint-stock company]]."<ref name=":1">{{Cite book |title=The Desk Encyclopedia of World History |publisher=[[Oxford University Press]] |year=2006 |isbn=978-0-7394-7809-7 |editor-last=Wright |editor-first=Edmund |___location=New York |pages=111–112}}</ref>
=== Market ===
In free market and ''[[laissez-faire]]'' 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,{{sfn|Fulcher|2004|p=58}} markets continue to play a dominant role, but they are regulated to some extent by the state in order to correct [[market failure]]s, promote [[social welfare]], conserve [[natural resource]]s, fund [[military|defense]] and [[public safety]] or other rationale. In [[State capitalism|state capitalist]] systems, markets are relied upon the least, with the state relying heavily on [[state-owned enterprises]] 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. [[Monopoly|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]] behaviors such as limiting output and raising prices because it has no fear of competition.
Governments have implemented legislation for the purpose of preventing the creation of monopolies and cartels. In 1890, the [[Sherman Antitrust Act of 1890|Sherman Antitrust Act]] became the first legislation passed by the United States Congress to limit monopolies.<ref>{{Cite news|url=http://www.investopedia.com/terms/m/monopoly.asp|title=Monopoly|author=<!--Staff writer(s); no by-line.-->|date=24 November 2003|work=Investopedia|access-date=2 March 2017|language=en-US|archive-date=22 February 2017|archive-url=https://web.archive.org/web/20170222204011/http://www.investopedia.com/terms/m/monopoly.asp|url-status=live}}</ref>
=== Wage labor ===
{{Main|Wage labor}}
Wage labor, usually referred to as paid work, paid employment, or paid labor, refers to the [[socioeconomics|socioeconomic]] relationship between a [[workforce|worker]] and an [[employment|employer]] in which the worker sells their labor power under a formal or informal [[employment contract]].{{sfn|Steinfeld|2009|p=3}} "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 [[labour economics|labor market]] where [[wage]]s or [[salary|salaries]] are [[market economy|market-determined]].{{sfn|Deakin|Wilkinson|2005}}
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 [[work for hire|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.<ref>{{cite book|page=278|title=Concise Dictionary of Economics|isbn=978-93-5057-032-6|publisher=V&S Publishers|year=2013|author=Editorial Board|chapter=W}}</ref>
===
{{Main|Profit motive}}
The [[profit motive]], 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.<ref>
Compare:
{{cite book
| last1 = Duska
| first1 = Ronald F.
| year = 1997
| chapter = The Why's of Business Revisited
| title = Contemporary Reflections on Business Ethics
| url = https://books.google.com/books?id=dANmdJHsqu0C
| series = Issues in Business Ethics
| volume = 23
| ___location = Dordrecht
| publisher = Springer Science & Business Media
| publication-date = 2007
| page = 41
| isbn = 978-1-4020-4984-2
| access-date = 8 July 2019
| quote = In microeconomics courses, profit maximization is frequently given as the goal of the firm. ... In microeconomics, profit maximization functions largely as a theoretical goal, with economists using it to prove how firms behave rationally to increase profit. Unfortunately, it ignores many real-world complexities.
}}
</ref> The profit motive functions according to [[rational choice theory]], 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".<ref>Hazlitt, Henry. "The Function of Profits". ''Economics in One Lesson''. Ludwig Von Mises Institute. Web. 22 April 2013.</ref>
Socialist theorists note that, unlike mercantilists, capitalists accumulate their profits while expecting their profit rates to remain the same. This causes problems as earnings in the rest of society do not increase in the same proportion.<ref>"What is capitalism" ''Australian Socialist'' https://search.informit.org/doi/10.3316/informit.818838886883514</ref>
===
{{Main|Private property}}
The relationship between the [[State (polity)|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 (economist)|Hernando de Soto]] 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.<ref>{{cite web|url=http://www.imf.org/external/pubs/ft/fandd/2001/03/desoto.htm|title=The mystery of capital|author=Hernando de Soto|access-date=26 February 2008|archive-date=8 February 2008|archive-url=https://web.archive.org/web/20080208180121/http://www.imf.org/external/pubs/ft/fandd/2001/03/desoto.htm|url-status=live}}</ref>
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 [[inclosure act]]s in England and similar legislation elsewhere were an integral part of capitalist [[primitive accumulation]] and that specific legal frameworks of private land ownership have been integral to the development of capitalism.<ref>{{cite web|url=http://www.marxists.org/archive/marx/works/1867-c1/ch27.htm|title=Capital, v. 1. Part VIII: primitive accumulation|author=Karl Marx|access-date=26 February 2008|archive-date=3 March 2008|archive-url=https://web.archive.org/web/20080303162047/http://www.marxists.org/archive/marx/works/1867-c1/ch27.htm|url-status=live}}</ref><ref>{{cite journal |author=N.F.R. Crafts |title=Enclosure and labor supply revisited |journal=Explorations in Economic History |issue=2 |date=April 1978 |pages=172–183 |doi=10.1016/0014-4983(78)90019-0 |volume=15}}</ref>
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]].
=== Market competition ===
{{Main|Competition (economics)}}
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".<ref>{{cite web |url=http://m-w.com/dictionary/competition |title=Definition of COMPETITION |access-date=24 March 2015 |archive-date=4 July 2008 |archive-url=https://web.archive.org/web/20080704114809/http://m-w.com/dictionary/competition |url-status=dead}}</ref> It was described by [[Adam Smith]] in ''[[The Wealth of Nations]]'' (1776) and later economists as allocating productive [[resource]]s to their most highly valued uses<ref>{{cite encyclopedia |first=George J. |last=Stigler |author-link=George J. Stigler |date=2008 |title=competition |dictionary=[[The New Palgrave Dictionary of Economics]] |edition=2nd |url=http://www.dictionaryofeconomics.com/article?id=pde2008_C000261&q=competition&topicid=&result_number=6 |archive-url=https://web.archive.org/web/20150215032134/http://www.dictionaryofeconomics.com/article?id=pde2008_C000261&q=competition&topicid=&result_number=6 |archive-date=15 February 2015}}</ref> and encouraging [[x-efficiency|efficiency]]. Smith and other [[classical economist]]s before [[Antoine Augustin Cournot|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 [[Economic equilibrium|equilibrium]].<ref>{{cite encyclopedia |first=Mark |last=Blaug |author-link=Mark Blaug |date=2008 |title=Invisible hand |dictionary=[[The New Palgrave Dictionary of Economics]] |edition=2nd |volume=4 |page=565 |url=http://www.dictionaryofeconomics.com/article?id=pde2008_I000220&edition=current&q=Invisible%20hand&topicid=&result_number=1 |archive-url=https://web.archive.org/web/20130605204024/http://www.dictionaryofeconomics.com/article?id=pde2008_I000220&edition=current&q=Invisible%20hand&topicid=&result_number=1 |archive-date=5 June 2013}}</ref> Competition is widespread throughout the [[market process]]. It is a condition where "buyers tend to compete with other buyers, and sellers tend to compete with other sellers".<ref name=ewot2014 /><!-- p. 102 --> 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.<ref name=ewot2014>{{cite book |last1=Heyne |first1=Paul |last2=Boettke |first2=Peter J. |last3=Prychitko |first3=David L. |title=The Economic Way of Thinking |date=2014 |publisher=Pearson |isbn=978-0-13-299129-2 |pages=102–106 |edition=13th}}<!--|access-date=24 December 2014 --></ref>{{rp|105}}
In the works of Adam Smith, the idea of capitalism is made possible through competition which creates growth. Although capitalism had 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."<ref name="W.W. Norton">{{cite book |last1=Warsh |first1=David |title=Knowledge and the Wealth of Nations |date=2007 |publisher=[[W.W. Norton]] |page=42}}</ref> He believed that the freedom to act in one's self-interest is essential for the success of a capitalist society. In response to the idea 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."<ref>{{cite book |last1=Lippit |first1=Victor |title=Capitalism |date=2005 |publisher=[[Taylor & Francis]] |___location=ProQuest |page=2}}</ref> 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.<ref name="W.W. Norton"/>
=== Economic growth ===
{{further|Economic growth}}
[[Economic growth]] is a characteristic tendency of economies.<ref name=joff>{{cite journal|title=The root cause of economic growth under capitalism |journal=[[Cambridge Journal of Economics]] |year=2011 |issue=5 |pages=873–896 |first=Michael |last=Joff |volume=35 |quote=The tendency for capitalist economies to grow is one of their most characteristic properties. |doi=10.1093/cje/beq054}}</ref><ref>{{cite book |last1=Baumol |first1=William J. |title=The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism |date=2004 |publisher=[[Princeton University Press]] |___location=Princeton |isbn=9780691116303}}</ref> However, capitalist economies may experience fluctuations in growth that cannot be accounted for by demographic or technological changes. These fluctuations, which involve sustained periods of economic growth and recession, are referred to as business cycles in macroeconomics. Economic growth is measured as growth in investment, economic output, and economic consumption per capita. Changes in hours of employment on their own are not considered as a factor of economic growth.<ref name=Hodrick1997/>
=== As a mode of production ===
{{further|Mode of production}}
The capitalist mode of production refers to the systems of organising production and distribution within capitalist [[society|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 term capitalist mode of production is defined by [[Private property|private ownership]] of the [[means of production]], extraction of [[surplus value]] by the owning class for the purpose of [[capital accumulation]], [[Wage labour|wage-based labor]] and, at least as far as [[Commodity|commodities]] are concerned, being [[Market economy|market-based]].<ref>{{cite web |url=http://www.marxists.org/glossary/terms/c/a.htm#capitalism |title=Capitalism |publisher=[[Marxists Internet Archive]] |access-date=8 July 2011 |author=Encyclopedia of Marxism at marxism.org |archive-date=7 May 2019 |archive-url=https://web.archive.org/web/20190507154837/https://www.marxists.org/glossary/terms/c/a.htm#capitalism |url-status=live}}</ref>
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]] (hence the reference to "[[merchant capitalism]]") 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.<ref name="Modern Economics 1986, p. 54" /> 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.<ref name=ch32 /> This has the important consequence that, under capitalism, the whole organisation of the production process is reshaped and re-organised to conform with economic [[bounded rationality|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.<ref name=xxx31>{{cite web|url=http://www.dsp.org.au/node/31 |title=The contradictions of capitalism – Democratic Socialist Perspective |publisher=dsp.org.au |url-status=dead |archive-url=https://web.archive.org/web/20150406094810/http://www.dsp.org.au/node/31 |archive-date=6 April 2015}}</ref>
A society, region or [[nation]] 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.<ref>{{Cite web|title=Capitalism|url=https://www.investopedia.com/terms/c/capitalism.asp|access-date=14 February 2022|website=Investopedia|language=en}}</ref>
[[Mixed economy|Mixed economies]] rely on the nation they are in to provide some goods or services, while the free market produces and maintains the rest.<ref name=":1" />
===
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.<ref>"Capitalism." World Book Encyclopedia. 1988. p. 194.</ref>
== Supply and demand ==
{{Main|Supply and demand}}
[[File:Supply-and-demand.svg|thumb|upright=1.15|The economic model of supply and demand states that the price P of a product is determined by a balance between production at each price (supply S) and the desires of those with [[purchasing power]] at each price (demand D): the diagram shows a positive shift in demand from D<sub>1</sub> to D<sub>2</sub>, resulting in an increase in price (P) and quantity sold (Q) of the product.]]
