Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor. In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in capital and financial markets whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are organized and managed as state-owned enterprises, or where there is otherwise a dominance of corporatized government agencies or of public companies such as publicly listed corporations in which the state has controlling shares. Marxist literature defines state capitalism as a social system combining capitalism with ownership or control by a state. By this definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production. This designation applies regardless of the political aims of the state. Many scholars argue that the economy of the Soviet Union and of the Eastern Bloc countries modeled after it, including Maoist China, were state capitalist systems. They also argue that the current economy of China constitutes a form of state capitalism.
Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, usually some form of socialism.
Private property is a legal designation for the ownership of property by non-governmental legal entities. Private property is distinguishable from public property, which is owned by a state entity, and from collective or cooperative property, which is owned by a group of non-governmental entities. Certain political philosophies such as anarchism and socialism make a distinction between private and personal property while others blend the two together. Private property is a legal concept defined and enforced by a country's political system.
Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.
The nature of capitalism is criticized by anarchists, who reject hierarchy and advocate stateless societies based on non-hierarchical voluntary associations. Anarchism is generally defined as the libertarian philosophy which holds the state to be undesirable, unnecessary and harmful as well as opposing authoritarianism, illegitimate authority and hierarchical organization in the conduct of human relations. Capitalism is generally considered by scholars to be an economic system that includes private ownership of the means of production, creation of goods or services for profit or income, the accumulation of capital, competitive markets, voluntary exchange and wage labor which has generally been opposed by anarchists historically. Since capitalism is variously defined by sources and there is no general consensus among scholars on the definition nor on how the term should be used as a historical category, the designation is applied to a variety of historical cases, varying in time, geography, politics and culture.
Marxism is a method of socioeconomic analysis that uses a materialist interpretation of historical development, better known as historical materialism, to understand class relations and social conflict as well as a dialectical perspective to view social transformation. It originates from the works of 19th-century German philosophers Karl Marx and Friedrich Engels. As Marxism has developed over time into various branches and schools of thought, there is currently no single definitive Marxist theory.
Criticism of capitalism ranges from expressing disagreement with the principles of capitalism in its entirety to expressing disagreement with particular outcomes of capitalism.
"Actually existing capitalism" or "really existing capitalism" is an ironic term used by critics of capitalism and neoliberalism. The term is used to claim that many economies purportedly practicing capitalism actually have significant state intervention and partnerships between private industry and the state.
Production for use is a phrase referring to the principle of economic organization and production taken as a defining criterion for a socialist economy. It is held in contrast to production for profit. This criterion is used to distinguish socialism from capitalism, and was one of the fundamental defining characteristics of socialism initially shared by Marxian socialists, evolutionary socialists, social anarchists and Christian socialists.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
State socialism is a political and economic ideology within the socialist movement advocating state ownership of the means of production, either as a temporary measure or as a characteristic of socialism in the transition from the capitalist to the socialist mode of production or communist society. Aside from anarchists and other libertarian socialists, there was confidence amongst socialists in the concept of state socialism as being the most effective form of socialism. Some early social democrats in the late 19th century and early 20th century such as the Fabians claimed that British society was already mostly socialist and that the economy was significantly socialist through government-run enterprises created by conservative and liberal governments which could be run for the interests of the people through their representatives' influence, an argument reinvoked by some socialists in post-war Britain. State socialism went into decline starting in the 1970s, with the discovery of stagflation during the 1970s energy crisis, the rise of neoliberalism and later with the fall of state socialist regimes in the Eastern Bloc during the Revolutions of 1989 and the fall of the Soviet Union.
Social anarchism is the branch of anarchism that sees individual freedom as interrelated with mutual aid. Social anarchist thought emphasizes community and social equality as complementary to autonomy and personal freedom. It attempts to accomplish this balance through freedom of speech, which is maintained in a decentralized federalism, with freedom of interaction in thought and subsidiarity. Subsidiarity is best defined as "that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry" and that "[f]or every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them", or the slogan "Do not take tools out of people's hands".
Eco-socialism, green socialism or socialist ecology is an ideology merging aspects of socialism with that of green politics, ecology and alter-globalization or anti-globalization. Eco-socialists generally believe that the expansion of the capitalist system is the cause of social exclusion, poverty, war and environmental degradation through globalization and imperialism, under the supervision of repressive states and transnational structures.
In Karl Marx's critique of political economy and subsequent Marxian analyses, the capitalist mode of production refers to the systems of organizing production and distribution within capitalist societies. Private money-making in various forms preceded the development of the capitalist mode of production as such. The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.
The socialist mode of production, also referred to as the communist mode of production, the lower-stage of communism or simply socialism as Karl Marx and Friedrich Engels used the terms communism and socialism interchangeably, is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of an economic transition. In this transition, the sole criterion for production is use-value, therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. Distribution of products is based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management. Surplus value goes to the working class and hence society as a whole.
Das Kapital, also known as Capital. A Critique of Political Economy, is a foundational theoretical text in materialist philosophy, economics and politics by Karl Marx. Marx aimed to reveal the economic patterns underpinning the capitalist mode of production in contrast to classical political economists such as Adam Smith, Jean-Baptiste Say, David Ricardo and John Stuart Mill. While Marx did not live to publish the planned second and third parts, they were both completed from his notes and published after his death by his colleague Friedrich Engels. Das Kapital is the most cited book in the social sciences published before 1950.
Social ownership is a form of common ownership for the means of production in socialist economic systems. These systems may encompass state ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Historically, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned by a single entity or network of entities representing society, but the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy. Social ownership of the means of production is the common defining characteristic of all the various forms of socialism.
A socialist state, socialist republic, or socialist country, sometimes referred to as a workers' state or workers' republic, is a sovereign state constitutionally dedicated to the establishment of socialism. The term communist state is often used synonymously in the West specifically when referring to one-party socialist states governed by Marxist–Leninist communist parties, despite these countries being officially socialist states in the process of building socialism. These countries never describe themselves as communist nor as having implemented a communist society. Additionally, a number of countries that are multi-party capitalist states make references to socialism in their constitutions, in most cases alluding to the building of a socialist society, naming socialism, claiming to be a socialist state, or including the term people's republic or socialist republic in their country's full name, although this does not necessarily reflect the structure and development paths of these countries' political and economic systems. Currently, these countries include Algeria, Bangladesh, Guyana, India, Nepal, Nicaragua, Portugal, Sri Lanka and Tanzania.
Crisis theory, concerning the causes and consequences of the tendency for the rate of profit to fall in a capitalist system, is now generally associated with Marxist economics.
