Capitalism is a social system that unleashes the power of the human mind.
Capitalism (from the Latin word capta, meaning “head”) is a social system based on the recognition of individual rights that unleashes the power of the human mind. Central to a proper concept of capitalism is reverence for the power of reason: the individuals means of logically grasping and morally acting in reality. It is this power that allows us to harness the power of the atom for energy, build planes and rocketships to travel the skies and stars, and innovate technology to increase the quantity and improve the quality of our lives. Capitalism is the social system of the Enlightenment, founded on a philosophy based on reason, individualism, and freedom.
Capitalism is not just the free-market, but a free society.
The term capitalism is used here not just in the narrower economic sense (a free-market), but in the broader political sense (a free society). This is because capitalism is not just an economic system that can be grafted onto any political structure, but is an integrated social system that depends on a specific non-contradictory ethical, political, legal, economic, and cultural foundation.
Politically, a capitalist is an advocate of laissez-faire capitalism.
A capitalist is an advocate of laissez-faire capitalism, regardless of how rich or poor they are. Within the specialized domain of economics, a person who owns a business is recognized as a capitalist, regardless of whether one advocates capitalism politically or not. As an illustration, factory-owner Friedrich Engels is regarded economically as a capitalist, though politically — as co-author of The Communist Manifesto — Engels is a communist. Similarly, philosopher Ayn Rand is regarded economically as a novelist, though politically, Rand is a self-described “radical for capitalism.” Friedrich Engels is a communist, and Ayn Rand is a capitalist, not because of their wealth, but because of their ideas.
“The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve ‘the common good.’ It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice.”
— AYN RAND