“Capitalism” needs to be pinned down by definition; it needs to be circumscribed so that it doesn’t lead us off in increasingly meaningless and therefore futile lines of reasoning…

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If words are to have any value they must have definite and definable meanings. If too many meanings are ascribed to a single word, the word itself begins to lose its value. It was for this reason that C.S. Lewis complained in the Afterword to the third edition of The Pilgrim’s Regress that “romanticism” had become “a word of such varying senses that it has become useless and should be banished from our vocabulary.” If a word cannot be banished it must at least be bounded by clearly defined lines of meaning, enabling us to isolate the different things which a single word might signify. It was with this noble endeavor in mind that Lewis set out to write his book The Four Loves, drawing the distinction between storge, philia, eros and agape, all of which are different facets of what we commonly call “love.”

What is true of words like “romanticism” and “love” is equally true of a word like “capitalism.” Like these other words, “capitalism” needs to be pinned down by definition; it needs to be circumscribed so that it doesn’t lead us off in increasingly meaningless and therefore futile lines of reasoning. With this in mind, I avoided using the word in my book, Small is Still Beautiful: Economics as if Families Mattered, even though the whole book was concerned with issues surrounding what most people would call “capitalism.” My reason for this conscious omission of the word was that it has become too emotionally charged to be of any use in rational discourse. For some, “capitalism” is the label to be attached to all that is rotten and corrupt in our present socio-economic system; for others, it is the label to be attached to all that is good and free and enterprising in our present socio-economic system. If we use the word negatively, all those who use it positively will think we are wrong; if we use it positively, those who use it negatively will dismiss what we are saying without giving it much thought. If, therefore, we want to be heeded in what we are saying by those on both sides of the political divide, it is best to avoid using the word altogether.

The problem is, however, that the word is in common usage and cannot always be sidestepped. Sometimes, especially if “capitalism” is the thing being discussed, we have little option but to use the word. This is often the case when advocates of “capitalism” dismiss the political and economic ideas of Hilaire Belloc and G.K. Chesterton because of their criticism of “capitalism.” It would be helpful, therefore, to understand what Belloc and Chesterton mean when they use the word. For both men, the word is used to denote an economic system whereby a small minority of the population owns the vast bulk of the capital, thereby forcing the dispossessed majority, or proletariat, to work for this small minority for a wage. In short, and paradoxically, the problem with capitalism is that it leads to there being too few capitalists! Or, to put the matter another way, the distributism which Belloc and Chesterton advocated affirms that the more capitalists there are in society, the healthier society will be.

At this point, those who use the word “capitalist” in a negative sense will have their hackles up. How dare it be suggested that Belloc and Chesterton endorsed or condoned the unjust capitalist system! Heaven forbid!

Let’s take a step back from the emotionally-charged understanding of the word in order to define it in a way with which both sides of the divide might be comfortable.

Let’s begin with the basics, or the very foundations of economics, the four pillars on which all economic activity depends, i.e. the so-called “factors of production”: land, capital, labour, and the entrepreneur. Although people differ with regard to which of these is more important or more necessary, and though socialists seek to subsume the entrepreneur within a generic understanding of labour, these factors serve as a good starting point from which we can move towards a mutually acceptable definition of capitalism.

If we begin with the assumption that an entrepreneur is a “capitalist,” and we understand an entrepreneur as one who has the use of capital and/or land with which to produce wealth, we will see that distributists, such as Belloc and Chesterton, believe that a healthy society is one which is characterized by the greatest number of such “capitalists,” i.e. those who own their own land and their own capital and are therefore economically free. If this is our understanding of “capitalism,” we can see Belloc and Chesterton as “capitalists.” If, however, we believe that “capitalism” is the right of the small minority who already own the land and capital to do what they like with their property, even if the consequence is that the vast majority of people will be permanently excluded from the opportunity to ever become entrepreneurs and will always be forced to work for the small minority for a wage, many of us would unequivocally baulk at such a system, regardless of the name appended to it. If “capitalism” means that only a small elite can ever be capitalists, while the rest of us are reduced to wage dependency, we might well question the justice of such a system, as did Belloc and Chesterton.

Let’s conclude with the question with which we began: What is capitalism? Like “romanticism” and “love,” it has more than one meaning. This being so, let’s be careful about forming judgments about those who use the word until we know what they mean by it.

Books by Joseph Pearce may be found in The Imaginative Conservative Bookstore

The Imaginative Conservative applies the principle of appreciation to the discussion of culture and politics—we approach dialogue with magnanimity rather than with mere civility.

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