In capitalist economic structures, supply and demand is an [[economic model]] of [[price determination]] in a [[Market (economics)|market]]. It postulates that in a [[perfect competition|perfectly competitive market]], the [[unit price]] for a particular [[Good (economics)|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]] for price and [[Output (economics)|quantity]].
The "basic laws" of [[Supply (economics)|supply]] and [[demand]], as described by David Besanko and Ronald Braeutigam, are the following four:<ref name="besanko-and-braeutigam-2010">{{cite book |last1=Besanko |first1=David |last2=Braeutigam |first2=Ronald |year=2010 |title=Microeconomics |publisher=[[Wiley (publisher)|Wiley]] |edition=4th}}</ref>{{rp|37}}
# 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.<ref name="Boundless Economics 2017">{{cite web |title=Supply |website=Boundless Economics |date=13 June 2017 |url=https://courses.lumenlearning.com/boundless-economics/chapter/supply/ |access-date=27 October 2021}}</ref>
=== Demand schedule ===
A demand schedule, depicted graphically as the [[demand curve]], represents the amount of some [[Good (economics)|goods]] 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]]s and the price of [[complementary good]]s, remain the same. According to the [[law of demand]], the demand curve is almost always represented as downward sloping, meaning that as price decreases, consumers will buy more of the good.<ref name="axes">Unlike most [[Graph of a function|graphs]], 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.</ref>
Just like the supply curves reflect [[marginal cost]] curves, demand curves are determined by [[marginal utility]] curves.<ref>{{cite web|title=Marginal Utility and Demand |url=http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=marginal+utility+and+demand |access-date=9 February 2007 |archive-date=6 November 2006 |archive-url=https://web.archive.org/web/20061106121422/http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=marginal+utility+and+demand |url-status=live}}</ref>
=== Equilibrium ===
{{further|Economic equilibrium}}
In the context of supply and demand, economic equilibrium refers to a state where economic forces such as [[supply and demand]] are balanced and in the absence of external influences the ([[:wikt:equilibrium|equilibrium]]) values of economic variables will not change. For example, in the standard text-book model of [[perfect competition]] equilibrium occurs at the point at which quantity demanded and quantity supplied are equal.<ref>{{cite book |author-link=Hal Varian |first=Hal R. |last=Varian |title=Microeconomic Analysis |edition=Third |publisher=Norton |___location=New York |year=1992 |isbn=978-0-393-95735-8 |url=https://archive.org/details/microeconomicana00vari_0}}</ref> 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 [[Law of supply and demand|buyers]] is equal to the amount of goods or services produced by [[Law of supply and demand|sellers]]. This price is often called the competitive price or [[market clearing]] price and will tend not to change unless demand or supply changes.
=== Partial equilibrium ===
{{Main|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".<ref>{{cite book |last=Jain |first=T.R. |title=Microeconomics and Basic Mathematics |year=2006 |publisher=VK Publications |___location=New Delhi |isbn=978-81-87140-89-4 |page=28 |url=https://books.google.com/books?id=fUUoFwco2Z8C }}{{Dead link|date=January 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>
=== 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]] scholar [[Ibn Taymiyyah]], 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".<ref name=Hosseini>{{cite book |title=A Companion to the History of Economic Thought |chapter=Contributions of Medieval Muslim Scholars to the History of Economics and their Impact: A Refutation of the Schumpeterian Great Gap |last=Hosseini |first=Hamid S. |editor1-last=Biddle |editor1-first=Jeff E. |editor2-last=Davis |editor2-first=Jon B. |editor3-last=Samuels |editor3-first=Warren J. |year=2003 |publisher=Blackwell |___location=Malden, Massachusetts |isbn=978-0-631-22573-7 |doi=10.1002/9780470999059.ch3 |pages=28–45 [28 & 38]}} (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, 539–561).</ref>
[[File:AdamSmith.jpg|thumb|upright=0.6|left|[[Adam Smith]]]]
[[John Locke]]'s 1691 work ''Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money''<ref>John Locke (1691) [http://www.marxists.org/reference/subject/economics/locke/contents.htm ''Some Considerations on the consequences of the Lowering of Interest and the Raising of the Value of Money''] {{Webarchive|url=https://web.archive.org/web/20150324135856/https://www.marxists.org/reference/subject/economics/locke/contents.htm |date=24 March 2015 }}</ref> includes an early and clear description{{primary source inline|date=February 2022}} of supply and demand and their relationship. In this description, demand is [[Economic rent|rent]]: "The price of any commodity rises or falls by the proportion of the number of buyer and sellers" and "that which regulates the price... [of goods] is nothing else but their quantity in proportion to their rent".
[[David Ricardo]] titled one chapter of his 1817 work ''[[Principles of Political Economy and Taxation]]'' "On the Influence of Demand and Supply on Price".<ref name=Humphrey>Thomas M. Humphrey, 1992. "Marshallian Cross Diagrams and Their Uses before Alfred Marshall", ''Economic Review'', Mar/Apr, Federal Reserve Bank of Richmond, pp. [http://www.richmondfed.org/publications/research/economic_review/1992/pdf/er780201.pdf 3–23] {{Webarchive|url=https://web.archive.org/web/20121019100824/http://www.richmondfed.org/publications/research/economic_review/1992/pdf/er780201.pdf |date=19 October 2012 }}.</ref>
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]] in the course of "introduc[ing] the diagrammatic method into the English economic literature" published the first drawing of supply and demand curves therein,<ref>A.D. Brownlie and M.F. Lloyd Prichard, 1963. "Professor Fleeming Jenkin, 1833–1885 Pioneer in Engineering and Political Economy", ''Oxford Economic Papers'', 15(3), p. 211.</ref> including [[comparative statics]] from a shift of supply or demand and application to the labor market.<ref>Fleeming Jenkin, 1870. "The Graphical Representation of the Laws of Supply and Demand, and their Application to Labour", in Alexander Grant, ed., ''Recess Studies'', Edinburgh. Ch. VI, pp. 151–185. Edinburgh. Scroll to chapter [https://books.google.com/books?id=NC5BAAAAIAAJ link] {{Webarchive|url=https://web.archive.org/web/20200716052536/https://books.google.com/books?id=NC5BAAAAIAAJ |date=16 July 2020 }}.</ref> The model was further developed and popularized by [[Alfred Marshall]] in the 1890 textbook ''[[Principles of Economics (Marshall)|Principles of Economics]]''.<ref name="Humphrey" />
== Types ==
There are many variants of capitalism in existence that differ according to country and region.<ref>{{cite book |last1=Hall |first1=Peter A. |last2=Soskice |first2=David |title=Varieties Of Capitalism: The Institutional Foundations of Comparative Advantage |date=20 September 2001 |publisher=Oxford University Press, U.S.A. |isbn=0-19-924775-7}}</ref> They vary in their institutional makeup and by their economic policies. The common features among all the different forms of capitalism are 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, state capitalism and welfare capitalism. Other theoretical variants of capitalism include [[anarcho-capitalism]], [[community capitalism]], [[humanistic capitalism]], [[neo-capitalism]], [[state monopoly capitalism]], and [[technocapitalism]].
