It helps your research reading Bruce R. Scott, The Concept of Capitalism (Heidelberg-London-New York: Springer, 2009) that explains capitalism as a "system of governance" rebuilding the concept from the classic Fernand Braudel "Civilization and Capitalism" (the original French has a very different title). More recently Scott published "Capitalism. Its Origins and Evolution as a System

of Governance" (Heidelberg-London-New York: Springer, 2011). These are the arguments and problematic stressed by Scott after, he told us, a visit to China:

" After the trip and the readings, one book stood out for its influence on my thinking: Fernand Braudel’s three-volume History of Civilization and Capitalism, 15th Century to the 18th Century. In the third volume, Braudel noted something that was completely new to me, to wit that average incomes circa 1500 were relatively equal across the most settled areas of the world at the time, which I took to mean Japan, China, India, present-day Turkey and Iraq, and Europe. The spread between the high- and low-income areas was estimated to be about two-to-one. Yet by the time I was doing my reading in Braudel, that spread had broadened to approximately thirty-to-one because of growth in the high incomes. This increased spread in relative incomes and therefore economic performance raised some immediate questions; for instance, what was it that had led to the rise of Europe, in relative terms, from circa 1500 onward? In hindsight it seems supremely ironic that Braudel was never able to ask if what he was searching for might have been hidden right in front of him, in the title of his book, i.e., in the European creation and adoption of an early concept of capitalism as a system of governance for many, but by no means all of their respective economies. Braudel was never able to define capitalism, as he readily admitted in his second volume, and, perhaps as a consequence, he never considered the possibility that the key to the relative rise of European incomes might have lain in the creation of that capitalist model of governance. Indeed, Braudel did not go looking for a model of governance; instead, he seems to have been looking for some natural force or forces that would explain the relative progress of Europe" (etc., p. XIII).

@ Ivo Carneiro de Sousa While I haven't read Scott's book, I'm sympathetic to viewing capitalism as a "system of governance". However, what kind of governance? Marx's point - emphasized by his recognition of the appropriateness of Adam Smith and David Ricardo's choice of a "labor" theory of value - was that the primary "system of governance" in capitalism was the universal imposition of work, the subordination of life to commodity production, either profitable commodities or the commodity labor-power, i.e., the ability and willingness to work for some employer. Commodity-producing work (in this dual sense) occupies the vast majority of the time of most people in society, with even most activities undertaken in so-called "free" time, structured to reproduce labor-power. In my interpretation of Marx, therefore, capitalism can be defined as a social system based on the universal and endless imposition of work as the most fundamental form of social control (or governance).

In my view, in order to understand what capitalism is we need to start from the capitalist mode of production:

i) Products are commodities. Production is intended for the market

and not (directly) for consumption.

ii) Labour is performed by wage-earning workers. Workers are

forced to sell their labour-power due to their separation from the means

of production. Labour-power is the commodity workers sell in exchange

for wages.

iii) Natural resources (lands, mines, oilfields, etc.) are of private

property. Every natural resource has an owner, and the class of

landowners is distinct from the class of capitalists3.

iv) Production processes are organized (directly or indirectly) by

capitalists. They buy the inputs and sell the outputs.

The inputs of the production processes are: commodities (raw

materials, tools, machines, etc.); labour-power performed by workers

with different skills; and the productive uses of natural resources. Points

i-iii above imply that these inputs must be purchased on the market.

Assuming, for the sake of simplicity, that they must be paid ex-ante, at

the beginning of the production process, capital is necessary in order to

finance the expenses of production, and this is the reason why capitalists

are the only possible organizers of the production processes (point iv).

This is, essentially, Marx's idea of capitalism.

Thank you for all these interesting comments and contributions. I would like to add Max Weber's definition in which he distinguishes capitalist from traditional economy. The capitalist spirit aims at the acquisition of money as an end in itself. The summum bonum of capitalism is therefore the acquisition of money and more and more money. While the traditionalist asks how much he has to produce in order to earn a certain amount (and to live a good life which is the last and only goal in itself), the capitalist asks how much he can produce in order to earn more and more money. A political system that is capitalist in this protestant ethic sense would help capitalists to strive for their goal (more and more) and the capitalists themselves would strive for political power in order to guarantee their freedom of capitalist action.

Markus Pausch Am in agreement with your observations, therefore, we need to understand the (artificial) working principles of the current monetary system.

Markus Pausch, after years of studying policy making, it seems to me Weber's view of the "capitalist spirit" as obsessed with making ever more money, captures only the most narrow-minded capitalists who can't see beyond their own operations. But as Adam Smith (even before Marx) realized, capitalists collude and act out of understandings of collective self-interest that often go beyond mere money making. Some at least (who often become policy makers) have a sense of "noblesse oblige", understanding themselves to be stewards of their kind of society, responsible for maintaining order through what they call "providing jobs" and Marx calls "imposing work". Thus their embrace of so-called "full employment" (just enough unemployment to keep workers in line and wages too low to threaten profits), the assessment of the "appropriateness" of the choice of technology (whether it provides enough jobs), concepts of education & mental health geared to preparing for jobs and then continuing to be able to function in them. In short, they complement profit-making with the social engineering of the whole society.