Is capitalism the same thing as the free market?

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Most people assume that capitalism and the free market are the same thing. But capitalism is really just a subset of the free market. It’s the part that uses savings to create tools to expand production.

The free market is much more than that. It includes not only the production of tools but also…

  • All consumption 
  • Quality control
  • Distribution
  • Retail display (stores)
  • Advertising
  • Finance
  • Charities
  • All exchanges, including barter

Think of it this way…

  • The free market is a solar system.
  • Capitalism is but one planet in that system.

It helps to focus discussion if we can show left-statists that capitalism is but a subset of the free market. That allows us to deal with the capitalism issue without having to discuss every aspect of free-market economics. We can then show left-statists how they too are capitalists. If a left-statist has a savings account or some kind of investment account then he or she is a capitalist.

By Perry Willis & Jim Babka

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