capitalism

Definition of Capitalism

(noun) An economic system based on market competition and the pursuit of profit, in which the means of production or capital are privately owned by individuals or corporations.

Example of Capitalism

• state capitalism

Capitalism Pronunciation

Pronunciation Usage Guide

Syllabification: cap·i·tal·ism

Audio Pronunciation

International Phonetic Alphabet

• American English – /ˈkæpədlˌɪzəm/
• British English – /ˈkapᵻtəlɪzm/

Usage Notes

• Plural: capitalisms
• The private ownership of the means of production in capitalism is contrasted to cooperative or state ownership of the means of production such as in communism and socialism.
• Within a capitalist system—production, prices, and the distribution of goods and services are typically determined by competition.
• Capitalism is compared and contrasted to other economic systems such as communism and socialism.
• Also called:
  • capitalist economy
  • free enterprise
  • market economy
  • private enterprise
• A (noun) capitalist advocates for (adjective) capitalistic fiscal policy.

Related Quotations

• “Capitalist production requires exchange relations, commodities, and money, but its differentia specified is the purchase and sale of labour power. For this purpose, three basic conditions must become generalized throughout society. First, workers are separated from the means with which production is carried on, and can gain access to them only by selling their labour power to others. Second, workers are freed of legal constraints, such as serfdom or slavery, that prevent them from disposing of their own labour power. Third, the purpose of the employment of the worker becomes the expansion of a unit of capital belonging to the employer, who is thus functioning as a capitalist. The labour process therefore begins with a contract or agreement governing the conditions of the sale of labour power by the worker and its purchase by the employer. It is important to take note of the historical character of this phenomenon. While the purchase and sale of labour power has existed from antiquity, a substantial class of wage-workers did not begin to form in Europe until the fourteenth century, and did not become numerically significant until the rise of industrial capitalism (that is the production of commodities on a capitalist basis, as against mercantile capitalism, which merely exchanged the surplus products of prior forms of production) in the eighteenth century” (Braverman 1974:52).
• Capitalism, simply, is an irrational way to run the modern world, because it substitutes the whims of the market for the controlled fulfilment of human need. For these images I suggest we should substitute that of the juggernaut – a runaway engine of enormous power which, collectively as human beings, we can drive to some extent but which also threatens to rush out of our control and which could rend itself asunder” (Giddens 1990:138–39).
• “In fact, democracy and capitalism often contradict each other. Capitalism, after all, frees individuals to pursue their own private interests in the marketplace; it promotes unconstrained liberty. Democracy, on the other hand, constrains individual liberty in the name of the common good” (Kimmel and Aronson 2012:426).
• “The capitalistic economy of the present day is an immense cosmos into which the individual is born, and which presents itself to him, at least as an individual, as an unalterable order of things in which he must live. It forces the individual, in so far as he is involved in the system of market relationships, to conform to capitalistic rules of action. The manufacturer who, in the long run, acts contrary to these norms, will just as inevitably be eliminated from the economic scene as the worker who cannot or will not adapt himself to them will be thrown into the streets without a job” (Weber [1904–5] 1930:19–20).
• “[T]he religious valuation of restless, continuous, systematic work in a worldly calling, as the highest means to asceticism, and at the same time the surest and most evident proof of rebirth and genuine faith, must have been the most powerful conceivable lever for the expansion of that attitude toward life which we have here called the spirit of capitalism” (Weber [1904–5] 1930:116).

