capitalism

noun

cap·​i·​tal·​ism ˈka-pə-tə-ˌliz-əm How to pronounce capitalism (audio)
ˈkap-tə-
: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

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Communism, Socialism, Capitalism, and Democracy

Communism, socialism, capitalism, and democracy are all among our top all-time lookups, and user comments suggest that this is because they are complex, abstract terms often used in opaque ways. They're frequently compared and contrasted, with communism sometimes equated with socialism, and democracy and capitalism frequently linked.

Part of the confusion stems from the fact that the word communism has been applied to varying political systems over time. When it was first used in English prose in the mid-19th century, communism referred to an economic and political theory that advocated the elimination of private property and the common sharing of all resources among a group of people; in this use, it was often used interchangeably with the word socialism by 19th-century writers.

The differences between communism and socialism are still debated, but generally English speakers use communism to talk about the political and economic ideologies that find their origin in Karl Marx’s theory of revolutionary socialism, which advocates a proletariat overthrow of capitalist structures within a society; societal and communal ownership and governance of the means of production; and the eventual establishment of a classless society. The most well-known expression of Marx’s theories is the 20th-century Bolshevism of the U.S.S.R., in which the state, through a single authoritarian party, controlled a society’s economic and social activities with the goal of realizing Marx’s theories. Socialism, meanwhile, is most often used in modern English to refer to a system of social organization in which private property and the distribution of income are subject to social control. (The term is also often used in the phrase democratic socialism, which is discussed here.)

Communism and socialism are both frequently contrasted with capitalism and democracy, though these can be false equivalencies depending on the usage. Capitalism refers to an economic system in which a society’s means of production are held by private individuals or organizations, not the government, and where products, prices, and the distribution of goods are determined mainly by competition in a free market. As an economic system, it can be contrasted with the economic system of communism, though as we have noted, the word communism is used of both political and economic systems. Democracy refers not to an economic system but to a system of government in which supreme power is vested in the people and exercised through a system of direct or indirect representation which is decided through periodic free elections. (For discussion about whether the United States is accurately described as a democracy or as a republic, see the discussion here.)

Readers should consult the individual entries for a full treatment of the various ways in which each of these four words is used.

Examples of capitalism in a Sentence

Capitalism is at once far too rational, trusting in nothing that it cannot weigh and measure, and far too little as well, accumulating wealth as an end in itself. Terry Eagleton, Harper's, March 2005
The United States has assumed a global burden—not just fighting terrorism and rogue states, but spreading the benefits of capitalism and democracy … Brian Urquhart, New York Review Of Books, 9 Oct. 2003
The city was then the great maw of American capitalism. Christopher Hitchens, Atlantic, August 2002
I am not the first to point out that capitalism, having defeated Communism, now seems to be about to do the same to democracy. The market is doing splendidly, yet we are not, somehow. Ian Frazier, On The Rez, 2000
Even Cuba's famed health-care system has been unable to resist the siren song of capitalism. The Frank Pais Hospital … now offers "for pay" surgery to foreigners. Ann Louise Bardach, Vanity Fair, March 1995
Recent Examples on the Web Thom’s designs reimagine men’s suiting—an icon of American capitalism, a symbol of one’s desire to rise above one’s station. José Criales-Unzueta, Vogue, 14 Feb. 2024 As the country participated in the gratuitous orgy of capitalism otherwise known as Super Bowl LVIII, the real ones know that even though the Chiefs came out on top in a down-to-the-wire overtime win over the 49ers, the bona-fide highlights of every Super Bowl Sunday are those super spots. Rob Ledonne, Rolling Stone, 12 Feb. 2024 And selling your soul (or at least a year and change of your life) to the man is no simple feat either, especially in the 21st century, where most jobs feel like swimming through muck as Americans navigate the polluted waters of late-stage capitalism. Chloe Berger, Fortune, 5 Feb. 2024 The original Squid Game painted an appropriately bleak portrait of capitalism by showing poor contestants competing for cash, even though all but one of them will die. Chris Snellgrove, EW.com, 3 Feb. 2024 Through these students’ interviews with Agatha Paul, a professor who writes about money, Reid unpacks the unsettling dynamics of college campus capitalism. Stuart Miller, Los Angeles Times, 30 Jan. 2024 It was established in 1901 through a merger of steel companies led by titans of American capitalism: John D. Rockefeller, J.P. Morgan, Andrew Carnegie and Charles M. Schwab. U.S. Steel was the nation’s first billion-dollar corporation. David J. Lynch, Washington Post, 30 Jan. 2024 But that wasn’t democratic capitalism, because Leonhardt disagrees with it. Dominic Pino, National Review, 25 Jan. 2024 Sociologists have long forecasted that capitalism run amok would enter the next stage of its evolution when the masses were given the means and the tools to unite on their political behalf. Megan Thiele Strong, The Mercury News, 25 Jan. 2024 See More

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'capitalism.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1833, in the meaning defined above

Time Traveler
The first known use of capitalism was in 1833

Dictionary Entries Near capitalism

Cite this Entry

“Capitalism.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/capitalism. Accessed 21 Feb. 2024.

Kids Definition

capitalism

noun
cap·​i·​tal·​ism ˈkap-ət-ᵊl-ˌiz-əm How to pronounce capitalism (audio)
ˈkap-tᵊl-
: an economic system in which resources and means of production are privately owned and prices, production, and the distribution of goods are determined mainly by competition in a free market
capitalist
-əst
adjective
or capitalistic
ˌkap-ət-ᵊl-ˈis-tik,
ˌkap-tᵊl-
capitalistically
-ti-k(ə-)lē
adverb

More from Merriam-Webster on capitalism

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