Re: Oh, those gaussians (Was: Twin Studies)
Thu, 26 Aug 1999 18:52:30 -0700

It's curious that the free market system is known as "capitalism". The role of capital (generally, productive assets) in the system is significant but hardly defining.

I have heard it said that the term was coined by the opponents of the free market, who wanted to contrast it with their "socialism". "Socialism" sounds like it is about society, about people, while "capitalism" seems to be about capital, about money. It was a pejorative term which was designed to disparage and discredit the free market system, and to replace the terminology which was used previously (liberalism, laissez-faire, free markets).

If this is true, the plan was very successful, in that the free market system is today almost universally called capitalism.

In the end, though, the word has lost most of its bite. When children learn about capitalism today they are usually introduced to the term well before they have heard "capital" used in the economic sense, so the intended connotations are not present. "Socialism", too, is just a word for another economic system and does not bring warm fuzzies with it to people today, rather it carries connotations of bloated, bureaucratic governments and the failures of communism.