Related Videos

Additional Information

• Economic Sociology Resources – Books, Journals, and Helpful Links
• Word origin of “capitalism” – Online Etymology Dictionary: etymonline.com
• Aglietta, Michel. 1979. A Theory of Capitalist Regulation: The US Experience. London: Verso Books.
• Amable, Bruno. 2003. The Diversity of Modern Capitalism. New York: Oxford University Press.
• Arrighi, Giovanni. 1994. The Long Twentieth Century: Money, Power, and the Origins of Our Times. London: Verso Books.
• Campbell, John L., and Ove K. Pedersen. 2007. “Institutional Competitiveness in the Global Economy: Denmark, the United States and the Varieties of Capitalism.” Regulation and Governance 1(3):230–46. doi:10.1111/j.1748-5991.2007.00012.x.
• Fligstein, Neil. 2001. The Architecture of Markets: An Economic Sociology of Twenty-first-century Capitalist Societies. Princeton, NJ: Princeton University Press.
• Fulcher, James. 2004. Capitalism: A Very Short Introduction. Oxford: Oxford University Press.
• Giddens, Anthony. 1971. Capitalism and Modern Social Theory: An Analysis of the Writings of Marx, Durkheim and Max Weber. Cambridge: Cambridge University Press.
• Guest, Robert. 2011. Borderless Economics: Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism. New York: Palgrave Macmillan.
• Hall, Peter A., and David W. Soskice, eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York: Oxford University Press.
• Ingham, Geoffrey K. 2008. Capitalism. Cambridge: Polity.
• Markandya, Anil. 2009. “Can Climate Change be Reversed under Capitalism?” Development and Change 40(6):1139–52. doi:10.1111/j.1467-7660.2009.01615.x.
• Martin, Edward J., and Rodolfo D. Torres. 2004. Savage State: Welfare Capitalism and Inequality. Lanham, MD: Rowman & Littlefield.
• Marx, Karl, and Friedrich Engels. [1848] 2017. The Communist Manifesto. London: Pluto Press.
• Marx, Karl. [1867] 1872. Das Kapital: Kritik der politischen Oekonomie. Hamburg, Germany: Verlag von O. Meissner.
• Mintz, Morton, and Jerry Cohen. 1971. America, Inc.: Who Owns and Operates the United States. New York: Dial Press.
• Nealon, Jeffrey T. 2012. Post-postmodernism, or, The Cultural Logic of Just-in-time Capitalism. Stanford, CA: Stanford University Press.
• Thrift, Nigel J. 2005. Knowing Capitalism. Thousand Oaks, CA: SAGE.
• Trigilia, Carlo. 2002. Economic Sociology: State, Market, and Society in Modern Capitalism. Malden, MA: Blackwell.
• Weber, Max. [1921–22] 1979. Economy and Society. Chicago: University of California Press.
• Weber, Max. [1904] 1958. The Protestant Ethic and the Spirit of Capitalism. New York: Scribner.

Related Terms

• capital
• capital flight
• class
• communism
• economism
• economy
• means of production
• mode of production
• relations of production
• socialism
• wealth

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References

Braverman, Harry. 1974. Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century. New York: Monthly Review Press.

Giddens, Anthony. 1990. The Consequences of Modernity. Stanford, CA: Stanford University Press.

Kimmel, Michael S., and Amy Aronson. 2012. Sociology Now. Boston: Allyn & Bacon.

Weber, Max. [1904–1905] 1930. The Protestant Ethic and the Spirit of Capitalism. Translated by T. Parsons. London: Allen and Unwin.

Note: Page numbers are from a reprinted edition, Routledge Classics (2001).

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Cite the Definition of Capitalism

ASA – American Sociological Association (5th edition)

Bell, Kenton, ed. 2013. “capitalism.” In Open Education Sociology Dictionary. Retrieved April 20, 2024 (https://sociologydictionary.org/capitalism/).

APA – American Psychological Association (6th edition)

capitalism. (2013). In K. Bell (Ed.), Open education sociology dictionary. Retrieved from https://sociologydictionary.org/capitalism/

Chicago/Turabian: Author-Date – Chicago Manual of Style (16th edition)

Bell, Kenton, ed. 2013. “capitalism.” In Open Education Sociology Dictionary. Accessed April 20, 2024. https://sociologydictionary.org/capitalism/.

MLA – Modern Language Association (7th edition)

“capitalism.” Open Education Sociology Dictionary. Ed. Kenton Bell. 2013. Web. 20 Apr. 2024. <https://sociologydictionary.org/capitalism/>.