"Actually existing capitalism" or "really existing capitalism" is an ironic term used by critics of certain economic systems considered

capitalist Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...

neoliberal Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...

. The term is used to claim that many economies purportedly practicing capitalism (an economic system characterized by a ''

laissez-faire ''Laissez-faire'' ( , from , ) is a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or regulations). As a system of thought, ''laissez-faire'' ...

'' free-market system) actually have significant state intervention and partnerships between private industry and the state. It is a play on the term actually existing socialism. The term ''

mixed economy A mixed economy is an economic system that includes both elements associated with capitalism, such as private businesses, and with socialism, such as nationalized government services. More specifically, a mixed economy may be variously de ...

'' is used to describe economies with these attributes. The term seeks to point out discrepancy between capitalism as normally defined and what is labelled as capitalism in practice and to claim that (1) capitalism as defined does not and will not exist and (2) such a "pure" capitalist system is undesirable. The term is used as a response to the economic doctrines that have dominated western economic thought throughout the neoliberal period. Critics point to the use of regulation to avoiding economic problems such as acute

commodities In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. Th ...

fluctuations, financial market crashes,

monopolies A monopoly (from Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable sub ...

and extensive environmental damage as examples of how capitalism as defined does not match actually existing capitalist economic systems. In modern economics discourse, "actually existing capitalism" can be understood as a critique of economics teachings that are focused on having and preserving a free-market or capitalist system. Specifically, the term is primarily directed at the

Austrian School The Austrian school is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivat ...

or the

Chicago school of economics The Chicago school of economics is a Neoclassical economics, neoclassical Schools of economic thought, school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and populari ...

as these are economic schools of thought that strongly advocate for capitalist systems.

Core characteristics of capitalism

The core characteristics of capitalism are (1) the production of commodities which are exchanged on a market; (2) wage labour, and (3) capital goods are in the sphere of private property, as well as public, rather than common property. Proponents often believe in rational utility maximisation on the part of consumers and presuppose perfect competition for economic models.

Capitalism in practice

Technical problems with capitalism in practice

Perfect competition is only theoretical; it has never existed nor is it possible to exist.

Free-market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...

capitalism as defined cannot exist and any economy that claims to be capitalist in this sense is actually some other type of economic system, i.e. only has some free-market capitalist features. "Actually existing capitalism" is also used to imply that current understandings of economics would need to incorporate the impossibility of capitalism and no longer use the definition of capitalism as a starting point with which to analyze an economy.

References

{{reflist Capitalism Criticism of capitalism Liberalism

Core characteristics of capitalism

Capitalism in practice

Technical problems with capitalism in practice

See also

References