Capitalism is the social system based on the individual’s right to life, liberty, and the pursuit of happiness.
What is capitalism?
Capitalism (from the Latin word capta, meaning “head”) is a social system based on individual rights that unleashes the power of the human mind.
The term capitalism is used here in the broader political sense, and not in the narrower economic sense, i.e., a free-market.
Capitalism is not just an economic system that can be grafted onto any political structure. Capitalism is a complex, integrated social system that depends on a specific economic, legal, political, and ethical foundation:
1. Morality of rational self-interest (egoism)
Ethically, capitalism is founded on the moral philosophy of rational self-interest (egoism): a code of morality based on what human beings require to achieve happiness living on earth.
2. Politics of individual rights
Politically, capitalism regards the individual as a sovereign being with an inalienable right to take the actions necessary to support one’s life (freedom), so long as one respects the equal right of others to do the same.
3. Legal system of objective law
Legally, capitalism operates according to a rule of objective law with a government whose purpose is to protect individual rights. By “laissez-faire,” we do not mean anarchy, but a society where if one is not violating the rights of others one is “left alone” by the state.
4. Economics of a free market
Economically, freedom protected by objective law, applied to the sphere of production and trade, results in a free market in material and spiritual values.
5. Culture of peace, prosperity & progress
Culturally, this freedom in the economic and personal sphere leads to innovation in the arts, technology, and sciences, leading to peace, progress, and prosperity for all.
Without the proper foundation, capitalism is like a skyscraper built on quicksand. It is this foundation that capitalism’s enemies and ‘friends’ are out to undermine and destroy.
What is a capitalist?
A capitalist is an advocate of laissez-faire capitalism, regardless of how economically 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.” Engels is a communist, and Rand a capitalist, not because of their accumulated wealth, but because of their ideas.
Though billionaires Warren Buffet, Bill Gates, Ted Turner, and George Soros are economically compartmentalized as capitalists, they philosophically are not capitalists but advocates of “mixed economy” statism (capitalism combined with anti-capitalist elements) to various degrees. Soros being more anti-capitalist than Buffet. Engels being more anti-capitalist than both. Soros, like billionaire Ted Turner and politician Elizabeth Warren, is a “socialist at heart.”
Why do intellectuals hate capitalism?
Capitalism is attacked because of its philosophical foundation of reason and egoism.
No political-economic system in history has been so beneficial to the cause of humanity than capitalism, and no system is more unjustly attacked, viciously condemned, and dishonestly smeared.
Though the economy of capitalism has proven to be materially beneficial to human flourishing, intellectually — as a demonstration of the role of reason and self-interest in human life — it is regarded as evil.
The battle for the future of capitalism is not just a practical issue; it is a moral one.
As philosopher Ayn Rand has observed, capitalism is the ideal social system as it leaves the individual free to be moral — free to act rationally in the pursuit of their happiness — so long as one respects the equal freedom of others to do the same.
What is the cause of capitalism’s “failures”?
Government coercion is the cause of the alleged failures blamed on capitalism.
The fruits of capitalism — peace, progress, and prosperity — are a result of the intellectual roots that make up the tree. If one attempts to dig up the roots, chop at the trunk, and hack the branches — that is, change the structure of capitalism to include contradictory, anti-capitalist elements (i.e., rights-violating regulations that sacrifice individual rights for the “common good”) — one faces the danger of killing off the tree.
It is this undermining of capitalism that has resulted in a variety of mixed economies, or “hyphenated capitalisms.” All so-called hyphenated-capitalisms (‘state-capitalism,’ ‘anarcho-capitalism,’ ‘crony-capitalism,’ ‘democratic capitalism,’ ‘welfare capitalism,’ etc.) are not forms of capitalism but are mixtures of capitalist and non-capitalist elements. It is these coercive, rights-violating, non-capitalist, statist elements, acting like cancer, that are responsible for capitalism’s alleged “failures” from financial crashes, depressions, and mass unemployment to out of control medical costs, systemic racism, and wars.
Why does capitalism matter?
The battle for capitalism is a matter of life and death: your life and your death.
The battle for capitalism is not just an argument over wealth; it is a philosophical one over the individual’s inalienable right to life, liberty, property, and the pursuit of their happiness.
The battle for capitalism is one on which the fate of civilization hangs in the balance. It is not merely a discussion that can be left to intellectuals in ivory towers, talking heads in the press, and mobs in the streets.
The battle for capitalism is one in which no thinking individual — who chooses to live as a human being — may abstain. It is a battle that one must engage in not as an unchosen “duty,” but as a matter of individual “selfish” importance.
The purpose of The Capitalism Site is to clear up the misinformation about capitalism and to educate those individuals who seek to “save,” “improve,” and “reform” capitalism by grafting it onto an anti-reason, anti-individualist, and anti-freedom foundation.
If you wish to join the intellectual battle and learn more, then take the Capitalism Tour.
A visual presentation of the nature of capitalism (estimated time 6 minutes). It is the most popular feature of this site.
Capitalism Frequently Asked Questions (FAQ) covers subjects ranging from antitrust and individualism to selfishness and socialism to help you “chew” the ideas introduced in the tour.
Explore the rich literature of Capitalism. The library features a selection of books on capitalism like Ayn Rand’s classic Capitalism: The Unknown Ideal.
Capitalism Magazine is a daily magazine featuring articles defending individual rights.
Every week the Voice of Capitalism Newsletter delivers capitalism related news, events, and book recommendations to your email box for free.
Our blog, Capitalism Review, highlights articles of interest from around the web on Capitalism.
Frequently Asked Questions About Capitalism
Before you browse the questions in this FAQ, please go through the Capitalism Tour. This FAQ assumes you are familiar with the material provided in the Tour.
“One of the most revolutionary and powerful works on capitalism—and on politics—that has ever been published.”—Barron’s magazine