Is Capitalism an economic or a political system?

If you look up the definition of capitalism in Wikipedia, it reads: “Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.” The Merriam-Webster definition on the internet is: “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.”

The problem with these definitions is that they assume the concept of “ownership.” And ownership is a concept which has to be defined in a social context by a formula such as:

for two persons x and y, if x is the owner of item z, then y has to get permission from x to use z.

Well, who makes such a rule? If there are only two people involved, then the rule is founded on either an explicit or implicit (tacit) agreement. If there is an external government, such as the State, then it is the State which establishes such a rule by a law.

If the rule is established by a free agreement than we may call it an economic matter, if however it is established by the State, then it is a political matter.

The “private ownership” which is pertinent to capitalism, concerns the ownership of land. Since land is a given of nature — like air or water — it can be used either by mutual agreement or subject to the laws of the State.

Now, I cannot make the use of land without either the permission of a private owner or the State. For example, I cannot camp in State or Federal forests without getting “permission” — normally, by paying a fee. And, of course, if I want to hunt or fish, I have to pay some other fees.

Since capitalism is a function of ownership, and ownership is determined by the State, capitalism is also a political system. The following “Google definition?” is more accurate: “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” But it is not accurate enough because there is such a thing as “state capitalism” which characterized the USSR.

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