What does capitalism mean?
Capitalism is an economic system in which the means of production — factories, land, businesses, and capital — are predominantly privately owned and operated for profit. Prices, wages, and output are shaped mainly by market forces of supply and demand rather than by central planning. Emerging in Europe during the early modern period and expanding rapidly through the Industrial Revolution, capitalism became the dominant economic model of much of the modern world, taking varied forms from laissez-faire to regulated welfare-state versions. The term itself gained currency in the mid-nineteenth century, notably through critics such as Marxists, who used it to name the system they opposed. Today the word is neutral in scholarly contexts but politically loaded elsewhere: admirers associate it with innovation and growth, detractors with inequality and exploitation. Related derivatives include "capitalist," for both an adherent and an owner of capital, and the adjective "capitalistic."
nounAn economic and political system in which a country's trade, industry, and means of production are owned and controlled largely by private individuals or corporations rather than by the state, with prices and production guided chiefly by market forces.
- An economic system based on private ownership of the means of production and operation for profit under market competition.
"The country's shift toward free-market capitalism brought rapid economic growth alongside widening inequality."
"Critics argue that unregulated capitalism allows wealth to concentrate in the hands of a few."
"After the fall of the Soviet Union, many formerly planned economies transitioned to capitalism."
In ordinary usage capitalism is uncountable and has no plural. A plural form appears only in academic writing that contrasts distinct historical or regional varieties of capitalist systems.
"Historians have identified several distinct capitalisms, from mercantile Dutch trade networks to modern welfare-state models."
The word "capitalism" was popularized less by its fans than by its fiercest critics — Karl Marx never used the term himself, but his followers made it the standard label for the system he attacked.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of capitalism
The word capitalism derives from "capital," which came into English from Latin "capitalis" ("of the head"), via medieval Latin senses relating to movable wealth, and entered English in the seventeenth century from French and Italian trading vocabulary. The suffix "-ism" marks it as a system or doctrine. Although forms like "capitaliste" appeared earlier, the noun "capitalism" became widespread only in the latter half of the nineteenth century, popularized substantially through socialist critiques of the economic order. Cognates and relatives sharing the Latin root include "capitalist," "capitalize," and "capitulate."
Related word forms
How capitalism is actually used
Capitalism is an abstract noun with no plural in ordinary use. It carries strong ideological connotations: supporters often pair it with terms like "free enterprise," while critics may speak of "late capitalism" or "crony capitalism." The word is common in academic, journalistic, and political discourse across all registers, though it can sound charged in casual conversation.
Easily confused with capitalism
"Capital" refers to wealth or assets used to produce more wealth, while "capitalism" is the entire economic system built on such private ownership.