What is Capitalism? ‘“ The History
Capitalism has been dominant since the 19th and 20th century. It has long been in existence and it is all about business for profit. Capitalism is defined as an economic system where business or firms are owned privately by individuals rather than the government. Capitalists exist to earn money and the competition in free market controls the prices, production and distribution of merchandise.
Actually, there is no exact definition of the word capitalism. There have been many perspectives about capitalism that economists, political economists and historians have been debating. However, different sectors agree that capitalism encourages economic growth.
Although capitalism’s domination was known in the 19th and 20th century, it is believed that it already emerged since the 12th and 13th century. Capitalism was derived from the Latin word capitale, which means ‘head’. Capitalism was known for ‘capitale” in the 12th and 13th century. During that time capitale would mean as funds, stocks of commodities or sum of money. Later on people would interchange the word with money, wealth, assets and even property.
On the mid 17th century records show that the term capitalism had already been in use. The word capitalist was used by Hollandische Mercurius to refer to the owner of a capital. Later on, many have followed and the usage of the word capitalism had been used on published books.
In a capitalist point of view, capitalism brings profit by production with the aid of labor to produce merchandise. In return for the labor, laborers are paid with wages. Everything or any means that contribute to produce goods for profit are part of capitalism. That also includes all properties and the land where production occurs. These means contributing to production of goods for profit are part of the so-called capital.
Socio-economists consider capitalism as socio-economic system. They emphasized that capitalism is not just about making profit but is also a way of thinking about social organization. It was also stressed out that capitalism means that every individual has the right to economic freedom. It is the exact opposite of communism, which was another broad topic to discuss.
As time goes by, the free market must evolve and adapt to the changes. Today, there are many variants of capitalism in existence. All have the same idea based on production for profit. Below are some of the most dominant variants of capitalism and some brief explanations.
Anarcho Capitalism ‘“ suggests the elimination of the state and dominance of individual in the free market.
Mercantilism ‘“ it pertains to capitalism that has something to do with doing business with other nations.
Free-market Capitalism ‘“ This is also known as the Laissez-faire which means free market.
Social Market Economy ‘“ a free market with minimal government intervention. However, the government imposes labor rights and unemployment benefits.
State Capitalism ‘“ government intervenes with capitalists. This may also mean that the business is state-owned.
Corporate Capitalism ‘“ this is characterized by a free or mixed market. There is dominance in hierarchy and bureaucratic corporations ‘“ requirements to pursue profit
Mixed Economy ‘“ This means a public and private ownership of production. There is usually a distinctive trend where dominance will be extreme. This may mean that at some point the dominance is owned by public production and vice versa.