Bryan Caplan muses on the subject of “capitalism” vs. “free-market economics”:
- Should libertarians oppose “capitalism”? (EconLog)
The core of his post is the following:
Sheldon [Richman] elsewhere goes on to argue that libertarians should actually say that they oppose capitalism:
We are a group of libertarians who understand that historically the word “capitalism” has meant, not the free market, but crony capitalism — that is, collusion between business and State at the expense of consumers/workers. Thus we refuse to use the word “capitalism” to describe what we favor: individual liberty in all respects and free, competitive markets. We believe that what we have today IS capitalism — and we oppose it.
I’m not convinced. If we were starting from scratch, I agree that it would be great to scrap both “capitalism” and “socialism.” Etymologically, capitalism does sound like a system of rule by capitalists for capitalists – and socialism sounds like a system of rule by society for society. Since neither etymological suggestion is true, I wish the terms had never been coined.
As Sheldon admits in his talk, however, changing words is like changing currencies. If they’re already widely accepted, you need a really good reason to abandon them. Awkward etymology notwithstanding, I think the concepts of capitalism and socialism are good enough to keep using.
It’s a pretty good point. On the other hand, we call ourselves “libertarians” because the original term “liberal” has, on this continent at least, been stolen by the socialists — to the point where damn near half the comments on any libertarian blog post rail against the evil machinations of the “liberals”. If “capitalism” has come to mean crony corporatism, with its attendant rent-seeking and regulatory capture, why not inflict it upon the liberals socialists as part of the linguistic package? Since corporatism cannot exist without a government that’s willing to meddle in the market, they surely deserve it.
Edit: Added an extra paragraph of Caplan’s article to the quotation in order to clarify his point.