What Is Capitalism?

Tyler Durden's picture

On a day when the sad reality of our (AAPL-free) centrally-planned economy came a little unhinged, it is perhaps useful to reflect on just how different our 'capitalism' in the US now is from other 'capitalist' societies and the one we had in the 1900s. Robert Murphy (of The Politically Incorrect Guide To Capitalism book fame) explains how everyone has an agenda - yet everyone agrees that they despise capitalism. Capitalism is the system in which people are 'free to choose' and this is compared to socialist economies (where prices are set by the Fed state and assets can be confiscated for the benefit of the people). The fear of capitalism's citizenry running riot with unregulated actions leaves critics focused on a belief that regulators and bureaucrats know better than private citizens how to make their own decisions. This brief discussion ends with a sprinkling of Ayn Rand, Obama, Geithner, Barney Frank, and Harry Reid and their efforts to evade Capitalism's features, misrepresent its nature, and destroy its last remnants.


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Gully Foyle's picture

"Capitalism is the system in which people are 'free to choose'"

Isn't that actually Anarchy?

Capitalisim is making a profit from peoples choices.

Making the choice freely is Anarchy.

spiral_eyes's picture

I wrote a primer on this last year. Basically capitalism, means that the citizens are free from central planning to experiment with different forms of production, and to keep the fruits of their labour.


battle axe's picture

What happens when the fruit tree has  been stolen? JPM/GS/etc etc etc etc

Badabing's picture

What is capitalism?

You really want that answered?

HFTs until someone cuts the fiber lines or feeds them a virus.   

Spok: listen carefully, everything he says is a lie.

Captain Kirk: I’m lying.

Robo bitch #3: Norman coordinate…….. Boooooooooooooooooop

pftp smoke from ear.      

AnonymousAnarchist's picture

"Capitalism" is a word and you should have no attachment to a word. When "capitalism" refers to a truly free market, then I'm a capitalist. When "capitalism" refers to state-capitalism, I'm an anti-capitalist.

I hate to say it but, just as Proudhon and Tucker failed at keeping the statists from hijacking the word "socialism", the free market capitalists have failed to keep the statists from hijacking capitalism. It's statism 101. It keeps people fighting over things that don't matter. If you can get 2 people fighting over what a word means then it might keep them from noticing that they both see freed markets as a solution.

ratso's picture

This is really awful propaganda.  All the real evils of amoral capitalism are denied and captialism is uphelp as some paragon of truth containing ideology. What crap!!

Robert Murphy Booo! You are just the quiet speaking tool of ruthlessly exploitive capitalists. 

Just remember that there is nothing about capitalism in the constitution or the declaration of independence and that China is a great example of how capitalism doesn't need freedom it just needs to be able to control the workers.

centipede's picture

Great thinking! Are you really implying that China is a capitalist society? :-)

Capitalism is defined as a freedom of any coercion if you do not coerce anybody yourself. How can China be "a great example of how capitalism doesn't need freedom" if its politicians coerce the citizens, allow even to business oligarchy to coerce and control the workers in a blatant conflict with the very definition of capitalism?

ratso's picture

Wrong exploitation breath.  Words like freedom are attached to capitalism to try and dress up the problems it presents for the exploited workers.

trembo slice's picture

"Abuse of words has been the great instrument of sophistry and chicanery, of party, faction, and division of society."

- John Adams

Cathartes Aura's picture

I like someone who defines their used words. . .

beyond that, your reasoning skills are right up there,  couldn't agree more!

plus many. . .


Gully Foyle's picture


"and to keep the fruits of their labour."

No. They would be free to make a PROFIT from the fruits of their labor.

But the same would be true with Anarchy.

Essentially, with both Anarchy and Capitalism, people either choose to cooperate or compete for goods and rescources and services.


an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market


Sophist Economicus's picture

You are co-mingling a 'political' system (anarchism) with an 'economic' system (capitalism).   The most likely system of economics under an Anarchistic Society (or Libertarian) would be Capitalism....

AnAnonymous's picture

The most likely system of economics under an Anarchistic Society (or Libertarian) would be Capitalism....



Anarchy is the guarantee of no social order while capitalism requires a social order enforcing private property rights.

More US citizen propaganda.

