Capitalism's/Socialism's definition

[DinodudeEpic]

I was talking to someone about the definition of capitalism, which I defined as 'the ownership of the means of production by the wealthy individuals of society." He then answered with the olde 'from rags to riches' argument. Then, he said that capitalism = free market. Which, I told him that it is not a synonym with free markets.

How can I explain to someone that the economic systems of capitalism, socialism, and such are based off the means of production instead of if there are markets?

[Kotze]

You can tell him that you can show any statement to mean anything if you are allowed to make up your own special definition of any word, and that doing so and "proving him wrong" like that would be neither particularly clever nor convincing.

Capitalism meaning free markets is not his own definition made up on the spot, but this is not the meaning it has in classical economics. When you read econ texts from 100 years ago, whether it's from a socialist or liberal or conservative viewpoint, the usually used definition there is one with private ownership of the means of production. (If you want to be really precise, it's not so much the legal concept of ownership that matters, but rather actual control, as copyright holders are about to find out.)

It's not that pundits today just use capitalism to mean free markets and one definition is as good as another, it would just be mildly annoying to adapt to that, the usage in mainstream media is instead one that is inconsistent and it's inconsistent for a reason. Arguments from airy models with purely free markets, capitalism in the new sense, are used to justify capitalism in the old sense. Similarly, results from "free market" models where everybody has equal power and perfect foresight are used to justify "free markets" in the sense of less regulation, even if more regulation, to curb the power of the big players or to make things more transparant, would actually move reality closer to the model.

I don't find it convincing when pundits try to justify any positive development as an outcome of capitalism and then brush away any negative development with saying ohyouknowthatwedonothaveREALcapitalism, switching back and forth between definitions.

[RGacky3]

Markets have always existed in some form or another. Capitalism really only came about with the strict notion of Capitalist property and wage labor.

Many of the early socialists were market socialists, in the sense that the supported a form of a market (not one where there is means of production/landed property).

[Blake's Baby]

Markets have always existed in some form or another...

Care to demonstrate that archaeologically? You can use any culture you like anywhere on Earth, I'm betting you can't find evidence for a market before 500BC.

Unless as Kotze suggests, you're using 'market' to mean whatever you want it to mean.

I'm using it to mean 'place where goods are exchanged for money' by the way.

[Ismail]

http://encyclopedia2.thefreedictionary.com/Capitalism

Scroll down a bit and behold, the Great Soviet Encyclopedia article on Capitalism and what it is.

http://encyclopedia2.thefreedictionary.com/Market

Again, scroll down a bit and behold, their article on the market.

Both should be good introductions.

[#FF0000]

How can I explain to someone that the economic systems of capitalism, socialism, and such are based off the means of production instead of if there are markets?

Well, first off, don't try and insist that the person is wrong because they use a word differently than you. Explain that, to Marxists, the word "capitalism" is broader than just "free market economics". Explain to them that Marxists oppose the capitalist mode of production, which features a wage system, exclusive ownership of the means of production (with either private parties or the state taking exclusive ownership!), etc. etc. etc.

the only time i really ever tell people they are wrong with words is when they describe welfare capitalism as socialism, but even then it's best to have a light touch and avoid saying "that isn't socialism, you are wrong". Just explain why using the word socialism to describe government intervention in capitalism is inconsistent (because if that's what socialism is, then we've never had capitalism in the history of man).

[Bud Struggle]

Well, first off, don't try and insist that the person is wrong because they use a word differently than you. Explain that, to Marxists, the word "capitalism" is broader than just "free market economics". Explain to them that Marxists oppose the capitalist mode of production, which features a wage system, exclusive ownership of the means of production (with either private parties or the state taking exclusive ownership!), etc. etc. etc.

the only time i really ever tell people they are wrong with words is when they describe welfare capitalism as socialism, but even then it's best to have a light touch and avoid saying "that isn't socialism, you are wrong". Just explain why using the word socialism to describe government intervention in capitalism is inconsistent (because if that's what socialism is, then we've never had capitalism in the history of man).

Comrade, you be makin' some good posts these days.

[Judicator]

It's not that pundits today just use capitalism to mean free markets and one definition is as good as another, it would just be mildly annoying to adapt to that, the usage in mainstream media is instead one that is inconsistent and it's inconsistent for a reason. Arguments from airy models with purely free markets, capitalism in the new sense, are used to justify capitalism in the old sense. Similarly, results from "free market" models where everybody has equal power and perfect foresight are used to justify "free markets" in the sense of less regulation, even if more regulation, to curb the power of the big players or to make things more transparant, would actually move reality closer to the model.

I wish I could say I've seen an "airy model" presented in the mainstream media. But it's just the same repetitive bs about "creates jobs good, destroys jobs bad, economic incentives irrelevant."

The goal of public finance is exactly what you're saying...to move reality closer to the model.

[NGNM85]

It's both. Capitalism is an economic system where the means of production are privately owned, and goods and services are sold on the free market. This has very few precedents in history. The present-day United States isn't even close. Furthermore; the elites hate free markets, they're just as opposed to them as your garden variety Marxist, if not more so. I don't think it's a particularly good idea, either, I'm fairly sure it would lead to some kind of nightmare dystopia, but it is substantially different. What we have, presently, in the United States would be more appropriately characterized as Corporate Mercantilism.

[#FF0000]

The present-day United States isn't even close

How do you figure? Economic interventionism has been a characteristic of capitalism since "day one". In no definition of the capitalist mode of production (other than your own) does anyone say the market has to be "free", which in this case I assume means a market "free of regulation", which has never existed in history. And that's another thing -- there's many who'd argue that regulations are necessary for economic freedom. There's a lot of ways to look at this issue.

But, anyway, the Marxist view of the Capitalist mode of production has nothing to do with how heavy the regulations of the market are. From this view, which I find more consistent and tethered to reality, Capitalism, America's "Corproate Mercantilism", and hell, even Britain's Welfare State, Fascist Italy's Corporate State, and the Soviet's Socialism in One Country", are all variations on the modern method of the big grinding down the small.

[NGNM85]

How do you figure?

There's nothing remotely resembling a free market. The elites are rabidly opposed to it. All that talk about ‘small government’ is nonsense. The business class want a huge government, moreover, they need it. When they talk about reducing the size of government, they’re only referring to what few regulations they still have to abide by, and the minimal welfare state. That has to be destroyed, because they follow what Smith called, the ‘vile maxim of the masters of mankind’; ‘All for ourselves, and nothing for anybody else.’ I use the term ‘Corporate Mercantilism’, which is much more accurate.

[#FF0000]

There's nothing remotely resembling a free market. The elites are rabidly opposed to it.

No kidding, but like I said, the "free market" in this sense has never existed, and to "the elites", a free market means whatever makes them the most money.

[RGacky3]

Care to demonstrate that archaeologically? You can use any culture you like anywhere on Earth, I'm betting you can't find evidence for a market before 500BC.


In ancient babylonian and eygptian economies they did have foreign trade markets, i.e. merchants, although your right internal markets were not really present.


Unless as Kotze suggests, you're using 'market' to mean whatever you want it to mean.

I'm using it to mean 'place where goods are exchanged for money' by the way.

In those ancient cultures they generally used a grain based monetary system for trades, but the only markets back then were really merchants that sent trading agents to different places to trade for a profit, if by a market your refering to an internal system of trading goods and services for money, your right.