‘Capitalism’ Does NOT = ‘Free Market!’

You should read this one — all of it.  If you are Conservative, you need to rad it more than the Leftists do.

LESSONS IN LOGIC: Capitalism isn’t necessarily the same as the Free Market

I was reading a post on the Rio Norte Line.  It was written by a friend of mine, so I want to be sure to make it clear that I am not hostile to him.  Nor do I disagree with the essence of his post.  He is writing in opposition to government oppression, and I am certainly in allegiance with him on this point.  However, what struck me is the use of the word “Capitalism.”  For some time now, something has not been sitting right with me concerning the way we use the word.  It was when I read my friends post that the problem suddenly struck me, and the ramifications of my realization are as sweeping as those of realizing that the Constitution does not contain the principles and ideals of the Declaration.  This realization is really rather simple – so simple that we do not see it.  Capitalism is not the same thing as the free market.

We should start by asserting an eternal truth: that the natural order of economic activity among men is that of the free market.  It is only in and through the free market that the economic activates of humanity can conform to Natural Law.  Therefore, whenever a system is found that restricts or constrains the free market, that system is not a free market system and is in conflict with Natural Law.

That said, let’s start by looking at the definition of the free market:

Seriously, read the rest.

34 thoughts on “‘Capitalism’ Does NOT = ‘Free Market!’

  1. I often assume capitalism = “free market”.

    Consider: If China’s economic system is described as Capitalist, a system where everything is controlled by the government; then how can capitalism = “free market”?

    So now, Joe helps me understand, “words have meaning”, and now it is time to be more accurate and descriptive and use the terms “free market” as opposed to “capitalism”. “Free market” means as a producer, I am able to make decisions and choices to maximize my profits freely, without being prevented by government laws and regulations.

    Our founders envisioned a “free market”, as shown by “patents” being included in our Constitution:


  2. Capitalism: An economic system characterized by private or corporate ownership of capital goods, by investments that
    are determined by private decision rather than by state control, and by prices, production, and the distribution of goods
    that are determined mainly by competition in a free market.
    Websters Ninth New Collegiate Dictionary
    1985 Merriam-Webster, Inc.

    This still clarifies my definition of “Capitalism.”

    Where am I wrong on this definition?

    • Edward.
      Your definition is “what was” true.
      Now we have, Capitalism, so long as it is authorized/controlled by Government overseers. Which is why the term “crony-capitalism” was invented, and later misused to confuse the masses as to the cause of America’s economic problems.

      I think Joe’s point is:
      The definition of capitalism he used has “control or order” inherent in it. Which is the opposite of “free”.

      There are different kinds of capitalism.
      “Free market” or “government controlled, regulated or authorized”.
      Government controlled/regulated is “crony-capitalism” and historically known as “fascism”.

      China is often described as capitalist today. However I have never heard anyone describe China as “free.”

      • Texas,

        Not quite. The point is that there is no control on Capitalism. Private individuals can still become tyrants. And when they grow rich enough, they naturally do. That is when the free market ends.

        The point is this: there is no more virtue in Capitalism than Socialism. Neither guarantee individual rights and liberty. And this is why there is truth in the attacks leveled from both the right and the left. HOWEVER, neither is there a solution from any quarter that advocates the suppression of another individual.

        The free market is messy because it must be as unregulated as possible to be free while — at the same time — it must also be regulated, but ONLY to the point where powerful people cannot destroy it. Does that help clarify the problem?

  3. Joe,
    Just re-read your post and am amazed that you have to delve so deep in semantics to explain (define) your opinions
    and ideas (ideology).

    When I have a headache, I don’t need Dr Ben Carson to explain the functions of the brain, all I need is an aspirin!

    Capitalism = free markets

    • Edward,
      Wow. OK, but understand this: nothing is going to change unless people stop thinking “private ownership” is an insulation against tyranny. It isn’t.

      Also: there are no ‘semantics’ here. Your definition says “OFTEN” in terms of the free market — but not ALWAYS! Crucial distinction that you seem to want to ignore 😦

  4. texas95,
    When you change the word, you change the meaning (definition). “crony-capitalism” is not “Capitalism” and just as
    our current culture is trying to change the meaning of established words, I can understand where you are trying
    to “enlighten” me with this Capitalism definition.

