<p>In <a href="http://journals.sagepub.com/doi/abs/10.1177/0003122412468882" rel="nofollow noreferrer">this article</a>, sociologist Erik Olin Wright provides a definition of 
capitalism (from a socialist tradition):</p>

<blockquote>
  <p>Many people equate capitalism with the idea of a market economy. Capitalism is not simply an economy in which markets play a central role in 
  coordinating economic activity; it is a specific kind of  market  economy,  one  in  which  workers  do  not own and control the firms in which they work, capital  is  privately  owned  and  allocated  to  alternative purposes  on  the  basis  of  private  economic  returns  (or, equivalently, on the basis of private profit-making),  and  labor  is  allocated  to  economic  activities through labor markets.</p>
</blockquote>

CC BY-SA 4.0
2019-09-11T04:13:08.273Z
This definition still doesn't seem to get to the essence of capitalism, which seems to be [considering money a means of production](https://economics.stackexchange.com/q/11358/4101).
Geremia
CC BY-SA 4.0
2024-09-29T14:47:33.773Z
Erik Olin Wright is a Marxist and not a credible source for economics definitions.
user76284
CC BY-SA 3.0
2017-09-01T08:11:15.750Z
2017-09-01T08:11:15.750Z
luchonacho
<p>What are the <strong>necessary and sufficient</strong> conditions for an economic system (or mode of production) to be classified as "Capitalism"?</p>

<p>Is it markets? Is it for-profit corporations? Is it limited liability companies? Is it workers selling their labour to capitalists/employees? Is it freedom to set up companies? Is it a low degree of government productive activity? Is it a subset of these or other elements? </p>

<p>I imagine the answer would depend on a particular schools of thought, so in principle I would expect different answers.</p>

<p><em>Disclaimer 1</em>: this question is not requesting <strong>opinions</strong> about what capitalism is, it is not, it should be, it should be not, but authoritative answers, with proper references.</p>

<p><em>Disclaimer 2</em>: for those voting to close this as <em>too-broad</em>, <a href="https://economics.meta.stackexchange.com/questions/1694/is-this-question-on-topic">I asked on meta</a> whether this question was on-topic, and (albeit not a popular post) it seems people agreed it was.</p>

CC BY-SA 3.0
2017-08-08T08:40:52.887Z
I don't think such references exist (unless you mean references to someone else's opinion of which there are plenty) but you should add the "reference request" tag.
Giskard
CC BY-SA 3.0
2017-08-08T09:44:48.020Z
The older word is "capitalist" which just describes the owners of productive capital. The word capitalism was used first by early socialists and was used to describe a system in which capitalists, not workers, were allowed to own productive capital. I think today capitalism is an ill defined word and different people use it to describe different things. In it's original meaning it has nothing to do with free markets, just property rights to the "means of production".
Tobias
CC BY-SA 3.0
2017-08-09T01:22:04.603Z
formally defining capitalism xd *dabs furiously* we anthropology now boyz
Kitsune Cavalry
CC BY-SA 3.0
2017-08-09T06:03:06.837Z
@Tobias That sounds like an answer, If you could add some references too, it would be great.
luchonacho
CC BY-SA 3.0
2017-08-09T09:42:13.043Z
I wanted to write that economists never use the word capitalism, preferring to stick to better-defined terms. But then I remembered that Friedman wrote a whole book called Capitalism and Freedom.
Ubiquitous
CC BY-SA 3.0
2017-08-09T09:48:35.613Z
@Ubiquitous Yes, it remains a [popular topic](http://www.jstor.org/action/doBasicSearch?Query=capitalism&acc=on&wc=on&fc=off&group=none), and it inserts neatly in a whole category of [JEL codes](https://www.aeaweb.org/econlit/jelCodes.php?view=jel#P).
luchonacho
CC BY-SA 3.0
2017-08-10T12:48:46.183Z
I make this a comment and not an answer specifically because it is an opinion. However, I am curious if my opinion aligns with others' opinions. I have always thought of this in terms of state vs. private ownership, degree of regulation, and wealth redistribution mechanisms. Anyone else want to add? I am sure I am missing something.
123
CC BY-SA 4.0
2019-09-11T04:14:09.647Z
I'm surprised this question was closed as too broad. It seems the word "capitalism" is what's used too broadly, to mean any free market economy…
Geremia
<reference-request><capitalism><schools-of-thought>
What are the defining features of Capitalism?
luchonacho
# What are the defining features of Capitalism?

