Defining Capitalism

ECONOMIC AFFAIRS 35.1 (2015): 380-396

Abstract: This article aims to incorporate the essential features of capitalism in an operational definition that identifies capitalism per se (pure laissez-faire capitalism), and clearly excludes variations such as welfare capitalism and crony capitalism. By concisely highlighting the fundamental structures and mechanisms of capitalism, this essential definition facilitates defences of it that are more robust than those ordinarily offered. It also clarifies the relation between capitalism and phenomena with which it is frequently associated, and suggests a straightforward way of identifying and measuring the extent of capitalism in mixed economies.