As defenders of free market capitalism, we have to ask ourselves, what is capitalism? In arguments, we often find ourselves in a situation. To use a cliche, is that real capitalism? Strictly speaking, capitalism is the private ownership of the means of production. This contrasts with socialism which is communal, usually through the state ownership of the means of production, but this brings up an interesting question. What if some industry is privately owned while the rest is communally owned? Can an economy be at both ends of a dichotomy? Short answer, no. While a specific aspect can be socialist or capitalist and etc., it has varying degrees, an economic system is either one-or-the other (or another system entirely, like a fascist economy).
But what is capitalism? George Reisman, an American economist Professor Emeritus of Economics at Pepperdine University, defined capitalism as, “a social system based on private ownership of the means of production. It is characterized by the pursuit of material self-interest under freedom, and it rests on a foundation of the cultural influence of reason. Based on its foundations and essential nature, capitalism is further characterized by saving and capital accumulation, exchange and money, financial self-interest and the profit motive, the freedoms of economic competition and economic inequality, the price system, economic progress, and a harmony of the material self-interests of all the individuals who participate in it.”
While the strict definition is a good starting place, it also leaves a lot to be debated. While Venezuela is clearly an example of a socialist failing, the left still tries to throw it in with capitalism because the strict definition is not specific enough. I am old enough to remember where the “that’s not real socialism” meme came from. Two to three years ago communists stopped arguing this, but back then they would try and say the USSR and Red China were examples of capitalism, not socialism. This can still be seen in some socialists, but most have realized how bad this argument is.
If I am wrong, and the left on this subject is correct, and capitalism if effectively everything not socialist, then it becomes a meaningless term. If capitalism is a catch-all term then it is as useful of a descriptor as any catch-all phrase? Anything that is not specific is not useful. Furthermore, this does not take into account the different political systems capitalism is able to be under. Unlike socialism, capitalism is not a political system– it is only economic. We will often hear the left say, capitalism is bad because of X (usually a war), in response to us saying socialism is bad because it kills millions. Capitalism can not necessarily be blamed for atrocities under it. Any tragedy must be linked to the political system, and these tragedies are almost always a result of the political differences. If two capitalist economies have two different political systems and one commits genocide is it more reasonable to indict the political system or the economic system?