Capitalism: What’s in a word?
Setting out the Terms of Engagement
You keep using this word. I do not think it means what you think it means.
(Inigo Montoya, The Princess Bride, 1987)
The term Capitalism means different things to different people, even among various categories of progressives. Outside of academia, it often functions as a shibboleth — a kind of cultural password — which can convey, depending on use, a whole set of beliefs or values. It is also context-specific: when different groups of people use the term Capitalism, they’re drawing on particular meanings and sets of shared assumptions.
In public writing and discussion, the term itself can therefore become ambiguous, over-used, or redundant, and thus lose some of its explanatory power.
I’ll spend the rest of this essay teasing out the basic differences in how the word is understood and used.
How most people hear the word Capitalism
The term Capitalism operates on two interlinked registers for most people outside of politics and economics.
First, it describes an economic system, based around trade, commerce, competition, jobs, and profit. Second, it alludes to greed, exploitation, and consumerism on one hand, and opportunity and entrepreneurship on the other.
These registers are shared by many people — regardless of whether they are on the political right or left. Even advocates and apologists of Capitalism will argue that there needs to be less greed or cronyism, but that at heart the economic principles are sound.
For the majority, there is no difference between how trade and commerce operate under Capitalism would differ from under any other economic system. Indeed, the rules and norms of the economy seem so natural to human society that ‘ending’ Capitalism carries with it no substantive meaning.
People don’t have a day-to-day working conception of Capitalism partly because they don’t need to, and partly because the system itself is so obscure. We might think about how much we hate or love our work, or how we’re being financially or socially squeezed or rewarded, but it’s rare to connect those things directly with the inner workings of a specific type of social system or economic model.
Moreover, most of the social problems we have, including homelessness, inequality, sexism, homophobia, and racism, appear to exist as intrinsic to human society in general, not an economic model specifically.
Because we don’t see Capitalism as something that has a specific internal structure, measurable history, and dynamic connection with other aspects of society — namely, as a system — it is much easier to resign ourselves to the view that it can’t be changed in any meaningful way. In my experience as a political organiser, people are actually in support of broad social changes such as free public services, but have an in-built pragmatism reflective of their own individual experiences, resulting in what is often termed ‘Household Economics’. You can’t spend more than you have, incomings and outgoings should be balanced, and financial responsibility is key. purchased.
Similarly, people want an end to prejudice, and yet their lived experiences tell them that this is something that might just be part of human life, regardless of the steps we take toward ending it.
It’s important to recognise that these perspectives (and their counterparts) are socially constructed: based on everyday real-world experience, not off innate baked-in beliefs or values.
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The mainstream political economic perspective
Among mainstream pundits, and even many progressives and socialists, Capitalism is an economic system defined by the production of goods and services for profit.
It’s most commonly counterposed with the mainstream conception of Socialism, in which people collaborate to produce goods and services for human needs, not for profit. Typically, its supporters will argue that Capitalism is also geared around fulfilling human needs and that the profit incentive is the best way to efficiently allocate resources. They will also use historical examples of Socialism failing, or of Capitalism advancing human needs, in order to support these claims, along with the idea that if Capitalism didn’t work, then rational society would have ditched it for a better economic model.
In this sense, Capitalism is the name we give to the way the economy is structured — and its proponents view it as the best possible option among many. Capitalism is very much defined by ‘economic actors’ in this model. It is entrepreneurs, bankers, investors, analysts, CEOs, and business owners as well as the economic institutions that these people belong to, that make up Capitalism. It doesn’t feature regular workers so heavily — the discourse is around the economy, as opposed to day-to-day social life.
It’s actually uncommon to hear mainstream uses of the word Capitalism — centrist, right-wing, and even progressive political figures will usually just use the term ‘the economy’. If they do use it, it’s for a rhetorical flourish, where it doesn’t impart meaning except to differentiate Capitalism from socialism. More specifically, people use the term to differentiate between a market economy and a state-run planned economy.
It’s important to make note that what mainstream figures call Socialism is often a more democratic form of Capitalism — one with stronger unions and worker rights, better public services, some nationalised industry (education, healthcare, transport), a higher standard of living and quality of life for people. The things that typify Capitalism in their view — individualism, entrepreneurship, markets — still exist, but as part of a more socially just society. We can look to many European countries as an example of what mainstream pundits would term Socialism, although many Socialists would of course disagree.
What mainstream voices call Capitalism — the free market economy — is the most predatory form of Capitalism, with weak labour rights and social rights, no national industry and poor public services, and a high degree of competition between people, businesses, and nations. This reached its apogee in the late 20th century — an era termed Neoliberalism.
A society without wage labour — Communism — is one where society is so technologically and socially advanced that the majority of people wouldn’t have to work for money, and they would still have access to all the goods and services they need to live full, happy, and free lives.
It’s important to mention that there is lively academic debate about the meanings of the terms Capitalism, Socialism, and Communism, and how they relate to each other — and whether the Communist countries of the 20th century were actually Communist in anything other than a name. This debate is beyond the scope of this essay, although I have referred to it in other work, and will do so in future pieces.