=== Advanced ===
{{Main|Advanced capitalism}}
Advanced capitalism is the situation that pertains to a society in which the capitalist model has been integrated and developed deeply and extensively for a prolonged period. Various writers identify [[Antonio Gramsci]] 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.<ref>Lears, T.J. Jackson (1985) "The Concept of Cultural Hegemony"</ref><ref>Holub, Renate (2005) ''Antonio Gramsci: Beyond Marxism and Postmodernism''</ref><ref>[[Carl Boggs|Boggs, Carl]] (2012) ''Ecology and Revolution: Global Crisis and the Political Challenge''</ref>
[[Jürgen Habermas]] 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.<ref>Habermas, 1988: 37, 75.</ref>
=== Corporate ===
{{Main|Corporate capitalism}}
{{See also|Crony capitalism|State monopoly capitalism}}
Corporate capitalism is a free or mixed-market capitalist economy characterized by the dominance of hierarchical and bureaucratic corporations.<ref>{{Cite journal |last=Barnett |first=H C |date=January 1981 |title=Crime and Delinquency |url=https://www.ojp.gov/ncjrs/virtual-library/abstracts/corporate-capitalism-corporate-crime |journal=[[Office of Justice Programs]]}}</ref>
=== Finance ===
{{Main|Finance capitalism}}
{{See also|Capitalist mode of production (Marxist theory)}}
Finance capitalism is the subordination of processes of [[Production (economics)|production]] to the accumulation of [[money]] profits in a [[financial system]]. In their critique of capitalism, [[Marxism]] and [[Leninism]] both emphasise the role of [[Financial capital|finance capital]] as the determining and [[ruling-class]] interest in capitalist society, particularly in the [[Crisis of capitalism|latter stages]].<ref>[[Imperialism, the Highest Stage of Capitalism]] [http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch03.htm ibid. Finance Capital and the Finance Oligarchy] {{Webarchive|url=https://web.archive.org/web/20150402214909/https://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch03.htm |date=2 April 2015 }}</ref><ref>{{cite magazine|url=http://monthlyreview.org/2009/10/01/monopoly-finance-capital-and-the-paradox-of-accumulation/|title= Monopoly-Finance Capital and the Paradox of Accumulation |first1=John Bellamy |last1=Foster |author1-link=John Bellamy Foster |first2=Robert W. |last2=McChesney |author2-link=Robert W. McChesney |date=1 October 2009 |magazine=[[Monthly Review]] |access-date=27 August 2016 |archive-date=28 August 2016 |archive-url=https://web.archive.org/web/20160828081218/http://monthlyreview.org/2009/10/01/monopoly-finance-capital-and-the-paradox-of-accumulation/ |url-status=live}}</ref>
[[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]] into ''[[Imperialism, the Highest Stage of Capitalism]]'' (1917), his analysis of the imperialist relations of the great world powers.<ref>Frederic Jameson, 'Culture and Finance Capital', in ''The Jameson Reader'' (2005) p. 257</ref> Lenin concluded that the banks at that time operated as "the chief nerve centres of the whole capitalist system of national economy".<ref>Quoted in E.H. Carr, ''The Bolshevik Revolution 2'' (1971) p. 137</ref> For the [[Comintern]] (founded in 1919), the phrase "dictatorship of finance capitalism"<ref>Quoted in F.A Voight, ''Unto Caesar'' (1938) p. 22</ref> 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.<ref>C. J.Calhoun/G. Derluguian, ''Business as Usual'' (2011) p. 57</ref>{{request quotation|date=December 2016}} [[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.<ref>Jameson, pp. 259–260</ref>
=== Free market ===
{{Main|Free-market capitalism}}
{{See also|Laissez-faire}}
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]] and are expected, by its adherents, to reach their point of [[Economic equilibrium|equilibrium]] without intervention by government policy. It typically entails support for highly [[Competition (economics)|competitive markets]] and [[private ownership]] of the [[means of production]].<ref>{{Cite web |last1=Jahan |first1=Sarwat |last2=Saber Mahmud |first2=Ahmed |title=What Is Capitalism? |url=https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Capitalism |website=[[International Monetary Fund]]}}</ref> ''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 (economics)|property rights]].<ref>{{Cite web |title=Laissez-faire |url=https://www.britannica.com/money/laissez-faire |website=[[Encyclopædia Britannica]]}}</ref> In [[Anarcho-capitalism|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.<ref>{{Cite web |title=Anarcho-capitalism |url=https://www.britannica.com/money/anarcho-capitalism |website=[[Encyclopædia Britannica]]}}</ref><ref>{{Cite web |last=Perumal J. |first=Prashanth |date=13 December 2023 |title=Understanding the debates around anarcho-capitalism |url=https://www.thehindu.com/specials/text-and-context/understanding-the-debates-around-anarcho-capitalism/article67631934.ece |url-status=unfit |archive-url=https://web.archive.org/web/20231213083528/https://www.thehindu.com/specials/text-and-context/understanding-the-debates-around-anarcho-capitalism/article67631934.ece |archive-date=13 December 2023 |website=[[The Hindu]]}}</ref>
[[Fernand Braudel]] argued that free market exchange and capitalism are to some degree opposed; free market exchange involves [[Perfect information|transparent]] public transactions and a large number of [[Perfect competition|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.<ref name=Braudel1977>{{cite book |last1=Braudel |first1=F. |author-link=Fernand Braudel |last2=Ranum |first2=P.M. |last3=Ranum |first3=P.P. |title=Afterthoughts on Material Civilization and Capitalism |publisher=[[Johns Hopkins University Press]] |series=Johns Hopkins symposia in comparative history |year=1977 |isbn=978-0-8018-1901-8 |url=https://books.google.com/books?id=1eVdAAAAIAAJ |access-date=6 April 2022 |pages=47–63}}</ref>
=== Mercantile ===
{{Main|Mercantilism}}
{{See also|Protectionism}}
[[File:Microcosm of London Plate 049 - Lloyd's Subscription Room edited.jpg|thumb|The subscription room at [[Lloyd's of London]] in the early 19th century]]
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 [[European colonization of the Americas|colonists living in America]] who were only allowed to trade with and purchase goods from their respective mother countries (e.g., United Kingdom, 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]].<ref>{{Cite web |title=Mercantilism |url=https://www.britannica.com/money/mercantilism |website=[[Encyclopædia Britannica]]}}</ref>
===
{{Main|Social market economy}}
{{See also|Nordic model}}
A social market economy is a free-market or mixed-market capitalist system, sometimes classified as a [[coordinated market economy]], 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]] through national [[collective bargaining]] arrangements.<ref>{{Cite journal |last=Müller-Armack |first=Alfred |date=28 July 2006 |title=The Social Market Economy as an Economic and Social order |url=https://www.tandfonline.com/doi/abs/10.1080/00346767800000020 |journal=[[Taylor & Francis]]|doi=10.1080/00346767800000020 |url-access=subscription }}</ref>
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 is the contemporary model of capitalism and adaptation of the social market model that exists in continental Western Europe today.<ref>{{Cite web |title=Rhenish Capitalism |url=https://www.oxfordreference.com/display/10.1093/oi/authority.20110803100418483 |website=[[Oxford University Press]]}}</ref>
=== State ===
{{Main|State capitalism}}
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]]. 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]], [[dirigisme]] and the economy of Norway.<ref>{{cite news |last=Musacchio |first=Aldo |url=http://www.economist.com/debate/days/view/802 |title=Economist Debates: State capitalism: Statements |newspaper=The Economist |access-date=20 June 2012 |archive-date=16 July 2012 |archive-url=https://web.archive.org/web/20120716050641/http://economist.com/debate/days/view/802 |url-status=live }}</ref> Alternatively, [[Merriam-Webster]] defines state capitalism as "an economic system in which private capitalism is modified by a varying degree of government ownership and control".<ref>[http://www.merriam-webster.com/dictionary/state%20capitalism State capitalism] {{Webarchive|url=https://web.archive.org/web/20150703131303/http://www.merriam-webster.com/dictionary/state%20capitalism |date=3 July 2015 }}. [[Merriam-Webster]]. Retrieved 7 July 2015.</ref>
