The term "capitalism" is often used interchangeably with
"democracy," "freedom," and "free enterprise," but such usage is misleading and
inaccurate. There are at least three major meanings of the word "capitalism."
First, aristocratic
capitalism is where the laws treat those with high levels of capital
differently than those without.
In the U.S. Commercial Code, for example, investors
with a high net worth are allowed the best investments.
It is illegal for
companies to offer such investments to those with low or middle net worth.
The
idea is that government must protect unsophisticated investors from
debilitating losses, but the flip side of the coin is that such policies help
the rich get richer and prohibit the rest from such returns.
Under this model,
the gap between the rich and poor continues to expand.
Second, democratic
capitalism is pure free enterprise, where the government requires all laws
to treat everyone equally--regardless of their economic status.
The tenets of
such capitalism include representative government, free commercial
interactions, entrepreneurialism, and limited government.
This is the type of
capitalism that the American founders promoted.
Third, mercantile
capitalism occurs where the government is the major investor and where high
levels of regulation keep even non-governmentally owned companies under the
thumb of the government.
This is often called state capitalism, and it was
widely popular in the era of British dominance and is now the system of choice
in many Asian nations.
When most Americans say "capitalism" they are referring to
the democratic capitalism, but the United States is now following aristocratic
capitalism.
Indeed, most leaders of the current Right consistently promote
aristocratic capitalism while the Left is attempting to shift the United States
to mercantile capitalism.
There are few pushing the real solution: a return to
true democratic capitalism, or free
enterprise.
The thesaurus lists the following as synonyms of capitalism:
"free enterprise, private enterprise, and entrepreneurship."
Again, these
meanings are only consistent with free enterprise, not with aristocratic or
mercantile capitalism.
Social Leader Daily by Oliver DeMille
