How Capitalism Got Its Name

It was not until the late nineteenth century that the word “capitalism” acquired the meaning it has for us today.

What is capitalism? What is it we are for, if we are for it? Or against, if we are against it? As we use the term today, it generally refers to a kind of economy, variously characterized by private industry, free enterprise, competitive markets, and lots of investment opportunities, which most people believe are valuable parts of the way we live together. But during the 1830s and 1840s, in the run-up to the revolutions of 1848, when the term “capitalism” first began to appear frequently, it signified neither a social system nor a “mode of production” but a politics—the concerted attempt by capitalists and their allies to secure the political power they needed to ensure that their interests took precedence over those of everyone else, including landowners, small businesses, wage earners, and even taxpayers more generally. The early arguments over this kind of capitalism were less concerned with how to eliminate money, wage labor, and markets than with how to limit the power of capital and capitalists.

There were other radical critics of the emerging commercial societies of the nineteenth century, of course, like Charles Fourier, Robert Owen, and Karl Marx, who opposed not only capital’s market power but also the market per se. A market economy, according to them, was a constricted, unattractive way to live, which would in any case always be controlled by capitalists—that is, those with money. To avoid such control, society needed to be organized on something other than a market basis. The more narrowly focused “political” anticapitalists disagreed. They generally argued that capital, wage labor, and markets could play a constructive role in a well-ordered economy. But they sharply opposed the myopic capitalism of the moneyed, who presupposed that money was all that mattered and that what was good for them was good for everyone else as well.

Fortunately, this early tradition of political anticapitalism, though occasionally submerged, has never been entirely lost—as witnessed by the long history of anti-monopoly and anti-corporate crusades and the recent history of campaign finance and banking reform. Occupy, too, is a case in point. The part of its message with the most appeal focused not on capitalism (understood as the name of an economic system) but on “the 1 Percent.” A few marginal groups aside, most of those inspired by the movement were less troubled by the idea of using money or having markets, than by a set-up rigged to give the wealthiest access to more money than they were justly due, and more power than their stewardship warranted.

The political anticapitalists of 1848 thought similarly. Their critique of capitalism focused on just such inequities, which they endeavored to correct. They did not have all the answers, by any means, and they largely lost their struggles to control their own economic destinies. But their efforts were not wholly in vain. By rejecting the facile identif...