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Paulo Roberto de Almeida
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Friday, January 10, 2014
Free Market Vs. Capitalism: Clearing up Some Confusion
It seems there's a lot of confusion about the relationship between the "free market" and "capitalism", so I'd like to clear things up:
technically the "free market" is a form of capitalism. The definition of capitalism is rather broad:
"an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."
According to this definition, most economic systems that are not state-controlled are capitalistic.
The free market, in its most pure and idealistic form, is what we refer to today as "the black market", or alternatively, "the underground economy". This is the most decentralized form of capitalism.
Corporatism is most centralized form of capitalism. It is essentially the same thing as socialism, only the states are substituted for corporations, government agencies for subsidiaries, bureaucrats for CEOs, and voters for shareholders.
In an ideal, free society, the free market would be the de facto form of capitalism, but such free trade has been so suppressed that it can only thrive underground. And incidentally, it has thrived greatly, at least on a global level, despite (or rather, because of) government oppression and intervention in the economy).
So when I say capitalism is completely different from the free market, this is what I mean: The capitalism in place today, around the world, is completely different from free market capitalism- it is in fact its polar opposite. And additionally, the polar opposite of Socialism is Anarchism, which goes to show that the advantages of capitalism may not be advantages at all. What brings us prosperity isn't capitalism, it's freedom!
technically the "free market" is a form of capitalism. The definition of capitalism is rather broad:
"an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."
According to this definition, most economic systems that are not state-controlled are capitalistic.
The free market, in its most pure and idealistic form, is what we refer to today as "the black market", or alternatively, "the underground economy". This is the most decentralized form of capitalism.
Corporatism is most centralized form of capitalism. It is essentially the same thing as socialism, only the states are substituted for corporations, government agencies for subsidiaries, bureaucrats for CEOs, and voters for shareholders.
In an ideal, free society, the free market would be the de facto form of capitalism, but such free trade has been so suppressed that it can only thrive underground. And incidentally, it has thrived greatly, at least on a global level, despite (or rather, because of) government oppression and intervention in the economy).
So when I say capitalism is completely different from the free market, this is what I mean: The capitalism in place today, around the world, is completely different from free market capitalism- it is in fact its polar opposite. And additionally, the polar opposite of Socialism is Anarchism, which goes to show that the advantages of capitalism may not be advantages at all. What brings us prosperity isn't capitalism, it's freedom!
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