Capitalism’s first defining feature is private ownership of the means of production. A few per cent of the population own almost all industry, machinery, resources, and farmland. They control the disposal and use of this property. They accrue profits from their property’s productivity.
Capitalism is also defined by corporate divisions of labor and authoritative decision making. About 20 per cent of the employees of capitalist workplaces do mostly conceptual and empowering tasks, while the other 80 per cent do mostly rote and obedient tasks. The 20 per cent make many decisions and affect social choices. The 80 per cent make few decisions and mainly obey orders.
People’s income in capitalist economies comes mostly from their bargaining power. We get from economic output what we can take. Ownership of property conveys rights to profit. The control one has over needed assets or skills, the value of the output one generates, one’s social attributes like gender and race, and one’s organizational affiliations such as union membership, also convey greater or lesser ability to accrue income.
Another defining feature of capitalism is markets. Markets mediate the amount of any particular good or service produced, the relative valuations of different products, and their distribution to different actors. Buyers and sellers benefit themselves, oblivious to impact on others. I sell at the highest price I can get the least costly items I can deliver. You buy at the lowest price you can offer the most valuable items you can amass. We fleece each other.
Competition drives growth and determines relative valuations. The preferences and bargaining power of buyers and sellers determine prices. The preferences of people who are affected by but aren’t directly involved in specific transactions go unaccounted. Your desire for a car you seek to buy influences its price. My dislike for the pollution that it will spew doesn’t influence its price. In market exchanges those with more power make out like bandits and 'nice guys finish last'.
Beyond private ownership of means of production, corporate workplace organization, authoritative decision-making, remuneration for bargaining power, property, and output, and market allocation, myriad variations in secondary institutions, population, local history, and impositions from other parts of society distinguish different instances of capitalism from one another. South Africa is different from the United States. England circa 1900 is different from England circa 2000. India is different from Mexico.
Referring to capitalism, John Stuart Mill, one of the foremost philosophers of the nineteenth century wrote, 'I confess that I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other’s heels, which form the existing type of social life, are the most desirable lot of human beings'.
