Is capitalism the same thing as the free market?

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.

Jim Babka

About the Author

Jim Babka

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Jim Babka is co-founder of the Zero Aggression Project and President of, Inc. He’s an author and former talk show host.
Previously, he was the President of, Inc., defending free press rights all the way to the Supreme Court. He and Susie are the proud, home-schooling parents of three teenagers. He enjoys theology, UFC, target practice, and Tai Chi.

Perry Willis

About the Author

Perry Willis

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Perry Willis is the co-founder of the Zero Aggression Project and Downsize DC. He was the National Director of the Libertarian National Committee on two occasions, and ran two Libertarian Party presidential campaigns. He has an extensive background in marketing and fundraising, and has ghost written direct mail appeals for numerous luminaries, including Karl Hess, Ron Paul, Charlton Heston and Harry Browne.

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Show Comments 1


  1. Your short definition of capitalism seems morally positive, or at least neutral. So many people view it as a morally charged word that brings to mind the “robber barons” and “greedy capitalists.” Whereas, capitalism is simply a system of using money (or any medium of exchange) in a disciplined, efficient way, to produce the goods that people need and want, while rewarding the capitalists with profits, if they are good at it. It may be enlightening to folks to discover what capitalism is not: it is not greedy, nor is it morally corrupt. Those are qualities that describe certain individuals and groups who use a system such as capitalism, or the state, in an unethical manner, to achieve their goals.

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