Sophist Economicus's picture

China-bot, you are always so simplistic.    If there was no enforcement of property rights, there would be chaos and rudimentary economic/cultural development, you know, like in your neighborhood.


Play chess with the idea for awhile.   Take both sides of the argument and then send me a pulse-gram

AnAnonymous's picture

Where is my neighbourhood?

Rudimentary economic cultural development?

Are you telling that the respect of property rights is what explains development of economy and culture?

If so, please explain the US of A.

I want ever more US citizen cheap propaganda.

faustian bargain's picture

Are you saying that respect of property rights is what the US of A has? Because if you are, you would be either mistaken, or yourself guilty of propagandizing.

Mmm, yummy trollburger.

LvM's picture

No, 'anarchy' mean without rulers. Rulers != social order. Read David Friedman's 'The Machinery of Freedom' (free pdf online) for a way this could work, or google 'spontaneous order'.

AnAnonymous's picture

The most likely system of economics under an Anarchistic Society (or Libertarian) would be Capitalism....



Anarchy is the guarantee of no social order while capitalism requires a social order enforcing private property rights.

More US citizen propaganda.

ffart's picture

Social order for who? And anyone who doesn't want to live at the expense of this social order just gets a double tap to the back of the head?

jpmrwb's picture

Capitalism is a politico-economic system.

AlaricBalth's picture

"Basically capitalism, means that the citizens are free from central planning to experiment with different forms of production, and to keep the fruits of their labour."

...And to deal with the consequences of misguided or incompetent decisions and to not pass them on to taxpayers.

RECISION's picture

Ahh, yes.

Not pass them on to the taxpayer... that would be the socialising of the losses and privatising the gains...

So I guess that means we really need to eliminate the limited liability company - and have Unlimited-liability.

Because otherwise, inherantly from word one you have set up a system where someone else has to take a loss for your mistakes.

Interesting how everyone want to benefit from the "Fruits" of their labours, but no-one wants to take the losses.

Capitalism is a rather slippery sort of concept really isn't it...

AlaricBalth's picture

Unlimited gain or loss. That is the essence of pure free market capitalism.

Prometheus418's picture

I like that definition, and it works.

It accounts for human behavior and allows for the maximum amount of freedom while maintaining a functioning society.  With the real threat of total personal devistation, most would take only modest risks, and gain modest rewards.  There would be some who were willing to accept more risk and responsibility, and gain massive wealth accordingly- but we have that now anyway.  

The biggest problem is still the government safety net.  Were it not for that, a lot of the oligarchy would have been devestated in 2008, and we would be well on our way back to recovery.  I don't mind people having more money than me- but I do care when I am forced to settle their bad bets for them.

A Nanny Moose's picture

The corporations is indeed an invention of government, not the free market.

citizen2084's picture

Bingo! The evolution of the state lic. corp is what is missing from this dialogue.


batterycharged's picture

Yep. People read so much into what capitalism means, it simply means capital is owned by private entites and not the state.

To say "compare this to socialism" is idiocy. Who wrote this article, Rush Limbaugh?

The opposite of capitalism is a command economy.

Socialism isn't necessarily a command economy. Europe has private enterprise and socialism, we have socialism and capitalism.

Wow, how did this article get on here?

Marco's picture

"Actors in economies should be free to experiment. Good ideas should be free to succeed, and bad ones to fail. The role of the government should be to provide a level playing field for experimentalism (and enough of a safety net for when experiments go wrong)"

This isn't what most the ZH crowd recognises as Capitalism, which is to say Rothbard type capitalism. Rothbard doesn't recognise the need for a level playing field or a safety net ... Rothbard has the magical belief those properties will emerge from capitalism proper, not government. This is more capitalism in the earlier sense, Locke's provisio and all that ... which doesn't have the nice simple answers which Rothbard has.

Straying from the flock's picture

Profit from choices.  That is the sad state of our system.  A dime a day ENDS the charade. Cast off your chains and live free.

Straying from the flock's picture

This spam free comment has been submitted just for your reading pleasure.

Beam Me Up Scotty's picture

I'd rather be a bit closer to anarchy on the spectrum than were we are now.   We are heading toward total control, not total anarchy.  Well, it might get to total anarchy if they fail at total control.

