“But what’s so wrong with the word capitalism? Don’t you love the free-market?” an “Anarcho-capitalist” might ask.
To answer, that so many conflate free-market with capitalism remains one of the greatest disappointments of political terminology; completely divergent from the principle of free and voluntary association, as Kropotkin and Rothbard both aspire to create, the system of capitalism is one of economic exploitation by the definition of the word, or at least in its original phraseology. As created in the context of an economic system, the coinage of the word capitalism, far from referring to the actual substance of a free-market, mostly references the symptoms of the world seen by many socialists as exploitative. Proven indirectly from contemporary socialists describing capitalism as “the social system which now exists in all countries of the world” and directly from the nature by which the first anti-capitalists observed the capitalist mentality, that capitalism always meant economic coercion by the strong lording over the weak seems fairly ironclad. Arguing that capitalism is what modern society suffers from, socialists make it clear that capitalism is not synonymous with free-market, since the free-market does not at all resemble the capitalist society of today, the 19th century, or any era; furthermore, being indirect inheritors of the first socialist position on capitalism, it becomes easy to see that socialists merely argue against what they observe as the defined system of capitalism, and not against the logic of liberty itself.
My linguistics instructors told me that synonyms have to be used with care; two words never have exactly the same meaning. Otherwise, why have two separate words?
Mises, Rand and many others do conflate Capitalism with the Free Market, but they're not at all talking about the same thing that the socialist coiners of the term meant by it. Of course, capital, strictly speaking, is the stuff required to produce comsumable products, so there logical linguistic reason to try to steal the term. The trouble with the conflation is that it taints the Free Market in the minds of confused individuals, who see our capitalist system and all its problems and blame freedom as the cause.
Damning this system as capitalist, coining the term capitalism itself, the socialists are absolutely right! The system of capitalism, from which the socialists observed, absolutely existed and exists to exploit not only the workers, but every honest entrepreneur without connections to the violent state. Yes, originally used as a pejorative to describe the economic system of the day, the socialists and state-socialists (or Marxists) apparently delved no deeper into the defining of the term than the evident consequences of the system around them. Pointing to their primary concerns with conditions at the time and not with the moral arguments for freedom, capitalism’s establishment comes with the pillars of the 19th century as an eternal reference. Regarding capitalism as the apparent, socialists took it to be evil; associating capitalism with the realities of their society, it seems that they did so correctly.
The term capitalism being determined by the scene of the 19th century then, the idea that a capitalist economy could find any common definition with the free-market seems absolutely ludicrous. Indeed, for from early antiquity, to the 19th century, and even to this day, the plague of statism infests the very same economies that all correctly hail as capitalist. ... So, understanding the historical unfree-market of Europe, if the motives behind the objections to the system of capitalism launched from the inequitable scenes seen, then as the word capitalism was only coined to describe that which caused the effects of inequity and not the theoretical free-market itself, it must be concluded that which is, was, and will ever be capitalism cannot be free-market! For what free market could include blatantly authoritarian institutions like Central Banks, land trusts inherited from the remnants of feudal lords, and “monopolies granted by governments to associations of merchants and craftsmen who [aid] in the collection of taxes, in return for the assurance of profits by excluding native and foreign competitors” (Rothbard 18)? Certainly no free-market in the Mutualist, Rothbardian, or Austrian traditions! Yes, with capitalism defined in terms of a historic perspective, if those advocating a free-market oppose protectionism and economic exploitation as seen in that context, then the free-marketer, the libertarian, the Market Anarchist must understand his inherent position against capitalism as a free-market anti-capitalist!
So, hmm...
Something to think about.
Here's Rothbard's side of the argument: The Death Wish of the Anarcho-Communists.
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