In ''Socialism: Utopian and Scientific'', [[Friedrich Engels]] argued that state-owned enterprises would characterize the final stage of capitalism, consisting of ownership and management of large-scale production and communication by the [[Capitalist state|bourgeois state]].<ref>{{cite web |first=Frederick |last=Engels |author-link=Friedrich Engels |url=http://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm |title=Socialism: Utopian and Scientific (Chpt. 3) |publisher=[[Marxists Internet Archive]] |access-date=8 January 2014 |archive-date=9 May 2020 |archive-url=https://web.archive.org/web/20200509191523/https://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm |url-status=live}}</ref> In his writings, [[Vladimir Lenin]] characterized the economy of Soviet Russia as state capitalist, believing state capitalism to be an early step toward the development of [[socialism]].<ref>V.I. Lenin. [https://www.marxists.org/archive/lenin/works/1921/apr/21.htm The Tax in Kind] {{Webarchive|url=https://web.archive.org/web/20150907043921/https://www.marxists.org/archive/lenin/works/1921/apr/21.htm |date=7 September 2015 }}. ''Lenin's Collected Works'', 1st English ed., Progress Publishers, Moscow, 1965, vol. 32, pp. 329–365.</ref><ref>V.I. Lenin. [https://www.marxists.org/archive/lenin/works/1922/nov/14b.htm To the Russian Colony in North America] {{Webarchive|url=https://web.archive.org/web/20150618071802/https://www.marxists.org/archive/lenin/works/1922/nov/14b.htm |date=18 June 2015 }}. ''Lenin Collected Works'', Progress Publishers, 1971, Moscow, vol. 42, pp. 425c–427a.</ref>
Some economists and left-wing academics including [[Richard D. Wolff]] and [[Noam Chomsky]], as well as many Marxist philosophers and revolutionaries such as [[Raya Dunayevskaya]] and [[C.L.R. James]], argue that the economies of the former [[Soviet Union]] and Eastern Bloc represented a form of state capitalism because their internal organization within enterprises and the system of wage labor remained intact.<ref>[http://www.hetsa.org.au/pdf/34-A-08.pdf "State capitalism" in the Soviet Union] {{Webarchive|url=https://web.archive.org/web/20190728140836/https://www.hetsa.org.au/pdf/34-A-08.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.hetsa.org.au/pdf/34-A-08.pdf |archive-date=9 October 2022 |url-status=live |date=28 July 2019 }}, M.C. Howard and J.E. King</ref><ref>[[Noam Chomsky]] (1986). [http://www.chomsky.info/articles/1986----.htm The Soviet Union Versus Socialism] {{Webarchive|url=https://web.archive.org/web/20150924051230/http://www.chomsky.info/articles/1986----.htm |date=24 September 2015 }}. ''Our Generation''. Retrieved 9 July 2015.</ref><ref>[[Richard D. Wolff]] (27 June 2015). [http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees Socialism Means Abolishing the Distinction Between Bosses and Employees] {{Webarchive|url=https://web.archive.org/web/20180311070639/http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees |date=11 March 2018 }}. ''[[Truthout]].'' Retrieved 9 July 2015.</ref><ref>{{cite web|first1=Raya |last1=Dunayevskaya |author-link1=Raya Dunayevskaya |date=1941 |url=https://www.marxists.org/archive/dunayevskaya/works/1941/ussr-capitalist.htm |title=The Union of Soviet Socialist Republics is a Capitalist Society |website=[[Marxists Internet Archive]] |archive-url=https://web.archive.org/web/20191207212742/https://www.marxists.org/archive/dunayevskaya/works/1941/ussr-capitalist.htm |archive-date=7 December 2019}}</ref><ref>{{cite web|first1=C.L.R. |last1=James |author-link1=C.L.R. James |first2=Raya |last2=Dunayevskaya |author-link2=Raya Dunayevskaya |first3=Grace Lee |last3=Boggs |author-link3=Grace Lee Boggs |date=1950 |url=https://libcom.org/files/State%20capitalism%20and%20world%20revolution%20-%20CLR%20James.pdf |title=State Capitalism and World Revolution |archive-url=https://web.archive.org/web/20200619014753/https://libcom.org/files/State%20capitalism%20and%20world%20revolution%20-%20CLR%20James.pdf |archive-date=19 June 2020}}</ref>
The term is not used by [[Austrian School]] economists to describe state ownership of the means of production. The economist [[Ludwig von Mises]] 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.<ref>{{cite book|first=Ludwig |last=Von Mises |author-link=Ludwig Von Mises |title=Socialism: An Economic and Sociological Analysis |publisher=LibertyClassics |place=Indianapolis |year=1979 |isbn=978-0-913966-63-1 |url=https://archive.org/details/socialismeconomi00vonm |access-date=31 May 2007 |quote=The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state. Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name. The most recent slogan is 'State Capitalism.' It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the "classic" ideal of egalitarian Socialism. |url-access=registration}}</ref>
=== Political ===
{{Main|Political capitalism}}
Political capitalism or Politically oriented capitalism is a term coined by [[Max Weber]] in his 1921 book ''[[Economy and Society]]'' to describe monetary profit-making through non-market means.<ref>{{Cite book |last=Vahabi |first=Mehrdad |url=https://link.springer.com/book/10.1007/978-3-031-17674-6 |title=Destructive Coordination, Anfal and Islamic Political Capitalism |date=2023 |publisher=SpringerLink |isbn=978-3-031-17673-9 |page=XV |language=en |chapter=Prologue |doi=10.1007/978-3-031-17674-6}}</ref><ref>{{Cite journal |last1=Krieger |first1=Tim |last2=Meierrieks |first2=Daniel |date=2016-12-01 |title=Political capitalism: The interaction between income inequality, economic freedom and democracy |url=https://www.sciencedirect.com/science/article/abs/pii/S0176268016302282 |journal=European Journal of Political Economy |volume=45 |pages=115–132 |doi=10.1016/j.ejpoleco.2016.10.005 |issn=0176-2680|hdl=10419/125138 |hdl-access=free |url-access=subscription }}</ref> In 2015 [[Randall G. Holcombe]] described political capitalism as an [[economic system]] in which the sharp distinction between [[State (polity)|states]] and [[Market (economics)|markets]] is blurred.'''<ref>{{Cite web |last=Holcombe |first=Randall |date=2015-03-20 |title=Political Capitalism as a Distinct Economic System |url=https://www.masterresource.org/political-capitalism/political-capitalism/ |access-date=2025-04-21 |website=Master Resource |language=en}}</ref>'''<ref>{{Cite book |last=Holcombe |first=Randall G. |url=https://www.cambridge.org/core/books/political-capitalism/668D714DEEA375AF686E479535E1876A |title=Political Capitalism: How Economic and Political Power Is Made and Maintained |date=2018 |publisher=Cambridge University Press |isbn=978-1-108-47177-0 |series=Cambridge Studies in Economics, Choice, and Society |___location=Cambridge |doi=10.1017/9781108637251}}</ref>
=== Welfare ===
{{Main|Welfare capitalism}}
{{See also|Economic interventionism|Mixed economy}}
Welfare capitalism is capitalism that includes social welfare policies. Today, welfare capitalism is most often associated with the models of capitalism found in Central and Northern Europe such as the [[Nordic model]], [[social market economy]] and Rhine capitalism. 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]] and extensive regulation.<ref>{{Cite book |last=Esping-Andersen |first=Gøsta |title=[[The Three Worlds of Welfare Capitalism]] |publisher=[[Princeton University Press]] |year=1990 |isbn=9780691028576}}</ref>
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]] through macroeconomic policies intended to correct [[market failure]]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]] also featured a degree of [[Indicative planning|indirect economic planning]] over a largely capitalist-based economy.
Most modern capitalist economies are defined as mixed economies to some degree<ins>,</ins> however French economist [[Thomas Piketty]] stated in 2013 that capitalist economies might shift to a much more ''laissez-faire'' approach in the near future.<ref>{{Cite book |last=Piketty |first=Thomas |title=Le capital au XXIe siècle |year=2013 |isbn=978-2-02-108228-9 |pages=799, 800 |language=fr |chapter=Repenser l'impôt progressif sur le revenu |publisher=Éditions du Seuil |trans-chapter=To rethink income tax progressivity |quote=Si cette régressivité fiscale au sommet de la hiérarchie sociale devait se confirmer et s'amplifier à l'avenir, [...] il est bien évident qu'une telle sécession fiscale des plus riches [avec les autres classes] est potentiellement extrêmement dommageable pour le consentement fiscal dans son ensemble [qui] s'en trouve amoindri [...]. Il est vital pour l'État social moderne que le système fiscal qui le sous-tend conserve un minimum de progressivité. |trans-quote=If tax regressivity on top of the social hierarchy may settle in and escalate in the future, it is obvious that such a tax secession between the richest and the other classes will be highly harmful towards the agreement over the taxation system which will weaken. It is essential for the modern social system that the taxation system preserve a sort of tax progressivity.}}</ref>
=== Eco-capitalism ===
[[Eco-capitalism]], also known as "environmental capitalism" or (sometimes<ref>{{cite news|url=https://www.theguardian.com/world/2019/nov/24/b-corps-captalism-for-an-environmentally-endangered-age |title=Green capitalism sometimes also referring to sustainable businesses |first=Oliver |last=Balch |date=24 November 2019 |work=[[The Guardian]]}}</ref>) "green capitalism", is the view that [[capital (economics)|capital]] exists in nature as "[[natural capital]]" ([[ecosystem]]s that have [[ecological yield]]) on which all [[wealth]] depends. Therefore, governments should use [[Market (economics)|market-based]] [[policy instruments|policy-instruments]] (such as a [[carbon tax]]) to resolve [[environmental problem]]s.<ref>{{cite web|title=Definition of Eco-Capitalism |url=https://www.collinsdictionary.com/dictionary/english/eco-capitalism |website=collinsdictionary.com |access-date= 27 November 2015}}</ref>
