Many of the common misunderstandings noted in the previous entry result from a fundamentally distorted view of what capitalism is (i.e. a gross misrepresentation of the nature of the economic system in which we are currently operating).
For instance, capitalism is often equated with free markets and private property. Yet, both free market economies and private ownership significantly predate capitalism (they are ancient); furthermore, capitalism actually impinges upon the freedom of the market in a number of ways (to be discussed in great detail later), and entails the socialization of a formerly private production process. Neither of these, then, can be the foundation of capitalism.
Similarly, capitalism is often defined negatively by an absence of state regulation of the market (the basis of the opposition between capitalism and socialism/communism). To the contrary, state intervention enabled the development of capitalism; capitalism is characterized by an expansion of state economic functions; and state involvement is necessary to the survival of the system. Once again, all of these claims will be supported at length in another post.
What, then, is capitalism?
The primary characteristic of capitalism is wage labor, plain and simple. Yet, the organization of production around labor as a commodity has absolutely earth-shattering implications, affecting all aspects of life. These implications will be the subject of my next post.
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