Capitalism Defined, Part I: The People Who Have All Our Money

In starting this series, I think it best to prepare a short, introductory definition of capitalism, though I must confess I am magnetically drawn to Kurt Vonnegut's example: "Whatever the people who have all our money, good or bad, drunk or sober, are doing today." One might also be tempted to consult that Cadillac of reference works, the Oxford English Dictionary, which defines capitalism as "A system which favours the existence of capitalists." I think everyone can agree that this isn't very helpful, though the OED is also kind enough to trace the first appearance of the word in English to a novel by William Thackeray.

James Fulcher offers more useful information in his book Capitalism: A Very Short Introduction (Oxford UP, 2004). Fulcher doesn't give a quick-and-dirty definition of capitalism (which helps confirm my suspicion that one doesn't exist), but he does identify the following core features of a capitalist economy:

1) Individuals can freely invest money "to make [more] money" (14). This is the base definition of capital: money that makes more money.

1a) The existence of capital, needless to say, presupposes the existence of money: a commodity (gold, bills of exchange, cowrie shells, Flanian pobble beads) which serves as a readily convertible
medium of economic exchange.

2) Less obviously, investors can freely convert other assets into capital. This means one can freely sell land and labor (14).

3) A correlate of 1 and 2, above, is that labor and capital must be mobile, or fluid, and applicable to whatever enterprises will generate the highest profits (18).

4) Finally, the prices of land, labor, and capital are set in competitive markets, whose fluctuations can be managed - and exploited - by financiers and speculators (ibid).

Fulcher suggests that capitalism will only emerge in countries where there are limited opportunities to enrich oneself through plunder or government largesse, which is why it originated in marginal places - the city-states of northern Italy, the water-logged Netherlands, the cold and rather poor kingdom of England - rather than expansive or strongly-governed ones, like sixteenth-century Spain or early modern China (37). It would therefore have been unlikely to emerge among the subject of my research, the Chickasaws, in the eighteenth century, since they derived much of their wealth from plunder (slaves in the early 1700s, captured European goods thereafter) and, by the end of the century, subsidies from the British government and the United States.

As for the implications of the rest of Fulcher's summary, I shall have more to say in later installments, where I also plan to look at the development of capitalism as a concept from the eighteenth to the twentieth century.