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 [[Eco-socialism|Red Greens]].<ref>{{cite web |title=The rise of green capitalism |url=http://roadtoparis.info/top-list/rise-green-capitalism/ |website=roadtoparis.info |access-date=27 November 2015 |archive-date=28 April 2015 |archive-url=https://web.archive.org/web/20150428134122/http://roadtoparis.info/top-list/rise-green-capitalism/ |url-status=dead }}</ref>{{request quotation|date=August 2019}}
=== Sustainable capitalism ===
[[Sustainable capitalism]] is a conceptual form of capitalism based upon [[Sustainability|sustainable]] practices that seek to preserve humanity and the planet, while reducing [[Externality|externalities]] and bearing a resemblance of capitalist [[economic policy]]. A capitalistic economy must expand to survive and find new markets to support this expansion.<ref>{{cite book |doi=10.1109/IPCC.2011.6087226 |chapter=The convergence of sustainable capitalism |title=2011 IEEE International Professional Communication Conference |pages=1–7 |year=2011 |last1=Mitra |first1=Basavadatta |last2=Gadhok |first2=Saagar |last3=Salhotra |first3=Shivam |last4=Agarwal |first4=Sakshi |isbn=978-1-61284-779-5 |s2cid=31292223 }}</ref> 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 [[resource depletion|replenishing of resources]].<ref>{{cite journal |last1=Schweickart |first1=David |title=Is Sustainable Capitalism an Oxymoron? |journal=Perspectives on Global Development and Technology |date=1 January 2009 |volume=8 |issue=2–3 |pages=559–580 |doi=10.1163/156914909X424033 }}</ref> Sustainability is often thought of to be related to [[environmentalism]], 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.<ref name=":2">{{Cite book |title=Sustainable Capitalism and the Pursuit of Well-Being.|last=E.|first=Harrison, Neil|date=1 January 2013|publisher=Routledge|isbn=978-1-306-21804-7|oclc=866837827}}{{page needed|date=March 2019}}</ref>
This is a concept of capitalism described in [[Al Gore]] and [[David Blood]]'s manifesto for the [[Generation Investment Management]] to describe a long-term political, economic and social structure which would mitigate current threats to the planet and society.<ref name="genfound">{{Cite web |last1=Gore |first1=Al |last2=Blood |first2=David |title=A Manifesto for Sustainable Capitalism |url=https://www.genfound.org/media/pdf-wsj-manifesto-sustainable-capitalism-14-12-11.pdf |url-status=dead |archive-url=https://web.archive.org/web/20140124005644/https://www.genfound.org/media/pdf-wsj-manifesto-sustainable-capitalism-14-12-11.pdf |archive-date=24 January 2014 |access-date=24 October 2022 |website=Generation Foundation}}</ref> According to their manifesto, sustainable capitalism would integrate the environmental, social and governance ([[Environmental, social and corporate governance|ESG]]) aspects into risk assessment in attempt to limit externalities.<ref name=":0b">{{Cite web|url=https://www.generationim.com/media/pdf-generation-sustainable-capitalism-v1.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.generationim.com/media/pdf-generation-sustainable-capitalism-v1.pdf |archive-date=9 October 2022 |url-status=live|title=Sustainable Capitalism|access-date=18 February 2017}}</ref> 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.<ref name="genfound" />
== Capital accumulation ==
{{Main|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]] 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]]. Capital accumulation forms the basis of capitalism, where economic activity is structured around the accumulation of [[Capital (economics)|capital]], defined as investment in order to realize a financial profit.<ref name="Economist definition">{{cite news | title = Economics A–Z: ''Capital'' | url = http://www.economist.com/economics-a-to-z/c#node-21529870 | website = [[economist.com|The Economist]] | access-date = 25 March 2015 | archive-date = 7 August 2017 | archive-url = https://web.archive.org/web/20170807235225/http://www.economist.com/economics-a-to-z/c#node-21529870 | url-status = live }}</ref> 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).<ref name="MIA definition">{{cite web | title = Encyclopedia of Marxism – Glossary of terms: ''Capital'' | url = http://marxists.org/glossary/terms/c/a.htm#capital | website = [[Marxists Internet Archive]] | access-date = 25 March 2015 | archive-date = 18 June 2015 | archive-url = https://web.archive.org/web/20150618083941/https://www.marxists.org/glossary/terms/c/a.htm#capital | url-status = live }}</ref>
In mainstream [[economics]], [[accounting]] and [[Marxian economics]], capital accumulation is often equated with [[investment (macroeconomics)|investment]] of profit income or savings, especially in [[real vs. nominal in economics|real]] capital goods. The concentration and centralisation of capital are two of the results of such accumulation. In modern [[macroeconomics]] and [[econometrics]], the phrase "[[capital formation]]" is often used in preference to "accumulation", though the [[United Nations Conference on Trade and Development]] (UNCTAD) refers nowadays to "accumulation". The term "accumulation" is occasionally used in [[national accounts]].
== Wage labor ==
{{Main|Wage labour}}
[[File:Worker 9.JPG|thumb|An industrial worker among heavy steel machine parts (Kinex Bearings, [[Bytča]], [[Slovakia]], {{Circa|1995}}–2000)]]
Wage labor refers to the sale of [[Labour economics|labor]] under a formal or informal [[employment contract]] to an [[employer]].{{sfn|Steinfeld|2009|p=3}} These transactions usually occur in a [[labour market|labor market]] where [[wage]]s are market determined.{{sfn|Deakin|Wilkinson|2005}}{{sfn|Marx|1990|p=1005}} 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.<ref name="Williams 1983 51" /> [[Labor (economics)|Labor]] includes all physical and mental human resources, including entrepreneurial capacity and management skills, which are required to produce products and services. [[Production (economics)|Production]] is the act of making goods or services by applying [[labor power]].<ref>Ragan, Christopher T.S.; Lipsey, Richard G. ''Microeconomics''. 12th Canadian ed. Toronto, Pearson Education, 2008. {{ISBN|978-0-321-31491-8}}</ref><ref>Robbins, Richard H. ''Global problems and the culture of capitalism''. Boston: Allyn & Bacon, 2007. {{ISBN|978-0-205-52487-7}}</ref>
==
{{Main|Criticism of capitalism}}
[[File:Anti-capitalism color— Restored.png|thumb|The [[Industrial Workers of the World]] poster "[[Pyramid of Capitalist System]]" (1911)]]
Criticism of capitalism comes from various political and philosophical approaches, including [[anarchist]], [[socialist]], [[religious]] and [[nationalist]] viewpoints.<ref>{{cite book|last=Tormey|first=Simon|title=Anticapitalism|publisher=One World Publications|year=2004|page=10|isbn=978-1-78074-250-2}}</ref> 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 [[Reformism|political reforms]].<ref>{{cite book|title=Book: Sociology (Boundless)|chapter=16.1C: The Marxist Critique of Capitalism|url=https://socialsci.libretexts.org/@go/page/8462|date=16 December 2020|publisher=LibreTexts|access-date=21 October 2021|quote=Revolutionary socialists believe that capitalism can only be overcome through revolution. Social democrats believe that structural change can come slowly through political reforms to capitalism.}}</ref><ref name="The Cambridge History of Communism p.">{{cite book | editor-last=Pons | editor-first=Silvio | editor-last2=Smith | editor-first2=Stephen A. | title=The Cambridge History of Communism | publisher=Cambridge University Press | date=21 September 2017 | isbn=978-1-316-13702-4 | doi=10.1017/9781316137024 | pages=49–73}}</ref>
Critiques of capitalism allege that it is inherently [[Exploitation of labour|exploitative]],<ref name="competition">{{cite web|url=http://www.marxists.org/archive/marx/works/1845/condition-working-class/ch05.htm|title=Competition – The Condition of the Working Class in England|last=Engels|first=Frederick|access-date=10 March 2008}}</ref><ref name="stanfordexploitation">{{Cite web|date=20 December 2001|title=Exploitation|url=https://plato.stanford.edu/entries/exploitation/|url-status=live|archive-url=https://web.archive.org/web/20201127091753/https://plato.stanford.edu/entries/exploitation/|archive-date=27 November 2020|access-date=26 December 2020|website=[[Stanford Encyclopedia of Philosophy]]}}</ref><ref>{{cite book |last=Mattei|first=Clara E.|date=2022 |title=The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism|pages=17–18|url=https://press.uchicago.edu/ucp/books/book/chicago/C/bo181707138.html|___location= |publisher=[[University of Chicago Press]]|isbn=978-0-226-81839-9}}</ref> [[Marx's theory of alienation|alienating]],<ref>"Alienation." Pp. 10. in ''A Dictionary of Philosophy'' (rev. 2nd ed.). 1984.