Capitalism is a social system that unleashes the power of the human mind by protecting the individual’s right to life, liberty, property, and the pursuit of happiness.
Capitalism is the social system of the Enlightenment, founded on a philosophy based on reason, egoism, and freedom. The term capitalism (from the Latin word capta, meaning “head”) 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 an integrated social system that depends on a specific ethical, political, legal, economic, and cultural foundation.
Moral Foundation of Rational Self-Interest
Ethically, the animating force behind capitalism is the moral philosophy of rational self-interest: a code of morality based on what human beings require to achieve happiness living on earth.
Politics of Individualism
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. It is the political system based on the individual’s right to life, liberty, property, and the pursuit of happiness.
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.
Economics of the 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.
Culture of Innovation
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.
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. Though billionaires Warren Buffet, Bill Gates, Ted Turner, and George Soros are regarded economically as capitalists, philosophically, they are not capitalists but advocates of “mixed economy” statism (capitalism combined with anti-capitalist elements) to various degrees. Soros is more anti-capitalist than Buffet; Engels is more anti-capitalist than both. Soros, like billionaire Ted Turner and politician Elizabeth Warren, is a “socialist at heart.”
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.