(Asked by: username_0 on 2017-05-08)

What are the **necessary and sufficient** conditions for an economic system (or mode of production) to be classified as "Capitalism"?

Is it markets? Is it for-profit corporations? Is it limited liability companies? Is it workers selling their labour to capitalists/employees? Is it freedom to set up companies? Is it a low degree of government productive activity? Is it a subset of these or other elements?

I imagine the answer would depend on a particular schools of thought, so in principle I would expect different answers.

*Disclaimer 1*: this question is not requesting **opinions** about what capitalism is, it is not, it should be, it should be not, but authoritative answers, with proper references.

*Disclaimer 2*: for those voting to close this as *too-broad*, [I asked on meta](https://economics.meta.stackexchange.com/questions/1694/is-this-question-on-topic) whether this question was on-topic, and (albeit not a popular post) it seems people agreed it was.

**Tags:** reference-request, capitalism, schools-of-thought

> **Comments:**
> **username_1**: I don't think such references exist (unless you mean references to someone else's opinion of which there are plenty) but you should add the "reference request" tag.  
> **username_2**: The older word is "capitalist" which just describes the owners of productive capital. The word capitalism was used first by early socialists and was used to describe a system in which capitalists, not workers, were allowed to own productive capital. I think today capitalism is an ill defined word and different people use it to describe different things. In it's original meaning it has nothing to do with free markets, just property rights to the "means of production".  
> **username_3**: formally defining capitalism xd *dabs furiously* we anthropology now boyz  
> **username_0**: @username_2 That sounds like an answer, If you could add some references too, it would be great.  
> **username_4**: I wanted to write that economists never use the word capitalism, preferring to stick to better-defined terms. But then I remembered that Friedman wrote a whole book called Capitalism and Freedom.  
> **username_0**: @username_4 Yes, it remains a [popular topic](http://www.jstor.org/action/doBasicSearch?Query=capitalism&acc=on&wc=on&fc=off&group=none), and it inserts neatly in a whole category of [JEL codes](https://www.aeaweb.org/econlit/jelCodes.php?view=jel#P).  
> **username_5**: I make this a comment and not an answer specifically because it is an opinion. However, I am curious if my opinion aligns with others' opinions. I have always thought of this in terms of state vs. private ownership, degree of regulation, and wealth redistribution mechanisms. Anyone else want to add? I am sure I am missing something.  
> **username_6**: I'm surprised this question was closed as too broad. It seems the word "capitalism" is what's used too broadly, to mean any free market economy…  

---

## 1 answers

### Answer by username_0 on 2017-09-01. Score: 0

In [this article](http://journals.sagepub.com/doi/abs/10.1177/0003122412468882), sociologist Erik Olin Wright provides a definition of
capitalism (from a socialist tradition):

> Many people equate capitalism with the idea of a market economy. Capitalism is not simply an economy in which markets play a central role in
> coordinating economic activity; it is a specific kind of market economy, one in which workers do not own and control the firms in which they work, capital is privately owned and allocated to alternative purposes on the basis of private economic returns (or, equivalently, on the basis of private profit-making), and labor is allocated to economic activities through labor markets.

> **Comments:**
> **username_6**: This definition still doesn't seem to get to the essence of capitalism, which seems to be [considering money a means of production](https://economics.stackexchange.com/q/11358/4101).  
> **username_7**: Erik Olin Wright is a Marxist and not a credible source for economics definitions.  

---