</ref> [[unstable]],<ref name="onfreetrade">{{cite web|url=http://www.marxists.org/archive/marx/works/1888/free-trade/index.htm|title=On the Question of Free Trade|last=Engels|first=Frederick|access-date=11 March 2008}}</ref><ref name="isrcrisis">{{cite web|url=http://www.isreview.org/issues/32/crisis_theory.shtml|title=Marx's Theory of Economic Crisis|last=Easterling|first=Earl|publisher=International Socialist Review|access-date=13 March 2008|archive-date=27 February 2021|archive-url=https://web.archive.org/web/20210227033442/https://isreview.org/issues/32/crisis_theory.shtml|url-status=dead}}</ref> [[unsustainable]],<ref name="extinction">{{cite book|last=Dawson|first=Ashley|author-link=Ashley Dawson|title=Extinction: A Radical History|date=2016|publisher=[[OR Books]]|url=http://www.orbooks.com/catalog/extinction-by-ashley-dawson/|page=41|isbn=978-1-944869-01-4|access-date=20 August 2016|archive-date=17 September 2016|archive-url=https://web.archive.org/web/20160917203814/http://www.orbooks.com/catalog/extinction-by-ashley-dawson/|url-status=live}}</ref><ref>{{Cite web |last=Nelson |first=Anitra |date=31 January 2024 |title=Degrowth as a Concept and Practice : Introduction |url=https://commonslibrary.org/degrowth-as-a-concept-and-practice-introduction/ |access-date=24 February 2024 |website=The Commons Social Change Library |language=en-AU}}</ref><ref>{{cite journal |title=Earth at risk: An urgent call to end the age of destruction and forge a just and sustainable future |journal=PNAS Nexus |date=4 April 2024 |volume=3 |issue=4 |doi=10.1093/pnasnexus/pgae106 |url=https://academic.oup.com/pnasnexus/article/3/4/pgae106/7638480?login=false |access-date=4 April 2024|pmc=10986754 |last1=Fletcher |first1=Charles |last2=Ripple |first2=William J. |last3=Newsome |first3=Thomas |last4=Barnard |first4=Phoebe |last5=Beamer |first5=Kamanamaikalani |last6=Behl |first6=Aishwarya |last7=Bowen |first7=Jay |last8=Cooney |first8=Michael |last9=Crist |first9=Eileen |last10=Field |first10=Christopher |last11=Hiser |first11=Krista |last12=Karl |first12=David M. |last13=King |first13=David A. |last14=Mann |first14=Michael E. |last15=McGregor |first15=Davianna P. |last16=Mora |first16=Camilo |last17=Oreskes |first17=Naomi |last18=Wilson |first18=Michael |pages=pgae106 |pmid=38566756 }}</ref> and [[Economic efficiency|economically inefficient]]<ref>{{cite book|url=https://books.google.com/books?id=BlEpAQAAMAAJ|title=Beyond the Profits System: Possibilities for a post-capitalist era|last=Shutt|first=Harry|date=March 2010|publisher=Zed Books|isbn=978-1-84813-417-1}}</ref><ref name="isrwaste">{{cite web|url=http://www.isreview.org/issues/53/garbage.shtml|title=The Conquest of Garbage|last=Rogers|first=Heather|website=isreview.org|publisher=International Socialist Review (1997)|access-date=13 March 2008|archive-date=10 May 2021|archive-url=https://web.archive.org/web/20210510142346/http://www.isreview.org/issues/53/garbage.shtml|url-status=dead}}</ref><ref name="part6">{{cite web|url=http://www.chass.utoronto.ca/~reak/eco100/100_6.htm|title=Monopoly, Imperfect Competition, and Oligopoly|last=Rea|first=K.J.|access-date=11 March 2008|archive-date=12 June 2010|archive-url=https://web.archive.org/web/20100612201706/http://www.chass.utoronto.ca/~reak/eco100/100_6.htm|url-status=dead}}</ref>—and that it creates massive [[economic inequality]],<ref name="King 2021">{{cite web|last=King|first=Matthew Wilburn|title=Why the next stage of capitalism is coming|website=BBC Future|date=25 May 2021|url=https://www.bbc.com/future/article/20210525-why-the-next-stage-of-capitalism-is-coming|access-date=21 October 2021}}</ref><ref>{{cite book |last1=Ghodsee|first1=Kristen|last2=Orenstein|first2=Mitchell A.|author-link1=Kristen Ghodsee|date=2021|title=Taking Stock of Shock: Social Consequences of the 1989 Revolutions|publisher=[[Oxford University Press]]|page=192|doi=10.1093/oso/9780197549230.001.0001 |isbn=978-0-19-754924-7|quote=Without an accompanying welfare state in which social programs funded by a progressive income tax redistribute from the rich to the poor, capitalism can be a deeply unfair system where a small, well-connected elite captures a majority of the wealth and power, and not necessarily through meritocratic processes.}}</ref> [[commodity|commodifies]] people,<ref name="openDemocracy">{{cite web | title=Commodification: the essence of our time | website=openDemocracy | url=https://www.opendemocracy.net/en/opendemocracyuk/commodification-essence-of-our-time/ | access-date=21 October 2021 | author= Colin Leys | date = 2 April 2021}}</ref><ref name="Renegade Inc 2019">{{cite web | title=The Commodification of Everything | website=Renegade Inc | date=25 August 2019 | url=http://renegadeinc.com/the-commodification-of-everything/ | access-date=21 October 2021 | author=Daniel Margrain | archive-date=21 October 2021 | archive-url=https://web.archive.org/web/20211021224916/https://renegadeinc.com/the-commodification-of-everything/ | url-status=dead }}</ref> [[environmental degradation|degrades the environment]],<ref name="extinction" /><ref>{{cite book|last=Hickel|first=Jason|author-link=Jason Hickel|title=Less is More: How Degrowth Will Save the World |year=2021|publisher=Windmill Books|pages=39–40|isbn=978-1-78609-121-5|quote=It was only with the rise of capitalism over the past few hundred years, and the breathtaking acceleration of industrialization from the 1950s, that on a planetary scale things began to tip out of balance.}}</ref> is [[undemocratic]],<ref>{{cite journal |last1=Sullivan |first1=Dylan |last2=Hickel|first2=Jason|author-link2=Jason Hickel|date=2023 |title=Capitalism and extreme poverty: A global analysis of real wages, human height, and mortality since the long 16th century|url= |journal=[[World Development (journal)|World Development]]|volume=161 |issue= |article-number=106026 |doi=10.1016/j.worlddev.2022.106026|access-date=|doi-access=free|quote=Capitalism is a highly productive system, but it is also undemocratic: decisions about what to produce and how to use surplus are determined by the few who own and control the means of production. For capital, the purpose of production is not primarily to meet human needs, as we might expect in a more democratic system, but rather to extract and accumulate profit.}}</ref><ref name="Merkel pp. 109–128">{{cite journal | last=Merkel | first=Wolfgang | title=Is capitalism compatible with democracy? | journal=Zeitschrift für Vergleichende Politikwissenschaft | publisher=Springer Science and Business Media LLC | volume=8 | issue=2 | date=26 July 2014 | issn=1865-2646 | doi=10.1007/s12286-014-0199-4 | pages=109–128| hdl=10419/270951 | s2cid=150776013 | hdl-access=free }}</ref><ref name="Reich 2009">{{cite web | last=Reich | first=Robert B. | title=How Capitalism Is Killing Democracy | website=Foreign Policy | date=12 October 2009 | url=https://foreignpolicy.com/2009/10/12/how-capitalism-is-killing-democracy/ | access-date=21 October 2021}}</ref><ref>{{cite book |last=Slobodian|first=Quinn |author-link=Quinn Slobodian|date=2023 |title=Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy|url=https://books.google.com/books?id=tIlrEAAAQBAJ&pg=PT10|___location= |publisher=[[Henry Holt and Company|Metropolitan Books]]|page=10 |isbn=978-1-250-75389-2}}
</ref> embeds [[uneven and combined development|uneven]] and [[underdevelopment]] between nation states,<ref>{{cite journal |last1=Patnaik |first1=Utsa |title='Neo-Marxian' Theories of Capitalism and Underdevelopment: Towards a Critique |journal=Social Scientist |date=1982 |volume=10 |issue=11 |pages=3–32 |doi=10.2307/3516858 |jstor=3516858 |url=https://www.jstor.org/stable/3516858 |issn=0970-0293|url-access=subscription }}</ref><ref>{{cite journal |last1=Warke |first1=Thomas W. |title=The Marxian Theory of Underdevelopment: A Review Article |journal=The Journal of Developing Areas |date=1973 |volume=7 |issue=4 |pages=699–710 |url=https://www.jstor.org/stable/4190085#:~:text=it%20is%20Lenin%20who%20laid,modern%20Marxian%20theory%20of%20underdevelopment.&text=and%20tends%20to%20perpetuate%20the,masses%20in%20the%20backward%20country.&text=world%20production%20and%20trade%20and,dualisms%20within%20under%2D%20developed%20economies. |issn=0022-037X}}</ref><ref>{{cite journal |last1=Martins |first1=Carlos Eduardo |title=The Longue Durée of the Marxist Theory of Dependency and the Twenty-First Century |journal=Latin American Perspectives |date=January 2022 |volume=49 |issue=1 |pages=18–35 |doi=10.1177/0094582X211052029 |url=https://journals.sagepub.com/doi/10.1177/0094582X211052029 |language=en |issn=0094-582X|url-access=subscription }}</ref><ref>{{cite journal |last1=Peck |first1=Jamie |last2=Varadarajan |first2=Latha |title=Uneven Regional Development |journal=International Encyclopedia of Geography: People, the Earth, Environment and Technology |date=6 March 2017 |pages=1–13 |doi=10.1002/9781118786352.wbieg0721 |url=https://onlinelibrary.wiley.com/doi/abs/10.1002/9781118786352.wbieg0721 |publisher=John Wiley & Sons, Ltd |isbn=9780470659632 |language=en|url-access=subscription }}</ref> and leads to an erosion of [[human rights]]<ref>{{cite journal|last=Abeles|first=Marc|date=2006|title=Globalization, Power, and Survival: an Anthropological Perspective|url=https://halshs.archives-ouvertes.fr/halshs-00125880/file/M_Abeles_2006_AQ.