    I hope that the future does not require the American public to carry a “Dictionary of The English Language” to be
    able to converse. I’m having a hard enough time with my Hebrew, Aramaic, Greek Bible trying to understand

    Good conversation here, good brain training when I read Joe’s posts.

    • Thanks Edward,
      I agree, but I have listened to others argue “capitalism” is the cause of our economic problems, citing “crony capitalism” examples as “capitalism”; when in reality arbitrary governmental controls and taxes are the true causes of America’s economic problems. And too often I have seen others confuse “crony-capitalism” for “free-market capitalism”. 😉

      • Texas,

        Adding an adjective neither changes the word nor does it necessarily change the meaning: rather, it clarifies it. Fro example:

        “white” paper does not change the meaning of paper. So ‘State” Capitalism does not change what Capitalism is/means — it only clarifies what form it is taking.

        What needs to be understood here is that ‘free market’ is not a ‘necessary’ aspect of the definition here. Just because Capitalism is most often connected with the free market does NOT mean the free market is a necessary part of the definition. After all, Fascism allows for private ownership of business. This means that Fascism can have a free market. It’s just that that market must obey the government if it wants to survive. We see this is how it worked under Hitler. SO long as you were in favor and did not do something Hitler did NOT like, you were free to operate however you pleased. And that is perfectly within the Webster’s definition Edward cited.

        What we are seeing here is how emotionally connected we have become to what we’ve been told the meaning of words is when — in reality — it is not necessarily so…

        • Joe, excellent:

          nice explanation and analogy; brings to mind this argument I’ve heard before:

          Hitler bought from Willy Messerschmitt while Ernst Heinkel was critical of Hitler’s regime when it forced sacking Jewish engineers. Consequently, Messerschmitt thrived and grew, while Heinkel was forced to sell his company to Herman Goehring and struggled to survive the 3rd Reich. Meanwhile many argue Heinkel’s designs were better than Messerschmitt’s, and would have helped Germany’s war effort substantially …..

          fascism: ahhhhh, history shows us where the progressives are going… a scorpion cannot change its character…

    • Joe and Texas have EXCELLENT points.

      But have to go with Edward on this.

      Because What is being talked about here are systems which in essence Are not defined by …Free will….Free Markets….. private property…..nor Capitalism.
      Capitalism…..( the Private capital or Group capital being used in an enterprise to exchange and/or produce goods , in demand by others, for the purpose of Profit or the increase of original capital…..or to produce an income stream from the enterprise for the sharing of the Group Partners or re-investment into the enterprise…at the discretion of the Enterprise owners and/or original capital owners ).

      When Gov’t becomes involved ……. Free Markets ….. Free will and any kind of freedom are extinguished …. by any methods necessary.

      • Don,

        You are trying to force the definition of Capitalism into the box you want it to conform. To do that, you have to ignore, even reject part of the definition.

        Capitalism is PRIVATE ownership of business, but this does NOT mean that the economy that results will be free. My examples are perfect illustrations of this point. So, insisting that Capitalism is ‘your way or the highway’ and making excuses for it when we find that it has grown into something we despise is NOT going to fix anything. All you are doing is the Leftist version of “Well, Socialism only fails because the wrong people try it, or because we just didn’t go big enough.”

        The truth is, China IS a Capitalist economy. I know, one of my best friends and most trusted business partners is Chinese and he owns his own business. He does quite well. But he lives under a Fascist government. There is no free will or free market there. But he is a private person and owns his business and makes his own decisions within the laws of his land, therefore, he lives in a Capitalist system. We call it State-Capitalism to distinguish that it is not a free market Capitalism — but it is STILL Capitalism.

        And that is all I am trying to get people to see. I blame myself here. I did not see this for years. But now that I do, it is obviously true — self-evident, even. But, at the same time, Leftists should NOT think I have come to their side. I have not. I see ‘part’ of their complaint. But I also see that they have formed their argument against Capitalism are fallacious for the same reasons: what they attack as unregulated markets are anything but. Yes, they are Capitalist, but they are NOT unregulated free markets. hat’s more, the Leftists solutions are worse than the status quo they attack. So I have NOT ‘gone over’ to their side and my ‘Conservative’ friends need to know and understand this. Neither have I become a Libertarian. I am just returning to my Classic Liberal inclinations that just naturally dwell within all liberty-loving people.

        • No Joe.

