Capitalism

Ideology

As a way of thinking, capitalism embodies a series of ideologies. It embraces the ideology of individualism, wherein individuals are seen as free to make market choices based on self-interest. Along with competition, supply, and demand, self-interest is thought to be a key mechanism for allocating resources in society. Some scholars also observe that the amalgamation of individual interest will benefit society as a whole. A second key tenet of capitalism is the Enlightenment idea of progress. This idea of progress is seen as synonymous with economic growth achieved through the exploitation of productive labor and technological advancement. The idea of productive labor is central to capitalist thought, viewed as vital to economic growth and central to a meaningful life. Some also argue that capitalism is almost entirely future focused. In the view of humans as rational and self-interested, attention is placed on the future of economic decisions. Finally, in capitalist modes of thinking, the object takes on specific significance. The gap between consumers and producers widens, and consumers have little or no social relationship with the producers of the goods they consume. In the absence of this set of social relations, increased emphasis is placed on objects of consumption, and individuals become increasingly defined by—and take meaning from—their role as consumers, as opposed to producers, of goods.

Etymology

A useful inroad to understanding capitalism might be a consideration of the etymology of the term. Early use of the word capital is associated with the trade in livestock. It evolved from the word capitale, which is based on the proto-Indo-European word caput, meaning “head.” It is also developed from the terms chattel and cattle, referring to movable property. While it is difficult to trace the first use of the term capitalism in English, novelist William Thackeray is widely cited as the first to refer to it in his 1854 text The Newcomes. In an essay published in 1851, a French socialist politician and one-time friend of Karl Marx, Pierre-Joseph Proudhon, argued that capitalism as an economic idea was analogous to government. In their earlier writings, Karl Marx and Friedrich Engels used the term capitalism only a few times, instead preferring to refer to the “capitalist mode of production,” in the three volumes of Das Kapital (1867, 1885, and 1894). It was not until the beginning of the 20th century that the term came into widespread use and began to stimulate debate. Werner Stombart's 1902 Modern Capitalism introduced the term to the political arena. This was followed in 1904 by Max Weber's use of the term in The Protestant Ethic and the Spirit of Capitalism.

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