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://halshs.archives-ouvertes.fr/halshs-00125880/file/M_Abeles_2006_AQ.pdf |archive-date=9 October 2022 |url-status=live|journal=Anthropological Quarterly|volume=79|issue=3|pages=484–486|doi=10.1353/anq.2006.0030|s2cid=144220354}}</ref> because of its [[wikt:incentivize|incentivization]] of [[imperialist]] expansion and [[military–industrial complex|war]].<ref>{{cite journal|last=Farid|first=Hilmar|date=2005|title=Indonesia's original sin: mass killings and capitalist expansion, 1965–66|journal=[[Inter-Asia Cultural Studies]]|volume=6|issue=1|pages=3–16|doi=10.1080/1462394042000326879|s2cid=145130614}}</ref><ref>{{cite book|last=Blakeley|first=Ruth|date=2009|title=State Terrorism and Neoliberalism: The North in the South|url=http://www.routledge.com/books/details/9780415462402/|publisher=[[Routledge]]|pages=[https://books.google.com/books?id=rft8AgAAQBAJ&pg=PA4 4], [https://books.google.com/books?id=rft8AgAAQBAJ&pg=PA20 20–23], [https://books.google.com/books?id=rft8AgAAQBAJ&lpg=PA92&pg=PA85#v=onepage&q&f=false 85–96]|isbn=978-0-415-68617-4}}</ref><ref>''Lenin's Selected Works'', Progress Publishers, 1963, Moscow, Volume 1, pp. 667–766</ref><ref>{{cite book |last1=Bevins |first1=Vincent|author-link=Vincent Bevins |title= [[The Jakarta Method|The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World]]|date=2020 |publisher= [[PublicAffairs]]|pages=240–241 |isbn= 978-1541742406|quote=Maybe, the countries of the developing world would have been able to come together and insist on changing the rules of global capitalism. Perhaps many of these countries would not be capitalist at all.}}</ref>
Other critics argue that such inequities are not due to the ethic-neutral construct of the economic system commonly known as capitalism, but to the ethics of those who shape and execute the system. For example, some contend that Milton Friedman's (human) ethic of 'maximizing shareholder value' creates a harmful form of capitalism,<ref>{{Cite book |last=Stout |first=Lynn |author-link=Lynn Stout |title=The Shareholder Value Myth |publisher=Berrett-Koehler Publishers, Inc. |year=2012 |isbn=978-1-60509-813-5 |___location=San Francisco, CA |pages=15–23}}</ref><ref>{{Cite book |last=Gelles |first=David |author-link=David Gelles |title=The Man Who Broke Capitalism |publisher=Simon & Schuster |year=2022 |isbn=978-1-9821-7644-0 |___location=New York |pages=1–13}}</ref> while a [[Millard Fuller]] or John Bogle (human) ethic of 'enough' creates a sustainable form.<ref>{{Cite book |last=Fuller |first=Millard |author-link=Millard Fuller|title=The Theology of the Hammer |publisher=Smyth & Helwys Publishing |year=1994 |isbn=1-880837-92-7 |___location=Macon, GA |pages=31–39}}</ref><ref>{{Cite book |last=Bogle |first=John |title=Enough |publisher=John Wiley & Sons |year=2009 |isbn=978-0-470-52423-7 |___location=Hoboken, New Jersey |pages=229–248}}</ref> Equitable ethics and unified ethical decision-making is theorized to create a less damaging form of capitalism.<ref>{{Cite book |last=Knowlton & Hedges |title=Better Capitalism |publisher=Wipf & Stock Publishers |year=2021 |isbn=978-1-7252-8093-9 |___location=Eugene, OR |pages=34–37, 235–242}}</ref> [[Jason Hickel]] and Dylan Sullivan contend that inequality has always and will continue to exist under capitalism because capital accumulation requires access to cheap labor, and lots of it, as without it the system would collapse.<ref name="Monthly Review">{{Cite web |last1=Hickel |first1=Jason |last2=Sullivan|first2=Dylan|date=2023-07-01 |title=Capitalism, Global Poverty, and the Case for Democratic Socialism |url=https://monthlyreview.org/2023/07/01/capitalism-global-poverty-and-the-case-for-democratic-socialism/ |access-date=2025-07-22 |website=[[Monthly Review]] |language=en-US|quote=Capital accumulation requires cheap labor, however, and these concessions would have brought capitalism in the core to its knees were it not for the fact that capitalists were able to obtain cheap labor instead in the periphery, through colonial and neocolonial forms of appropriation, which continue to this day.}}</ref><ref>{{cite book|last=Hickel|first=Jason|author-link=Jason Hickel|title=Less is More: How Degrowth Will Save the World |year=2021|publisher=Windmill Books|page=47|isbn=978-1-78609-121-5|quote=But the rise of capitalism also depended on something else. It needed labour. Lots of it, and cheap. [[Enclosure]] solved this problem too. With subsistence economies destroyed and commons fenced off, people had no choice but to sell their labour for wages - not to earn a bit of extra income, as under the previous regime, nor to satisfy the demands of a lord, as under serfdom, but simply in order to survive. They became, in a word, [[proletarians]].}}</ref>
[[Inheritance]] has been argued to not be a fundamental part of capitalism,<ref name="x107">{{cite journal | last=Haslett | first=D. W. | title=Is Inheritance Justified? | journal=Philosophy & Public Affairs | publisher=Wiley | volume=15 | issue=2 | year=1986 | issn=0048-3915 | jstor=2265382 | pages=122–155 | url=http://www.jstor.org/stable/2265382 | access-date=17 August 2024}}</ref> instead part of [[nepotism]].<ref name="e543">{{cite journal | last=Pérez-González | first=Francisco | title=Inherited Control and Firm Performance | journal=American Economic Review | volume=96 | issue=5 | date=1 November 2006 | issn=0002-8282 | doi=10.1257/aer.96.5.1559 | pages=1559–1588}}</ref>
== See also ==
{{cols|colwidth=16em}}
* ''[[A Failure of Capitalism]]''
* [[Ancient economic thought]]
* [[Bailout Capitalism]]
* [[Christian views on poverty and wealth]]
* [[Corporatocracy]]
* [[Economic sociology]]
* [[Global financial crisis in September 2008]]
* [[Humanistic economics]]
* [[Invisible hand]]
* [[Late stage capitalism]]
* ''[[Le Livre noir du capitalisme]]''
* [[Peak capitalism]]
* [[Perestroika]]
* [[Post-Fordism]]
* [[Racial capitalism]]
* [[Rent-seeking]]
* [[Self-made man]]
* [[Surveillance capitalism]]
{{colend}}
==
{{reflist}}
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{{refend}}
== Further reading ==
{{refbegin|30em}}
* [[Gar Alperovitz|Alperovitz, Gar]] (2011). ''America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy, 2nd Edition.'' Democracy Collaborative Press. {{ISBN|0-9847857-0-1}}.
* {{cite book|last1=Altvater |first1=Elmar |last2=Crist|first2=Eileen|last3=Haraway|first3=Donna|author3-link=Donna Haraway|last4=Hartley|first4=Daniel|last5=Parenti|first5=Christian|last6=McBrien|first6=Justin|last7=Moore|first7=Jason|title=Anthropocene or Capitalocene? Nature, History, and the Crisis of Capitalism|date=2016|publisher=PM Press|isbn=978-1-62963-148-6}}
* Ascher, Ivan. ''Portfolio Society: On the Capitalist Mode of Prediction.'' Zone Books, 2016. {{ISBN|978-1935408741}}
* [[
* {{cite book | first = Richard | last = Barbrook | year = 2006 | title = The Class of the New | edition = paperback | publisher = OpenMute | ___location = London | isbn = 978-0-9550664-7-4 | url = http://www.theclassofthenew.net | access-date = 11 June 2019 | archive-url = https://web.archive.org/web/20180801045453/http://www.theclassofthenew.net/ | archive-date = 1 August 2018 | url-status = dead }}
* {{cite book|last1= Block |first1= Fred |author1-link= Fred L. Block |last2= Somers |first2= Margaret R. |year= 2014|title= The Power of Market Fundamentalism: Karl Polanyi's Critique|___location= Cambridge, MA |publisher= Harvard University Press|isbn= 978-0-674-05071-6}}
* [[Fernand Braudel|Braudel, Fernand]]. ''Civilization and Capitalism, 15th-18th Century'', 3 volumes.
* Callinicos, Alex. "Wage Labour and State Capitalism – A reply to Peter Binns and Mike Haynes", ''International Socialism'', 2nd series, 12, Spring 1979.
* {{cite book |last1=Case |first1=Anne |last2=Deaton |first2=Angus |author-link1=Anne Case |author-link2=Angus Deaton |date=2020 |title=Deaths of Despair and the Future of Capitalism |url=https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism |publisher=[[Princeton University Press]] |isbn=978-0-691-19078-5 |access-date=6 March 2020 |archive-date=7 March 2020 |archive-url=https://web.archive.org/web/20200307062358/https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism |url-status=live }}
* Farl, Erich. "The Genealogy of State Capitalism". In: ''International'' London, vol. 2, no. 1, 1973.
* {{cite book |last=Fisher|first=Mark |author-link=Mark Fisher|date=2009 |title=[[Capitalist Realism|Capitalist Realism: Is There No Alternative?]]|___location= |publisher= [[John Hunt Publishing]]|isbn=978-1-84694-317-1}}
* Gough, Ian. ''[http://www.newleftreview.org/?view=558 State Expenditure in Advanced Capitalism] {{Webarchive|url=https://web.archive.org/web/20120207145856/http://www.newleftreview.org/?view=558 |date=7 February 2012 }}'' New Left Review.
* [[Jürgen Habermas|Habermas, J.]] [1973] ''[[Legitimation Crisis]]'' (eng. translation by T. McCarthy). Boston, Beacon. [https://books.google.com/books?id=3WFy6vsyLNEC From Google books] {{Webarchive|url=https://web.archive.org/web/20151120102451/https://books.google.com/books?id=3WFy6vsyLNEC |date=20 November 2015 }}; [https://web.archive.org/web/20090714123532/http://www.cf.ac.uk/socsi/undergraduate/introsoc/legitcri.html excerpt].
