Capitalism

Capitalism is an economic system characterized by private property ownership and private ownership of the means of production. Both individuals and companies compete for their own economic gain through the acquisition of capital and the employment of labor. Capitalism is based on the premise that government intervention in the economy should be minimized and that free enterprise, the forces of supply and demand, should determine the prices of goods and services and will ultimately maximize consumer satisfaction. The role of the state is to regulate and protect the public from the potential abuses of capitalism, which have historically ranged from slavery and apartheid to more contemporary monopolies, cartels, and financial fraud.

The principles of capitalism can be found in Adam Smith's The Wealth of Nations. Its modern importance began in the 18th century when the bourgeoisie (bankers, merchants, industrialists) began to displace landowners. However, the seeds of capitalism date from much earlier times and can be found in the writing of Aristotle, especially in the assertion that people pay most attention to their own private property and less to what is communally owned. In the 13th century, St. Thomas Aquinas believed in the naturalism of private property ownership, albeit with a humanist expectation that private ownership would permit access by those in greatest need. Mercantilism, or the expansion of nation-state wealth through exporting finished products for the accumulation of gold and silver, was the prevailing perspective that Smith rejected in The Wealth of Nations. Smith argued that mercantilism created an oversupply of money and, consequently, rampant inflation. The opposing force to mercantilism was the doctrine of laissez-faire, the idea that economic systems function best when there is no interference by governments. It is also based on the idea that there is a natural economic order that, when undisturbed, will lead to maximum well-being for the individual and therefore for the community as a whole. Smith, under the influence of David Hume, believed that in a laissez-faire economy, self-interest would bring about public welfare.

In contemporary evaluation, the idea of capitalism as more a political and moral system of belief than an economic one of private ownership is deeply embedded. Evaluation is a commodity of which the nature, availability, and cost are largely controlled by demand (by the government agencies and philanthropic foundations that fund most evaluation). In one sense, evaluation is seen as a rationalizing mechanism for determining what works in the best interest of the many; for example, in determining which antipoverty program leads to the greatest reduction in poverty. Evaluation works within the perceived role of governments in advanced capitalism and is presumed to aid in the amelioration of its ills. In addition, evaluation plays a key role in globalization, the expansion of capitalism across nation-states, through the examination of the quality and quantity of services and goods in developing nations receiving international aid.