Mr. Moderate

Similar to socialism on the left, capitalism on the right is characterized by such a huge range of concepts that it overlaps with virtually everything except the most extreme forms of fascism and communism. Any economic system which allows a generally free public market for goods and services, and which allows individual businesses to compete for their own personal profit, can be said to be “capitalistic” in some sense.

The central rule of capitalism is the Law of Supply and Demand. Successful businesses make the biggest profit, while unsuccessful businesses are allowed to fail due to lack of profits and/or an inability to pay their bills. The people in a capitalist system have two roles: one as workers (with which role they earn an income) and the other as consumers of goods and services (with which role they spend their earnings). The objective of business then becomes to pay the workers as little as possible and to charge as much as possible for the goods and services produced by the workers. The part left over is profit, and that goes to the business owners.

In a pure capitalist system, the government adopts a totally “hands off” attitude towards business. This state of affairs existed in the United States in the late 19th century. In such a system, the government does not even act to prevent fraud or force in coercing economic transactions (contrast with libertarianism). For instance, in the late 19th century, big businesses were allowed to bring in armies of thugs to suppress organizing activities by workers (the early union movement). And the only restriction on fraud was the ancient maxim of caveat emptor.

The modern view of capitalism, which arose in the early 20th century in the United States, is that the government must intervene to prevent the worst excesses of unrestrained capitalism. As the government intervenes to greater and greater degrees, the system becomes ever closer to being better described as a socialist economic system rather than a capitalist one.