The progressive perspective
Socialists, anarchists, and other progressives will generally use the mainstream definition of Capitalism, with two differences. First, they’ll emphasize how either a state-run planned economy or full-blown worker-centered Socialism is a more efficient and more ethical way of allocating resources in society. Second, they’ll focus more on workers as the central economic actors within Capitalism, and counterpose them to bosses or owners of companies — or billionaires. Socialists will also focus on class struggle as an important aspect of Capitalism, as well as connecting economic inequality with other forms of inequality, such as racial or gender inequality.
If we think of Capitalism as a purely economic system, it’s hard to imagine that it could be the cause of racial disparity or gendered violence, especially today. We can understand how it might negatively impact workers, but how can the production and consumption of goods and services be somehow part of gendered, racial, and sexual violence?
The key for progressives is that Capitalism is not just economic, but socio-economic. For most, the economic inequality created by Capitalism fosters social inequality. From this perspective, Capitalism impacts politics, culture, human relationships, and psychology — both social and individual.
Progressives in general see Capitalism as having racial and gendered dimensions — it is a racist, sexist, patriarchal socioeconomic structure, whose byproducts are waste, consumerism, corruption, mental health crises, nationalism, violence, and death.
Changing Capitalism in an economic sense would thus have an impact on extra-economic social issues.
The Marxian perspective
The Marxian perspective differs from the above in that it takes Marx’s writing, and in particular the work Capital (Das Kapital), as the standpoint for understanding Capitalism. This perspective is termed ‘Marxian’, because the positions are derived from a direct interpretation of Marx, as opposed to ‘Marxist’, which relates to the broader intellectual tradition that followed and expounded on Marx’s writing (indifferent, not always compatible, directions).
From this perspective (which generally aligns with the progressive perspective), Capitalism is not an economic model among many, but a social totality of which the economy is an aspect — an important aspect, but still just one part of something much greater. The economic aspect is just the part that’s most visible, like the section of an iceberg that remains above the water. The damage to passing ships is done primarily by what’s underneath the water. In the same sense, the economic aspect of Capitalism is not the foundation of the social aspects but is a part of a dynamic interconnected whole.
Unlike many progressive positions that foreground the economic, the Marxian position suggests the economic, psychological, cultural, and political are dynamically interrelated — not unidirectional.
Capitalism is thus the first truly global social system, incorporating practices, beliefs, and conceptions of the self that include practically all humans on earth. All of global society marches to the same drum, with some surface economic, political, and cultural differences. This even extends to how people in different parts of the world organise against the worst excesses of Capitalism. The ability to organise effectively is in some ways predicated by the interconnectedness of Capitalist society.
It’s important to stress that although, in this view, Capitalism is in fact synonymous with modern society in its entirety, it’s also ‘historically specific’ — which means that modern society is not just a continuation of pre-modern society. More specifically, Capitalism is not just a natural progression from Feudal society, but rather the structure of modern society is totally alien to that which came before — it is specific, and unique, in history.
One of the things that separates Capitalism from all prior human societies is that it is not driven by individual human agents, but that the entire social system drives itself. In that sense, it is an alien form, created by human interaction, but that dominates human interaction. The growth dynamic of Capitalism, which also connects all the different aspects of the social system, compels us to act in a way that recreates the foundations of the system itself. Capitalism— the interconnectedness of politics, economics, culture, and human relationships — drives itself.
Of course, this is not to say that there is no human agency. We have agency, but it is limited. We are compelled to act in specific ways in society, and it is only through exercising our agency with others that we can go about transforming the world around us, in ways that allow us greater freedoms, and the possibility for greater change.
It is imperative, then, that we should still be holding politicians, CEOs, and other individuals responsible for their actions, as well as building the capacity to move them or force them out of Power. However, Capitalism will continue to generate the types of unconscionable personalities, laws, and institutions that limit transformational possibility, as long as the drive for growth is central to modern society. Real change is predicated on long-term struggle.
Closing remarks
The idea that Capitalism is an economic model and set of practices isn’t a mistake: it’s just not the whole picture. Our common sense understanding of it is that ‘the economy’ — the world of business, trade, and finance — is based on real appearances. This is part of the reason that many on the political centre and right see Capitalism as a uniquely positive thing — with social problems largely unrelated to its development.
It’s important to say that although Capitalism has subsumed human society, that doesn’t mean that it can’t be overcome. In fact, it is modern society’s interconnectedness that holds the key to its transformation.
Finally, Capitalism is a word that can mean everything, and in doing so, add absolutely nothing. As organisers and activists, we have to be careful when using the term that we’re not weakening its impact by using it to describe literally everything. When we’re in activist circles it’s important to clarify terms and ideas as much as possible and avoid using terminology which exaggerates or confuses. We should be aware that most people see it as economic, and take that into account when talking to others, or each other.
This is no easy task, but clarity of concepts, structures, and meaning, is nevertheless an important part of the strategic struggle for social transformation.
If you enjoyed this essay, consider supporting me on Patreon, where I’ll be posting additional notes, digressions, and full responses to comments.