          China is Both Communist and Fascist….it has USED some of the mechanisms of Capitalism in Select parts ofthe Country in an attempt to turn their Communist economic disaster in the 1960s and 1970s around………… Nixon and the Big Government Crony Capitalists and RINOs helped facilitate this……as have the subsequent US “Leadership”. In fact it is NOT Capitalism. And niether is the Current Crony Capitalism current in the US.

          And sorry but your examples are NOT perfect. You are using a line of reasoning that closely follows the Occupy Wall Street one…..which mimics the “Capitalism has Failed” mantra. Mostly by repeating half-definitions, and simplistic definitions of what capitalism is. In one definition it says something to the affect that Capitalism is a “way to organize an economy…..”. I don’t agree with that definition and would counter that this Definition is in fact “informed by Marxist ideology”.

          Now you have had “Issues” with Corporations and Capitalism and such for a long time I think…….. At least since I’ve been here. And This surfaces every few weeks.

          I DO THINK I understand what you are trying to do and where your heart / mind are WRT Liberty. So I think Adam Smith and Milton Friedman and Rose Wilder Lane should be brought in to the over-all thinking/defining process.

          • Don,

            No, you are defining a definition so that reality MUST conform to everything you want it to be. THAT is a fallacious argument, my man — not mine. 🙂

            Even Wiki gets this one right.</a

            There is NOTHING in the definition of Capitalism that says it MUST be connected to a free market. Making such an assertion is a clear violation of the basic rules of logic (i.e. fallacious). Here is yet another definition of the term that mentions nothing of the free market, yet it is still accurate:


            [kap-i-tl-iz-uhm] Show IPA

            an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.

            Next, the 2 examples I gave ARE perfect to the point of my argument. I provided 2 real-world examples of private ownership of Capital being used to institute TYRANNY! They are private citizens. They own and operate private corporations. And they have the wealth to affect NATIONS — totally from outside any need of or for the government. Ergo, Capitalism is NOT a bulwark against tyranny. Rather, it can be just as much a vehicle for it as government. To deny this is to assert a falsehood.

            In researching this post, I found this blog page.

            I rather like what he has to say about the way Adam Smith described this issue:

            Although he is often described as the “father of capitalist thinking,” Adam Smith himself never used the term “capitalism”. He described his own preferred economic system as “the system of natural liberty.” However, Smith defined “capital” as stock, and “profit” as the just expectation to keep the revenue from improvements to that stock. Smith also made capital improvement the central goal of the economic and political system.

            It would seem that Mr. Smith and I share the same inclination toward liberty, and the system we call ‘Capitalism’ is an enemy of liberty. Just look at how the international corporation has trampled on the individual rights and liberties of individuals across the globe. How can one deny that this is an anti-liberty system? Even where government is absent, the same thing appears: oppression.

            Truth be told, it was to protect equal access tot he markets as much as anything else that our founders said we form governments in the first place. So I do not think I am off base here — not in the least 🙂

            • A “system” is not the same thing as “an ordered economy”…….it just isn’t.

              The first embodies many different things…..the second is by definition ….Directed….purposeful in usually one direction and highly tendentious.

              You are Con-flating different ideas and embracing definitions long-ago influenced by the stamp of Socialism / Marxism.

              Smith’s “preference” for the economic system of Natural Liberty…..is inclusive of the individual’s right to self-direct including His/ Her property ( Capital ). Capital as also defined as prior labor tranfered to some form of asset or Specie acceptable in the Free Market place ( which is a VERY broad arena…..meaning even a Collection of Automobiles could be accepted as such since it is transferable between two parties and thus transmutable to another means of application by one or other party).

              • Don,

                The term was heavily influenced by Marx. In many ways, HE is the one who wrote the definition. So denying it leads to the same issue you and I have concerning your denial of Burke’s definition of ‘Conservativism.’

                As for a system being different from an ordered economy: show me how. If I take all words used to define economic systems from you, how would you even discuss ‘economy’ — which is itself a form of system (that of a system of trade)? I think you are the one trying to confuse the issue to avoid the point.

                So, once more — as simply as we can.

                There is NOTHING in the definition — ANY DEFINITION — of Capitalism that says IT MUST be connected to a free market.

                The ONLY thing that is required for the definition is that ownership of the means of production/finance be held and controlled by private citizens. In this case, ‘private’ is understood to be anything NOT controlled by the government.

