An Important Distinction: ‘Capitalism’ vs. a ‘Market-based Economy’
The latter can exist without the former.
People have very different definitions, much less conceptions, much less perceptions regarding ‘capitalism’. Both its proponents and its opponents tend to conflate capitalism with ‘free markets’.
‘Free-market capitalism’ is, as I see it, about as inaccurate as a term can be. “Free-market” implies competition, and that is the last thing any producer of any good or service actually wants. The giantism that is the essence of capitalism is motivated by a desire to dominate a market — and the closer to total, absolute domination, the better.
It is the scale of production that distinguishes capitalism. Yet, the opponent of capitalism tends to distrust any economic element that is associated with it, such as the profit motive and private ownership of means of production.
Please note the absence of “the” before “means:” both capitalism and a market-based economy can exist with a mixture of private and public ownership of the means of production. That is especially the case if one substitutes “control” for “ownership.” The latter implies the former, but society can, through government, exert various forms of control over private enterprises for the sake of the common good — and without taking away ownership, much less ‘destroying’ the market-based economy or capitalism.
The best definition of capitalism is, I think, ‘mass production of goods and services for sales in geographically extended markets’. That definition implies several things. One is that the old Soviet Union was a form of capitalism, one with almost no private ownership of means of production. (Workers on collective farms were allowed small private plots — that outproduced, acre for acre, the collectives.) That system is often referred to as ‘state capitalism’. Another implication of that definition is that capitalism actually goes back as far as civilization does: for as long as civilization has existed there has been long-distance trade of mass-produced goods. It also implies that bondage slavery and serfdom for purposes of mass production are perfectly compatible with capitalism. The substitution of ‘wage slavery’, in which people are paid money to be used as machines (or draft animals), for bondage slavery, in which people are property, and serfdom, in which people are not property but are bound to property, was part and parcel of a transition from property as the prime determinant of economic power (and political power, in aristocracy) to establishing money in that position (politically, oligarchy — which can exist as a product of the power that money can bestow, whether a formally recognized system of governance or not).
That might seem to imply that Marx’s analysis of capitalism is no longer relevant. There is a sense in which that is true. To be focused on ‘private property’ is nowadays to be looking at the wrong thing. Anyone who would want to challenge oligarchy must recognize the ground on which it stands: money.
On the subject of money, on the other hand wage slavery is a real thing and it does accurately imply the persistence of exploitation. In every business there are people who determine what the distribution of remuneration will be, with the express purpose of minimizing the remuneration of most of the people employed in the enterprise in order to maximize remuneration of a few (or even just one). That is where and how exploitation takes place.
At any rate, the profit motive and an economy that is ‘market-based’ can both exist with or without capitalism. The latter refers to allowing markets — supply and demand — to set prices, with prices then determining how capital will be deployed.
While a market-based economy can exist with or without capitalism, no economy can exist without capital in some form. The economy is the process of producing and acquiring goods and services. Even when we produce goods (or services) for ourselves we acquire them by virtue of those efforts. Humans being the beings we are, we inevitably engage in exchange to acquire some if not most of the goods and services we need/desire. Exchange requires having something to offer. That can be our labor — physical or mental. That is often called ‘human capital’. Given that even producing goods/services for ourselves involves employing our own human capital, an economy that involved nothing but barter would still in that sense involve capital. Moving from there, any form of equipment used to produce any good or service is also capital, as is any real estate as a form of property involved in the production of any good or service. Finally, money can be a form of capital.
The point is that there cannot be any production of any good or service without the existence of capital in some form. Again, it is the scale of production that distinguishes capitalism. As the name implies, it is capital-intensive production. That scale includes human capital, plant, and equipment. The large scale of production extends to large-scale, capital-intensive transportation: ships, trains, trucks, and planes (in chronological order), which in turn require large-scale, capital-intensive infrastructure: harbors, railroads, roadways, and airports.
It is that last part of the system that invariably co-opts government into it. Once it has been integrated into the system, capitalism and government take on a symbiotic relationship in which neither can exist without the other (regardless of the protestations of capitalists). The dependency of government on the taxation of economic activity for its revenue puts it in a disadvantageous position, giving capitalists a strong upper hand — in addition to the other sources of power that capitalists can and do wield. It is in that sense that capitalism can be accurately referred to as not merely a mode of production, but a strong, if not to say overwhelming political force as well in any society dominated by capitalist production. And nowadays capitalism dominates the planet and every nation on it, whether this one or that one is actually home to any capitalist enterprises or not.
Yet, it cannot be denied that as a mode of production capitalism with wage slavery has made possible widespread enjoyment of material goods that historically would have been limited to the rich (i.e., those with property). At the same time, it cannot be denied, either, that capitalism as a mode of production generates vast power in the form of money, power that inevitably leaks into the rest of society. The point of this article is that the profit motive and private ownership of means of production within a market-based economy are separate matters from capitalism. They are not the problem. Finding some way of preserving those as well as the benefits of mass production while curbing the broader societal powers pursuant to capitalism is a goal worth pursuing.