CH1's picture

Real anarchy is actually very cool, and better for all producers.

AnAnonymous's picture

Real stuff is usually better.

The best real thing ever is real US citizenism, the best real thing that has ever happened to real human beings.

Alas, what we've got now is fake US citizenism.

It is not like in US citizenism, everything is meant to be fake but the core processes that are extorting the weak and farming the poor.

But, yeah, the real thing is so better cooler, but in a real way.

prole's picture

Hundreds and thousands of FoxConn employees killing themselves yet you live on. Oh the humanity

downrodeo's picture

i've always maintained that anarchy is an absolute necessity in a free society because it is a counter force to governement expansion. government grows in only one direction; that is to say it will only get larger as time progresses. for instance, there is no such thing as an anti-terrorist attack that would cause congress to repeal the patriot act. anarchy/anarchists are needed to slow the inexorable growth of the parasite we call the state.

juangrande's picture

The only thing that needs to be free is our minds! Until that happens collectively, we'll just keep perpetuating the great circle jerk!.....Free your minds and the rest will follow....

drink or die's picture

Anarchy is really more of a political system, capitalism is economic.  Unfortunately in todays world, politics and economics are hand in hand.

earleflorida's picture

'anyone against the status quo is an anarchist' [were it to be on any timeline in recorded history] -- todays', status quo in amerika is not socialism, but rather a hybrid facilitator of ingsoc,... pacifying the confused masses, whom crossed the rubicon long ago, into a life-decision game of triangle-toss, that of desperation and a queer kafkaesque-situation submerged in benign hope - where the awkward pointed linerar pryimid rules the day [your life -your future - your destiny] -- the  outcome be it socialism, communism, or fascism always gravitates upon totalitarianism its central axis -- simple, ya can't escape, but, you can be a progressive neo-anarchistic for change[?] we can believe in? -- refuse to cross that rubicon of no return, and burn down this bridge to nowhere! -- your war cry shall be "Catitalism Rules"! never forget ye never to be serfs,...never forget!


DosZap's picture

Anarchy is really more of a political system

Anarchy is the total lack of ANY system.

It's where anything goes, and there is no CENTRAL AUTORITY.The people have 100% control............and is lawless.

earleflorida's picture

The framers were "ANARCHIST"!

The "Enlightenment" was Anarchy!

and yes, even the  "Bolshevik Revolution" was of fomenting aggression, ''Anarchism"! 

Indeed; "and all is lawless", were it not for a lawless society to berth a scuttled vessel of debauchery upon its citizenry, as a panacea of aggression and blatant disdain for the Constitution and the center-piece of humanities being - The Bill-of-Rights ?                      

Please by all means question the action-ability of the "Commander and Chief"___ ask Bush, Cheney, Rumsfeld, Black, Haynes, Yoo, Hayden, Wolfowitz, Addington, Gonzales, Chertoff, Tenet, "The Bush White-House", "The DOD" and "DOJ", and the shameless list goes on --- right into the next adminisrtration!

Question Authority! [as Cartman would say,... athorium - Go SouthPark***] 

Comay Mierda's picture

Gully Foyle - proud employee of the CIA Blog Provocateur Department

Dedicated to twisting truisms for the purposes of making ZH out to be a anarchist/terrorist blog

Attempting to place ZH high on the list of sites to be deleted after the passing of the soon to be drafted 2013 Terrorist Blog Act

Gully Foyle, you are an idiot 


Gully Foyle's picture

Comay Mierda

Dude, you flatter me.

I wish I had the CIA bucks rollling my way. And the get out of jail free card that comes with the job.

Explain to me how an "idiot" can be intelligent enough to be "Dedicated totwisting truisms for the purposes of making ZH out to be a anarchist/terrorist blog".

That is contradictory.

malek's picture

Well said, Comay Mierda.

And to answer GF: copy/paste?

But in general most people fail to understand that "freedom to choose" is not just freedom to select or bid, but also freedom to offer.

GernB's picture

Implied in your argument is that we must enslave people to avoiod anarchy.

And, you are exactly backwards, capitalism is the consumer profiting from the choices they force upon the rich and powerful.

Making choices freely is freedom, calling it anarchy is the trick tyrants have pulled for centuries to convince themselves they're tyranny is justified.