                And so my original argument stands: there is nothing inherently ‘free’ in the term/notion we call ‘Capitalism.’ We’re just been conditioned to think that way. And in this sense, those who have accepted this notion are no different than those who think freedom lies in government protection.

                We are back to the 2 sides of the same coin. This is a coin I wish to abandon in favor of liberty, because liberty does not dwell on either side of this coin.

  5. Joe,
    I’m not sure that you understand my position on your engaging in semantics. I would request you check your dictionary
    for the factual meaning of “Semantics.”

    Would also have you look up “Brevity?” Your use of it would greatly reduce my reading time understanding your

    My definition regarding “Capitalism” has not changed, considering your arguments, I think my position (on the definition) is stronger.

    I would recommend that you read Ayn Rand’s book: “Capitalism: The Unknown Ideal,” to fully comprehend my viewpoint
    on Capitalism. A small request, after all, It is Ayn Rand that brought me to the “Rio Norte Line.”

    • Edward,

      Oh, I understood you quite well. I understand all of this. I was just trying to give it a pass, but since you opened the door…

      You are the one who seems to be missing my point. Either you do not understand my point (which I doubt) or you are:

      A — changing the issue to suit your purpose or

      B — ignoring the facts at hand concerning the definition of Capitalism.

      You can cite Rand, and that’s fine. But Rand didn’t write the dictionary, nor coin the term ‘Capitalism.’ Marx would be a better authority than Rand.

      What’s more, you seem to be missing the logical definition of ‘necessary.’ I have done as you said and looked up the words you told me to look up, now YOU go look up the meaning of ‘necessary’ in the logical sense and tell me how you can claim Capitalism MUST be connected to a free market? It cannot. It is a matter of basic logic that the free market is not necessary to the meaning of ‘Capitalism’ any more than white is necessary to the definition of paper.

      And that brings us to the fallacy of equivocation — which is the point of this post. You tell me to read Rand, but if Rand uses the term, ‘Capitalism’ to describe a free market, then SHE HAS MISUSED IT HERSELF! However, being familiar with Rand, I suspect she actually makes it clear that she is using it to mean the free market by defining it as such. In that way, she can do so — BUT ONLY IN THE CONFINES OF HER IMMEDIATE WORK! Once the conversation goes outside that work, she can no longer do so without committing equivocation, and Rand understood logic more than well enough to acknowledge this — were she still alive to ask.

      And this is my point: that we have been conditioned to think of Capitalism as something it isn’t — not necessarily.

      In the same sense, we have been conditioned to think of ‘Conservatism’ as something in definitely is not.

      Those on the Left have been conditioned to think of other terms in ways that they are not, as well. This is how we are being controlled, and we will not break free of that control so long as we insist on retaining the way we have been taught to think of the world.

      That you and Don seem to think I am some how an enemy is proof of just how well this indoctrination works. To think me an enemy of liberty…. Well, let’s just say you must not have paid much attention to anything — ANYTHING I have ever written.

  6. Joe,
    I have paid attention to all you have written…

    That is why I find “The Rio Norte Line” so interesting. Also “Oil For Your Lamp.”

    If I totally accepted and believed every word, I would have to find another Blog to comment. I’m sure Don and
    the other Posters feel the same.

    Please do not think that I am trying to alienate or aggravate you to create hostility—I appreciate spirited conversation!
    I have noted that on previous posts.

    • Edward,

      It’s all good. I’m just trying to extricate myself from this ‘Matrix-like’ world we’ve had built around us and drag a few along with me. After all, I’m not Neo (but I could be Morphius 😉 )

  7. Pingback: (Snickering in the Peanut Gallery) | The Rio Norte Line

    • DaPoet,

      I understand what I think you are trying to say, but there ARE free markets. One example — and I mean ONE — is what we call the black market. There are others, and they generally do very well.

      • Black markets are not free since they are generally controlled by criminals who can impose their will on others. If the government does not regulate the market the sellers will fleece the buyers into starvation while the black market puts the sellers out of business.

        • DaPoet,

          Sorry, but that is Marxist propaganda. True, all markets are subject to the influences you mention, but they are not NECESSARILY subject to them. Heck, I’ve seen it first hand when I was in the Middle East. The truth is, free markets DO exist in this world. It’s just that, as soon as they are identified, people who have a compulsion to control others move in to regulate them (and others to exploit them — where they can).

          • Actually its just common sense while the illusion of a free market is maintained on behalf of the sellers intent on fleecing their customers.

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