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Defining Capitalism

Merriam-Webster has announced that "capitalism" and "socialism" were the most looked-up words of 2012. That's unsurprising in a year when these concepts were central to political debate—especially since true capitalism is so rarely identified that, as I noted back in October, even Republican presidential candidate Mitt Romney failed to grasp what a "free market" is.

So here’s a reminder: Capitalism is freedom, including the freedom to create, keep, and exchange material as well as spiritual values. In her essay “What Is Capitalism?” in Capitalism: The Unknown Ideal, Ayn Rand gave this definition: “Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.” Capitalism—true capitalism—is not a system in which government officials shower special favors on their favorite rich people; that’s cronyism, or “crony capitalism.” (“Crony capitalism” is a form of capitalism about the way “mandatory volunteering” is a form of volunteering.)

William R Thomas expounded on the point in his Q&A “What Is The Objectivist View Of Law And Government (Politics)?” Thomas also created study questions for individuals to use with Rand’s “What Is Capitalism?” and I created a syllabus for group study of the essay.