What is Capitalism? Toward a Working Definition — Neal Harris and Gerard Delanty, 2023

This article argues that capitalism is often discussed without a clear definition.

Reviewing major theories from Marx, Weber, Polanyi, and contemporary scholars, the authors propose a practical definition based on seven core features that distinguish capitalism while still accounting for its many varieties across time and place.

1. Capitalism is widely used but poorly defined

2. Capitalism should be understood as an ideal type, not a simple yes-or-no category

3. Capitalism cannot be reduced to a single economic relationship

4. Capitalism is defined by seven core features that work together

5. Capitalism exists in many varieties, but all depend on the same basic foundations

⭐ Star Facts (What Is Capitalism? Toward a Working Definition)

• The paper’s central argument is that capitalism cannot be reduced to a single thing—such as markets, private property, profit, competition, or exploitation. Instead, capitalism is best understood as the interaction of seven core features.
• The authors define capitalism through seven elements:
  1. profit and private appropriation
  2. competitive markets
  3. wage labor and commodity production
  4. property rights
  5. finance, credit, and debt
  6. state regulation
  7. growth through reinvestment.
• The paper argues that societies should not be classified as simply capitalist or non-capitalist. Instead, they should be judged by how closely they approximate these seven characteristics.
• Markets alone do not create capitalism. The authors note that sophisticated markets existed in places such as imperial China long before modern capitalism emerged.
• Capitalism has always depended on the state. Property rights, contracts, markets, and business activity require legal institutions and government enforcement to function.
• Growth is not merely a byproduct of capitalism but one of its defining features. Profits are continually reinvested to generate further profits, creating a built-in tendency toward expansion.
• The authors argue that many important capitalist activities—including landlordism, finance, debt, and rent-seeking—cannot be fully explained by Marx’s surplus-value model alone, which is why a broader definition is needed.
• Understanding capitalism clearly is necessary before meaningful discussions about socialism, post-capitalism, degrowth, or alternative economic systems can take place.

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