What are (if any) the differences between Capitalism and Free Market economy?
A lot hangs on our definition of the word capitalism. It seems that neither Adam Smith, David Ricardo, or even Karl Marx made use of the word “capitalism” in that form, although Marx wrote extensively of capital and capitalists. The word came into common use only in the early 20th century. Here is a definition from the 1902 book Modern Capitalism: “an economic organization of exchanges, in which basically two different groups of people, the owners of the means of production … and the workers with no property, cooperate in a rational process of production, joined by the market.” [1902, Werner Sombart] As we know, the classic elements of production were considered to be land, labor and capital. With the rise of the industrial age, the importance of capital (industrial plant) took on an enhanced importance due to the enormous productivity of industrial capital and the huge costs involved. As a result, the risk and the concern arose that the owners of capital would become too powerful and
