Claire asked:

Please could you explain what capitalism is? I have found plenty of information on the web
concerning the discussion of it, but no guide as to what constitutes a capitalist state.

Also, what then is the definition of a pre-capitalist state? Are some historical states (Greece, Rome
etc.) pre-capitalist, or simply not evolved enough to be fully capitalist?

On these two issues I am quite confused!

============

Well done Claire! A very significant question. Sorry to take so long in replying. This is partly due to
pure lethargy, and partly because I have been thinking about your question a great deal.

Some people think that philosophy, at least the Western Analytic version of it, is very much about
finding precise definitions. Now, I tend to think that philosophy is rather more than that, but, all the
same, you really have spotted a very important term which is crying out for definition. This 'Capitalism'
turns up all over the place, it seems to get used to mean 'trading in goods', 'being rich', 'owning
property' and all sorts of things. Everyone seems to know how to use the word, yet hardly anyone
seems to have paused to put together a decent working definition of it. Dictionaries, as you have
doubtless discovered, seem to be equally unhelpful, though they do tell us that the word 'Capitalism'
was first coined by French communists of the 1840's simply to give a name to the customary system
which their ideology was opposed to. So, in that sense, 'Capitalist' just means 'not Communist', and is
necessarily pejorative. Now, shall we have a go at a clear definition?

So, what do we know about 'Capitalism'? First of all, it is quite clear that 'capitalism' is derived from
the term 'capital', meaning 'that which is at the top', a word which seems to go back to the very
foundation of language. Equally clearly, 'Capitalism' is something to do with economics, and in that
field the word 'Capital' is used to signify 'those things which allow goods to be produced', such as
machinery, labour and so on.

Secondly, those who write about 'capitalism' all seem to be clear that it is something to do with some
special form of trading in goods which has arisen later in human development. The term is often used
simply to mean any form of buying and selling. But that can't be reasonable, for I can't imagine that
there ever was a human society in which goods were not traded. In the Bomvu ridge, in the Ngwenya
mountains of the Kingdom of Swaziland, there is evidence of a very large ochre mine dating back
40,000 years. Now, mining ochre is very much a full-time job, and you can't eat ochre, so that means
that the miners must have worked to exchange the ochre for other things, like food. I rather think that
the discovery that if I have a spare chicken, I can exchange it for your spare spear, is one of the
things which defines human society. So what is this special form of trading which constitutes
'capitalism'.

Here, I think, we have the definition:

CAPITALISM (n) A system of commercial organisation in which controlling interests in means of
production (Capital) are traded as if they were themselves commodities.

That means, if I own the corn mill and charge you, the farmer, to mill some corn for you, that is just
trading. If I sell you the mill itself, that, too, is just trading. But if I sell you just the permission to gain
the benefit from the mill, say I sell you a half share of the profits from the mill, then that is capitalism,
because it is trading in interests in a form of Capital Goods, namely, not the mill itself, nor its
products, but the benefit in the mill.

Whether there ever was a society in which interests in capital goods were not traded, I do not know.
Marx's assertion that capitalism grew out of feudalism and that out of family collectives is surely
nonsense (I'm afraid Marx was not a competent historian), for family collectives are perfectly capable
of trading capital interests, and we know, from records like the English Domesday Book, that such
trading went on, albeit not on today's scale, throughout the European medieval period. You will find a
most interesting article on the economics of Greece and Rome by Andrew Selkirk at
http://www.compulink.co.uk/~archaeology/civilisation/synopsis.htm, which, I think, makes it quite clear
that, (with a few reservations about Sparta), the classical civilisations did have capitalist trading.

What, then, do we mean by a 'Capitalist Society'? I don't think there can be any point at which
Capitalism suddenly popped into existence. Rather, its prevalence has increased and increased over
the centuries. Now, capital trading requires that the parties trust each other, because they are
generally trading in some future benefit, not something physical, so it would be difficult to imagine it
happening before a society had developed a system of civil law. After that, we might like to mark out
the point at which a society becomes formally Capitalist as the point at which a formal system of
Capital trading is established in a Stock Exchange. Not, mind, a commodities exchange, for that is
ordinary trading in goods, and can be traced back at least as far as the trading exchange in ancient
Rome called the Collegium Mercatorum. But in 1760 150 brokers were kicked out of the London
Commodities Exchange for rowdiness and formed a club at Jonathan's Coffee House to buy and sell
shares. In 1773 they voted to change the name to 'The Stock Exchange'.

We've put together, I think, a good definition of Capitalism here. I claim ownership of the copyright.
Would you like to buy a 50% share in the future benefit from it?

Glyn Hughes

The essential points here are: (i) who owns and controls the means of 'production, distribution and
exchange? and (ii) how is the allocation of production determined - ie who gets what?.

Try these definitions:

Communism/socialism: economic and political system under which ownership and control of the
means of production, distribution and exchange are in the hands of the State (effecting common
ownership and control on behalf of the people).What gets produced, how much of it and who gets it
are determined by direction of the State.

In contrast:

Capitalism: economic and political system under which ownership and control of the means of
production, distribution and exchange are in the hands of private individuals. What gets produced,
how much of it and who gets it are not determined by anyone's direction but by the 'invisible hand' of
the market process acting through the price mechanism and the profit motive.

Capitalism is usually associated with democracy; socialism, sometimes so; communism, not often so.

With a little historical research, it ought to be possible to discover whether Greek and Roman
societies were capitalist under theses definitions.

John Sartoris