Some political ideologies (eg Libertarianism, Anarcho-capitalism) make support of their notion of capitalism crucial to their identity, these groups might, or might not support other ideologies laying claim to capitalism.
Overview
As with many common words, and most particularly ideologically laden words, "capitalism" has many meanings. There can be great confusion amongst these meanings, and readers must be careful of which meaning a writer intends in any particular usage.
"Capitalism" defined as the economic system of the private ownership of capital goods, is distinct from "capitalism" as an ideology, that is the philosophical advocacy of that system. Of course, the precise ideology meant by "capitalism" in the latter sense differs: what a Marxist or Green may describe as capitalist ideology may seem thoroughly alien to what an advocate of laissez-faire liberalism means capitalism as an ideology, that is, the free trade of property rights.
Some argue that capitalism as a system and capitalism as an ideology go hand in hand. This view is often founded upon the Marxian idea that ideology is largely a consequence of underlying economic realities -- or the simplification of that idea which holds that people favor ideologies which justify their behavior or privilege. This viewpoint is often held by liberals, who regard an "open society" as necessary for capitalism, and economic freedom as being essential for an open society.
Whether capitalism is, as Marx held, the natural ideology of the class of business owners, capitalists, is itself controversial. Indeed, Adam Smith looked on the tradesman class with suspicion, and warned that they would engage in attempts to fix prices, gain government monopolies, or attempt to stiffle competition. David Riccardo defined the rent collecting class as "parasitic", producing no "value".
Business corporations have frequently favored forms of mercantilism, under which the state supports domestic business against foreign interests. Mercantilism is usually not identified as a form of capitalism, though many nations engage in mercantilist policies from time to time even if nominally capitalist in their ideology.
Modern Japanese capitalism after World War II might be seen as capitalist mercantilism, while the European mercantilism of the period before 1600 or so has been seen by some economic historians as being pre-capitalist. Further, Austrian school economists regard mercantilist policies as an interference with free-market capitalism.[1] For them, "capitalism" by definition involves free markets and free markets by definition involve free trade and free enterprise, which are two aspects of the economy that mercantile policies seek to regulate: both what can be imported, and what areas of development receive capital support.
Since capitalism is a word which is considered both an epithet and a compliment, and because of the diversity of both ideology and theory involved, the use of the word often reduces to, alternately a straw man or a shibboleth, used to damn or justify almost any imaginable policy choice or social arrangement.
Political ideologies related to capitalism
- Libertarianism, which can be considered a branch of classical liberalism, defends a capitalist free market with minimal state intervention. (See laissez-faire.) Minarchist libertarians see the role for government in the economy as solely defending the rights of the participants against violence, theft, fraud, and damages such as pollution.
- Anarcho-capitalists see no role for government whatsoever. They believe that all government functions, including physical security and the adjudication of commercial disputes, will be better achieved by market mechanisms, such as mercenary armies and private arbitration.
- Objectivism argues that capitalism is a social system based on the protection of individual rights, especially property rights, including the private ownership of resources or capital, since free markets cannot exist without free men who act rationally and within the bounds of their unalienable, and rationally derived, rights.
- Conservatism varies depending between countries in its specific stances. In Western nations, conservatives often defend the status quo of capitalist practices. These are often called business conservatives. Many people who call themselves politically conservative, however, prefer a government-regulated capitalism (sometimes called "mercantilism") over free-market capitalism. According to them, free-market capitalism disrupts traditional ways of life and what they often call "family values". Thus, others might classify conservatives as being in favor of a mixed economy.
- Liberalism because of the broad application of the word, not every "liberal" party makes support for unrestricted laissez-faire capitalism part of its ideology. However, most liberal parties over the course of the 20th century, have made continuance of capitalism as the central part of the economy a primary objective, and have made free trade a centerpiece of their economic programs. In many contexts liberalism is synonymous with reduction in regulations, trade barriers and state monopolization, and liberalization the political and economic process of accomplishing these goals. Again the applicability is context dependent.
- Fascism is often an anti-Communist ideology meant to find "a third way," arguing that it is defending the public from the socialist or Bolshevik forces and the wealthy elite. Many supporters of capitalism as a liberating ideology would vehemently exclude such parties and governments from the definition of "capitalist," preferring terms such as "totalitarian," "closed society" or "corporatist." However pro-business conservative parties have, at various times, supported authoritarian or fascist states, or dicatorships in preference to Communist or soviet systems. Many business leaders, though not necessarily advocates of free-market capitalism, were sympathetic to the military rule of Augusto Pinochet in Chile following his successful coup in ousting Socialist President Salvador Allende.
Some ideologies explictly favor a mixed economy:
- Dirigisme defends a mostly free market within the nation, but proposes state intervention so as to direct the industry into directions of higher priority, or so as to make it more efficient.
- Social democracy argue for extensive state regulation and partial intervention in an otherwise capitalist economy. Social democrats occupy a position between socialists and classical liberals with regards to economic matters. They see a need for government to regulate employment, trade, and labor, and sometimes favor nationalization of certain industries. This view is also held by some liberal parties, particularly in regard to natural monopolies and public goods. See also welfare state. A prime modern-day example of a social democratic state is Sweden and its neighboring Scandinavian countries, which practice regulated capitalism but provide extensive government benefits for their respective populations.
- Distributism desires an economy with private property and with almost all people possessing a means of production. This would take place in for example a country of subsistence farmers. In a distributist economy, laws would be made to restrict large corporations from taking over. Distributists favor achieving these goals not primarily through government regulation, but firstly through grass roots efforts and collaboration.
- Fascism can also mean establishing a "war economy": a state-controlled economy with powers delegated to government for the purpose of regimentation of business and the suppression of opposition, a militarized central government. Socialists sometimes describe modern capitalism as "fascist", meaning an analogy to historical fascism with its cooperation (or cronyism) between industry and government. (See Militarism)
Some ideologies oppose capitalism and support a collectively run economy:
- Socialism argues for greater public control of the economy, under a more extensive kind of democracy than is usually seen in capitalism. Areas of private ownership may remain in certain sectors (such as small businesses) under socialism, but most economic sectors are run by the state for the benefit of the populace at large. In particular, the state is to control the "commanding heights" of the economy, such as the banking system and the major industries.
- Communism goes farther in the direction of government and/or social control of production, which calls for the overthrow, democratically or by revolution, of the capitalist system and the establishment of public ownership of the means of production. Communists see socialism as a stage towards the establishment of a stateless and classless economy. Historical Soviet Communism, a system of Party-controlled dictatorship (sometimes referred to as "Stalinism"), is distinct from the Communist ideal.
- Anarchism strives for the immediate abolition of both the state and private property, and the establishment of a communal society quite similar to the one advocated by marxists as their final goal (but in contrast to the marxists, anarchists oppose the idea of a transitional socialist stage).