* {{cite book | last = Harvey | first = David | author-link = David Harvey | title = Seventeen Contradictions and the End of Capitalism | publisher= Oxford University Press| year = 2014 | isbn = 978-0-19-936026-0}}
* [[Louis Hyman|Hyman, Louis]] and [[Edward E. Baptist]] (2014). ''American Capitalism: A Reader.'' Simon & Schuster. {{ISBN|978-1-4767-8431-1}}.
* {{cite book |last1=Ingham |first1=Geoffrey |title=Capitalism: With a New Postscript on the Financial Crisis and Its Aftermath |date=2008 |publisher=[[Polity Press]] |___location=Cambridge |isbn=9780745636481}}
* {{cite book | year= 2007 | last1= James | first1= Paul | author-link= Paul James (academic) | last2= Patomäki | first2= Heikki | title= Globalization and Economy, Vol. 2: Global Finance and the New Global Economy | url= https://www.academia.edu/4211923 | publisher= SAGE Publications | ___location= London | access-date= 28 January 2018 | archive-date= 23 September 2020 | archive-url= https://web.archive.org/web/20200923063542/https://www.academia.edu/4211923/Globalization_and_Economy_Vol_2_Global_Finance_and_the_New_Global_Economy_2007_ | url-status= live }}
* {{cite book | year= 2007 | last1= James | first1= Paul | author-link= Paul James (academic) | last2= Palen | first2= Ronen | title= Globalization and Economy, Vol. 3: Global Economic Regimes and Institutions | url= https://www.academia.edu/4251331 | publisher= Sage Publications | ___location= London | access-date= 28 January 2018 | archive-date= 23 September 2020 | archive-url= https://web.archive.org/web/20200923063542/https://www.academia.edu/4251331/Globalization_and_Economy_Vol_3_Global_Economic_Regimes_and_Institutions_2007_ | url-status= live }}
* {{cite book | year= 2007 | last1= James | first1= Paul | author-link= Paul James (academic) | last2= O'Brien | first2= Robert | title= Globalization and Economy, Vol. 4: Globalizing Labour | url= https://www.academia.edu/4303461 | publisher= Sage Publications | ___location= London | access-date= 28 January 2018 | archive-date= 23 September 2020 | archive-url= https://web.archive.org/web/20200923063543/https://www.academia.edu/4303461/Globalization_and_Economy_Vol_4_Globalizing_Labour_2007_ | url-status= live }}
* Jameson, Fredric (1991). ''[[Postmodernism, or, the Cultural Logic of Late Capitalism]]''.
* {{cite book |last1=Kocka |first1=Jürgen |author-link=Jürgen Kocka |title=Capitalism: A Short History |date=2016 |publisher=[[Princeton University Press]] |___location=Princeton |isbn=978-0691165226}}
* Kotler, Philip (2015). ''Confronting Capitalism: Real Solutions for a Troubled Economic System.'' AMACOM. {{ISBN|978-0814436455}}
* Mandel, Ernest (1999). ''Late Capitalism.'' {{ISBN|978-1859842027}}
* {{cite book | last = Mander | first = Jerry | author-link = Jerry Mander | title = The Capitalism Papers: Fatal Flaws of an Obsolete System | publisher= Counterpoint | year = 2012 | isbn = 978-1-61902-158-7}}
* 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'' ([Vancouver, B.C., Canada]: On the Brink Publishing, 2013), pp. 50–104.
* {{cite book|last1= Musacchio |first1= Aldo |last2= Lazzarini |first2= Sergio G. |year= 2014|title= Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond|___location= Cambridge, MA |publisher= Harvard University Press|isbn= 978-0-674-72968-1}}
* {{cite book|last=Newitz|first=Annalee|title=Pretend We're Dead: Capitalist Monsters in American Pop Culture|date=2006|publisher=Duke University Press|___location=Durham, NC|isbn=978-0-8223-3745-4|url=https://read.dukeupress.edu/books/book/1045/Pretend-We-re-DeadCapitalist-Monsters-in-American|access-date=26 October 2016|archive-date=26 October 2016|archive-url=https://web.archive.org/web/20161026234517/https://www.dukeupress.edu/Pretend-Were-Dead/|url-status=live}}
* {{cite book |last1=Nitzan|first1=Jonathan |author-link1=Jonathan Nitzan|last2=Bichler|first2=Shimshon |author-link2=Shimshon Bichler|date=2009 |title=[[Capital as Power: A Study of Order and Creorder]]|url= |___location= |publisher=[[Routledge]]|page= |isbn=978-0-415-49680-3}}
* Panitch, Leo, and Sam Gindin (2012). ''The Making of Global Capitalism: the Political Economy of American Empire''. London, Verso. {{ISBN|978-1-84467-742-9}}.
* {{cite book|last= Piketty |first= Thomas |author-link= Thomas Piketty |year= 2014|title= Capital in the Twenty-First Century|___location= Cambridge, MA |publisher= [[Belknap Press]]|isbn= 978-0-674-43000-6 |title-link= Capital in the Twenty-First Century}}
* {{cite book|last= Piketty |first= Thomas |year= 2020|title=Capital and Ideology|___location= Cambridge, MA |publisher= Belknap Press|isbn=978-0-674-98082-2|title-link= Capital and Ideology }}
* [[Karl Polanyi|Polanyi, Karl]] (2001). ''[[The Great Transformation (book)|The Great Transformation]]: The Political and Economic Origins of Our Time.'' [[Beacon Press]]; 2nd ed. {{ISBN|0-8070-5643-X}}
* {{cite book|title= Capitalism: A complete understanding of the nature and value of human economic life|last=Reisman|first= George|year= 1998|isbn= 978-0-915463-73-2
|publisher =Jameson Books}}
* [[Jay W. Richards|Richards, Jay W.]] (2009). ''Money, Greed, and God: Why Capitalism is the Solution and Not the Problem''. New York: [[HarperOne]]. {{ISBN|978-0-06-137561-3}}
* [[Paul Craig Roberts|Roberts, Paul Craig]] (2013). ''The Failure of Laissez-faire Capitalism: towards a New Economics for a Full World''. Atlanta, Ga.: Clarity Press. {{ISBN|978-0-9860362-5-5}}
* [[William I. Robinson|Robinson, William I.]] ''Global Capitalism and the Crisis of Humanity.'' Cambridge University Press, 2014. {{ISBN|1-107-69111-7}}
* {{cite book |last=Schram |first=Sanford F. |title=The Return of Ordinary Capitalism: Neoliberalism, Precarity, Occupy |year=2015 |publisher=Oxford University Press |url=https://global.oup.com/academic/product/the-return-of-ordinary-capitalism-9780190253011?cc=us& |isbn=978-0-19-025302-8 |access-date=12 February 2017 |archive-date=23 September 2020 |archive-url=https://web.archive.org/web/20200923063546/https://global.oup.com/academic/product/the-return-of-ordinary-capitalism-9780190253011?cc=us&lang=en& |url-status=live }}
* Hoevet, Ocean. [https://web.archive.org/web/20120603131601/http://homepage.newschool.edu/~AShaikh/pal2.pdf "Capital as a Social Relation"] (New Palgrave article)
* [[Werner Sombart|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.)
* {{cite book |last1=Sonenscher |first1=Michael |title=Capitalism: The Story behind the Word |date=2022 |publisher=[[Princeton University Press]] |___location=Princeton |isbn=9780691237206}}
* [[Ben Tarnoff|Tarnoff, Ben]], "Better, Faster, Stronger" (review of [[John Tinnell]], ''The Philosopher of Palo Alto: Mark Weisner, Xerox PARC, and the Original Internet of Things'', University of Chicago Press, 347 pp.; and [[Malcolm Harris]], ''Palo Alto: A History of California, Capitalism, and the World'', Little, Brown, 708 pp.), ''[[The New York Review of Books]]'', vol. LXX, no. 14 (21 September 2023), pp. 38–40. "[Palo Alto is] a place where the [United States'] contradictions are sharpened to their finest points, above all the defining and enduring contradictions between [[democracy|democratic principle]] and antidemocratic practice. There is nothing as American as celebrating [[social equality|equality]] while subverting it. Or as [[California]]n." (p. 40.)
* {{cite book | last = Wallerstein| first = Immanuel | author-link = Immanuel Wallerstein | title = Historical Capitalism | publisher= [[Verso Books]] | year = 1983 | isbn = 978-0-86091-761-8}}
* {{cite book | last = Wolff | first = Richard D. | author-link = Richard D. Wolff | title = Democracy at Work: A Cure for Capitalism | publisher= [[Haymarket Books]] | year = 2012 | isbn = 978-1-60846-247-6}}
* {{cite book | last = Wolf | first = Martin | author-link = Martin Wolf | title = The Crisis of Democratic Capitalism | publisher = [[Random House]] | year = 2023 | isbn = 9780241303429}}
{{refend}}
== External links ==
{{EB1922 Poster}}
{{Wikiquote}}
{{Wiktionary}}
* {{In Our Time|Capitalism|p00545kv|Capitalism}}
* [https://www.britannica.com/topic/capitalism Capitalism] at ''[[Encyclopædia Britannica]]'' Online.
* [http://www.hup.harvard.edu/features/capitalism-and-its-discontents.html Selected Titles on Capitalism and Its Discontents] {{Webarchive|url=https://web.archive.org/web/20180123134446/http://www.hup.harvard.edu/features/capitalism-and-its-discontents.html |date=23 January 2018 }}. [[Harvard University Press]].
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